Good morning, and welcome to HealthStream's Fourth Quarter and Full Year 2023 Earnings Conference Call. At this time, I would like to inform you that this conference call is being recorded and all participants are a listen-only mode. [Operator Instructions] I will now turn the conference over to Mollie Condra, Vice President of Investor Relations and Communications. Please go ahead, Ms. Condra.

Thank you. Good morning and thank you for joining us today to discuss our fourth quarter and full year 2023 results. Also in the conference call with me today is Robert 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 this 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 measures such as adjusted EBITDA, which is a non-GAAP financial measure. A table providing supplemental information on adjusted EBITDA and reconciling to net income attributable to HealthStream is included in the earnings release that we issued yesterday and may refer to in this call. So with that start, I'll now turn the call over to CEO, Bobby Frist.

Good morning, everyone. I'm having a few connection issues. There might be a glitch here and there will push through it though and do the best we can. For the earnings call, I'm really excited about how we finished the full year 2023. There are lots of exciting things to cover, and we'll do that in great detail in the next 30 minutes. We delivered record top-line revenue of $279.1 million and record adjusted EBITDA of $61.3 million. In our guidance for 2024, we expect to surpass both of those high watermarks as we further expand our ecosystem with exciting new products, new sales channels and new target markets. The significant development in our market expansion [Technical Difficulty] directly to individual end users, like physicians, nurses, nursing students. Our extreme focus allows us to approach individuals [Technical Difficulty]. Our online platform website is better for handling purposes. The most popular purchase due to the DNA mandate opioid with over 2,700 orders placed in. We also amplified our ability to reach and to sell individual nurses through NurseGrid Learn, which is linked via our popular NurseGrid app. As a reminder, NurseGrid is the number one most popular app for nurses based on ratings and downloads in the Apple Store, with approximately 1 and 6 nurses in the U.S. regularly using it. During the third and fourth quarters in 2023 over 1,800 orders were placed by nurses. Some of the top products sold [inaudible]. Yes, I'm having some connection issues I'm getting feedback from. So again, we'll push through the best we can. I'm excited about our early success in selling direct to healthcare professionals with our new e-commerce enabled hStream platform. I believe that the ability to participate in our ecosystem throughout one's healthcare journey includes new opportunities for caregivers to…

Yes.

Go ahead and so I can get back in. Go ahead and start from the top.

Sure. So I'll start where Bobby left off, if I understood that correctly. So in the fourth quarter, revenues from our scheduling application ShiftWizard grew 31% over the prior year quarter as customers continue to report high customer satisfaction. Since purchasing ShiftWizard in October 2020, we have selected it as our primary scheduling application and significantly expanded its ability to perform at enterprise scale. And it's only going to become more powerful, more differentiated in the market in the coming year. In the fourth quarter, we welcome many new customers for ShiftWizard, including Norman Regional Hospital, Freeman Health Systems, and Phelps Health. Revenues from credentialing privileging enrollment application, credential stream grew 52% in the fourth quarter versus the same period last year. In the fourth quarter, we contracted 37 new customers for our credential stream solutions. These new credential stream customers included many highly respected healthcare organizations like Intermountain Healthcare, Lyra Health and Dayton Children's Hospital. So there's still a great deal to talk about. But right now, I'm going to turn it over to CFO, Scotty Roberts for a more detailed look at our financial performance and expectations.

I'm going to start my portion of the call today with a recap of our financial results for the fourth quarter and then I'll go over our financial outlook for 2024. Unless otherwise noted, the comparisons will be against the same period of last year. We continue to deliver solid results as we closed out the fourth quarter of 2023. Revenues were $70.6 million, up 3%. Operating income was $4.3 million, up 38%. Net income was $4.6 million, up 87%. Earnings per share were $0.15 per share, up from $0.08 per share. And finally, adjusted EBITDA was $16 million and was up 17%. Our revenues increased by $2.1 million or 3% coming in at $70.6 million, compared to $68.5 million in last year's fourth quarter. Our revenue mix continued to tilt in the direction of subscriptions versus professional services. In fact, revenues from subscription products accounted for 96% of total revenues and were $67.9 million increasing by 4% in the quarter. Professional service revenues declined by $0.5 million or 17%, which had a negative impact on our growth rate of approximately 80 basis points. So now let me provide some more color about the revenue results. As Bobby and Mollie mentioned earlier, we saw a good mix of growth contributors throughout our portfolio, but I want to call out and quantify a couple areas that kept our growth rate for the quarter lower than it would have otherwise been and lower than we expect to see it in 2024. The first area that I'll highlight is associated with our ANSOS scheduling products. The suite of products was down $0.5 million or 13% in the quarter. Our focus continues to be on stabilizing existing ANSOS customers and migrating them to ShiftWizard, our SaaS scheduling application, which grew its revenue by 31%…

Thanks Scott. What I'm going to do is repeat my opening section because we need a good record of it, and then I'll pick up with the third section, my final section. If I break out again, I'll ask Scotty to do the same. Just go back to the top of the script and get my first section in the record and finish with the third section of our presentation. Good morning. Thank you, Mollie for the handoff earlier. Welcome to our fourth quarter and full year 2023 earnings call. I'm excited about how we finished the full year 2023. We delivered record top-line revenue of $279.1 million and record adjusted EBITDA of $61.3 million. In our guidance for 2024, as Scotty just mentioned, we expect to surpass both of those high watermarks, as we further expand our ecosystem with exciting new products, new sales channels and new target markets. A significant development in our market expansion strategy in 2023, so our additional focus on selling directly to individual end users like physicians, nurses and nursing students. Our hStream platform now allows us to approach individuals with the learning most applicable to them. I'm going to check real quick and see how that came through. Scotty or Mollie?

You're coming in just fine, Bobby.

Around midyear, we began selling primarily to physicians on our newly released CME courses site powered by the hStream platform. On that site, we've seen a surge in site visits and purchases with the most popular purchase being the new DEA mandated opioid course with over 2,700 orders placed in the fourth quarter alone. During the last two quarters in 2023, we also amplified our ability to reach and to sell to individual nurses through NurseGrid Learn, which is linked via our popular NurseGrid app. As a reminder, NurseGrid is the number one most popular app for nurses based on ratings and downloads in the Apple Store, with approximately 1 in 6 nurses in the U.S. regularly using it. During the third and fourth quarters of 2023, empowered by our new hStream commerce capabilities, over 1,800 orders were placed by nurses. Some of the top products sold directly to nurses via NurseGrid Learn include our stable program, our regulatory courses we call SafetyQ and ComplyQ and CE Unlimited. I'm excited about our early success in selling direct to healthcare professionals with our new e-commerce enabled hStream platform, I believe that the ability to participate in our ecosystem throughout one's healthcare journey, including as a student, which is a new target for us, when they're an employee at a healthcare facility or as an individual finding us between jobs even now with this new commerce capability. We kind of create a continuous revenue opportunity out of the millions of subscribers in our network. And I think this gives them opportunity to continuously develop them and engage with our ecosystem throughout their career. Before we go further, I wanted to provide a high level reminder about our core business and especially for the benefit of those who may be new to HealthStream.…

[Operator Instructions] Our first question comes from Matt Hewitt with Craig-Hallum.

Maybe first up, just a point of clarification, I think, Scotty, you mentioned there was $14 million left in ANSOS legacy contracts. I'm just curious, will those contracts be up for renewal or conversion, I guess, this year or does it expand beyond this year? I'm just trying to figure out what the headwind is that you're facing maybe a little bit this year.

I'll start to take that and then let Scotty add to it. The total remaining kind of business with ANSOS is about -- is $14 million. And it is our hope and expectation and our work and focus of our work to retain all that business until which time we can eventually upgrade them to the newer technologies like ShiftWizard. And so, it is our objective. Now that said, in the last 24 months, as Scotty noted, we've experienced attrition in that group and lost them not to the market, not to the translation over to ShiftWizard. We're working really hard to physician the upgrade to ANSOS as ShiftWizard. If you remember, it's a legacy installed product. It is aging technology and we're working hard to keep the customer satisfied with where they are, renew them as their contracts come up for renewal, but also transition them when they're ready to transition to the ShiftWizard product. We hope to stem some of this rate of loss here in the coming quarters and get them transitioned over to ShiftWizard as well. I hope that set a framework. If Scott wants to add anything, he can.

I mean, it's a mix of contracts that are -- what we call in their auto renewal phase. That's a common practice for that type of previous sale and then a good mix is also of customers that have entered into agreements for multiple years of renewal for that solution. I don't have the numbers in front of me to speak to but there is a mix of contract links in the base.

Bobby as you look at -- as you start to sell more and more directly to the end user, particularly the nurses. Historically, you sign and I think you mentioned again today, you're typically signing 3 to 5 year contracts with your hospital customers. But with nurses, in particular, are those aren't 3 to 5 year contracts. How does that change your visibility? And what can you do to ensure? Obviously, it's a big market and getting in early with those end customers is obviously ideal. But how does that change your visibility and what can you do to maybe increase that?

A couple of things; one, these technologies power commerce -- B2B commerce as well as direct-to-consumer and so there's two opportunities here. The main one I'm going to cover first is focusing on the nursing students while they're in the 2 and 3 year programs to become nurses and getting the schools to have the commitment to put those nurses through ready-to-work programs. And so the main focus of this is to get it where they could, both be find a clinical rotation in a hospital and of course, they pay a little fee for that through myClinicalExchange, buy a few content bundles like the Red Cross program before they become a nurse. They enter the market with the certificate and certificate generally has about a 2 year lifespan. And we've entered into at least one major multiyear contract with a nursing school that has committed to provision some of these services to the students on a steady basis -- ongoing basis, before they become a nurse and then as they transition from there, they can carry using hStream technology that portfolio, that record forward with them into work. So that's the main focus of these commerce capabilities the new student Jane AI, for example, we'd rather the school contract to provision it to the students. Now the second capability is the one I opened with, which is fun and exciting. It's kind of a gap filler. So if someone is between jobs, they noticed their license might expire, if they don't take certain education for their continuing education, they can still use their hStream ID, log in and pay for themselves, of course. And we did report a lot of activity on there, both by learning to target doctors and students. That revenue will be a little less predictable.…

Our next question comes from Jared Haase with William Blair.

This is Jared as on for Ryan Daniels. Bobby, maybe just to start, I was hoping to unpack a little more color, just around recent sales cycle trends. It seems like others that we've heard in the health care IT space is starting to flat, maybe some improvements in the selling environment with health systems, maybe relative to what the environment was like going into 2023? So I'd just be curious if that's something you've experienced in any meaningful way? Has that translated into any sort of favorable inflection from a selling perspective?

It's in different pockets. And so we did try to highlight some of that in the call. I don't know if some of that got muddled out, but let me kind of repeat and think through some of it. I think we did talk about at least for some of our legacy products, where they had some decline and we specifically address the skilled nursing market. So that market as a whole, is under a bit more duress, we see a little bit more churn in the customer base, like the smaller ones maybe combining with larger ones or even going out of business. So in the skilled nursing market, it seems to still have some remaining financial stress and a little bit harder to sell to. And so we saw some declines in the product that -- the quality manager product that Scotty mentioned. And -- but we did also open by highlighting, actually had to repeat it still at the end, but highlighting the subscription growth to ShiftWizard and CredentialStream both of which, as you heard, 31% and nearly 50% year-over-year growth, which is reflected in the strength of the pipeline for those products. And so I guess I'd say it has some variability. But in some of the bigger enterprise purchasing, particularly in CredentialStream and ShiftWizard, we saw -- we see strong pipelines. And so maybe there are certain subsegments in the market like skilled nursing. We're learning more about nursing schools and their buying cycles. And so there'll be more on that in the future. So I won't comment too much on that because we both have new products and a new focus on selling to those. But -- so there's some variability in there. I'd say generally, though, the patterns of reviewing products for purchasing, the availability to sell is obviously much improved from the middle of COVID, where people simply weren't taking calls. And so I'd say there are kind of normalized new models of selling and customers are receptive to seeing the new and exciting products that we have.

And then maybe just one on the 2024 outlook and looking at the revenue guidance, it looks like the range from the low to the high end is a little bit narrower relative to the guidance for 2023. I'm curious if there's anything we should infer in that just in terms of the level of confidence that you have at this point in the year, maybe relative to last year or anything that's changed from a visibility perspective? I know you're still working through the ANSOS sort of headwind and maybe there's some nuances as to how that kind of impacts the forecast? But maybe I would just love to unpack anything that's going on from a visibility perspective at this point in the year.

I mean, generally, as we open, the business is very predictable. There are some variables and again, we noted those like ANSOS that are less predictable, we've tried our best to factor in the topics that Scotty covered on some of the challenging areas. And I think in general, we're getting a little better, and I feel a little more comfortable with the slightly tighter range. And so I guess we're just getting a little better at forecasting. Also, it's interesting in the -- we talked about the direct-to-consumer commerce too. A lot of that's data-driven. And so for example, we mentioned how that opioid course was just selling really well. I mean there is kind of a requirement around that and we're getting better at the targeting, so we're a little better at predicting those sales, which might normally be considered almost totally or less controllable. And so I'd say, using better targeting for selling and maturing a bit and our forecasting, we hope that we're able to tighten that range and give a little better guidance. So, we'll see how that plays out. But our expectation is that we can hit that range.

Our next question comes from Stephanie Davis with Barclays.

This is Anna Prozesky on for Stephanie. I want to go back to the 2024 guidance. Just curious if you could talk a little bit more about the drivers of more sequentially stable growth in margins, given your cost optimization and network expansion efforts?

I'll let Scotty take a little of that. I think just in general, yes, we've gone -- as we migrated from essentially to this one HealthStream model. We've been able to find operating synergies in the business by operating more like a single platform company, we were able in early last year to restructure some of our operations and deduplicate some of what we used to be segment reporting. And so some of those efficiencies are still in the model and we benefited from them this year. We're just getting better kind of operating. So you see better management of our G&A, for example, in the last 12 months and therefore, may be more predictable, as we look into next year. We hope, again, more stability -- there are a few variables to that as we just talked about a few of them in the sales model. Also, a few challenges in submarkets like the skilled nursing, we did see a little higher bankruptcies in the market, which again adds a little bit of variability to the predictability, things that are essentially beyond our control. But the things that are within our control, I think we're getting better at controlling, both from a G&A standpoint, even CapEx, there's an increased focus on deployment of our capital into software development and a better, I'd say, rank ordering the prioritization of projects that we think we're going to be -- hopefully get better and better at deploying our capital. And so I think all that is just hopefully a maturing business that's getting better at how it operates and studying more for efficiencies on how we get where we're going. For example, these new e-commerce selling ability provide a more financial leverage, as we sell with click-to-purchase functions, we can lower our total cost of sales. And I think that's kind of another type of efficiency we expect to get, as we deploy the new platform models that we're building.

And then as a quick follow-up. Just curious if you could rank your capital allocation priorities across inorganic opportunities, dividends and share repurchases for next year?

Well, I mean, the first part is building organic products like the Jane AI product that is we're going to take into the nursing school. So first priority for capital and capitalized software development is in building and enhancing existing products and building new products, we've talked about taking ShiftWizard more to enterprise class. We've talked about adjusting our Jane product, enhancing the AI technologies and entering new markets with it. So our capital -- the bulk of our capital goes into exciting new product development. That is the place where it should go. And then second to that would be, I guess, the inorganic opportunities and we -- our last acquisition was a little over a year ago. It turned out to be a really strong winter, small bite-sized tuck-in incremental to our platform strategy. So very excited. And I think that will be kind of the second priority is to -- we won't force anything. As demonstrated last year, we did no acquisitions last year. But we're constantly looking and expect to continue an active M&A program, especially the kinds that kind of leverage our platform technologies and where we're going the 3 primary application areas where we are. So anything that strengthens those 3 areas or enhances our infrastructure, our targets for us for this. So that would be the second. And then I would say, we executed a really good buyback program. I think we've done 3 in our 20-plus years, 24 years being public. Actually, all 3 of those buyback programs are in the money, which I think would be a typical of a lot of management buybacks, management and board-driven buybacks. So, all of our buybacks have been good deployments of capital, knock-on wood so far. And so that maybe the third priority. And that program does lapse in March and no visibility on whether it's time for our board to put another one in place. But right now, we have an active program that expires in March. And then lastly, the dividend, I think it's a very small dividend, but it sends the message of capital discipline. I think taking a little bit of money off the top for shareholders and then applying the balance of it to all the things I just talked about, I think puts a little bit of capital discipline and it says, look, first order to remember is to make money for shareholders. And we put a small dividend in place to send a very clear message that we can manage our free cash flows, build new products, enter new markets, do small acquisitions that fit, while also paying out a little sharing the profits along the journey. It is a journey, I've been doing this a long time. And I think it just brings shareholders more on to the journey to share a little bit as the journey evolves. So, those would be our 4 priorities, 1, 2, 3, 4, the way I articulate them.

Our next question comes from Richard Close with Canaccord Genuity.

Congratulations on steady 2023. Scotty, I was curious on modeling revenue with 8 streams subscribers going away. Just wondering what the best way to forecast going forward? And how we track the company's progress of penetrating the $12.3 million employee TAM and increased wallet share that you're talking about? I guess, pulling back on the hStream, the model is sort of evolve into a black box. And -- are you considering providing any other metrics like ARR growth or net revenue retention or anything to help us out?

Yes, we're studying that now. So a couple of things there. First is just a reminder. And I think in spite of our best efforts to explain where we are in the journey. I want to remind you the first thing is that the metrics that we had out there that we just retired was for subscriptions not subscribers. And so it really was intended to show the platform kind of expansion, but not as an infrastructure for calculating ARPU or revenue per employee because we haven't yet gotten to the place and we fully intended to over time, get to the place where we could convert and talk about subscribers, like the number of unique health care persons in our network. And we -- and so we're just not -- it was a great metric, almost like for a single product to talk about its expansion. But it was not correlated to revenues for the reasons Scotty mentioned and it was not -- it doesn't correlate to subscribers, and we saw some potential misapplication of it to calculate revenue per subscriber. And so -- we think it served its purpose. We're getting our technologies out into the market and almost we report subscriptions sold, our regulatory course where it gave us a sense for that but it is not a proxy for subscribers. And it can't be related to revenues yet because it's not fully deployed, meaning there are several products that drive revenues that don't add to the subscription number. So for that reason not subscriptions, aren't subscribers and it's not fully deployed. It can't be used as a denominator in a revenue per employee model. So we are going to look to this year, add additional both financial metrics to focus on. We already report full GAAP, of course. But -- and one of those we're studying is ARR. So we'll look towards the middle of the year to see if we can get to that kind of metric, which I think would help all of the analysts and everyone understand the recurring revenue nature of the business and the growth trajectory. So yes, Richard, we're working on that. But I think it's time to take this metric, as we mentioned, kind of off the table because it was symbolic of the growth of the platform extension but not relatable to people yet and not relatable to revenue and we saw some of that starting to happen. So we just think we need to move our focus probably towards something like ARR. That was the discussion in the last quarter, and we've got a test to back test and see how that metric -- how we're going to measure it. But that would be a goal would be to add some new metrics by the middle of the year.

And then on ANSOS, I had I guess a couple of follow-up questions on that. Is the remaining $14 million is that just maintenance and support revenue? That's the first question. And then if there's any detail in terms of the success rate of converting to the ShiftWizard product would be helpful? And then finally, the average term, I guess, length the time on the remaining contracts?

Sure. A couple of things there. The contracts have a lot of essentially -- a lot of them are old installed and they have a maintenance fee it's non-SaaS, but there's some recurring nature to it and they have auto renewals, unless they cancel. And so there is a recurring nature to it. And it does include some of those maintenance fees basically. So the second is on the conversion rate. I'd say, to date, obviously, unfortunately, not very successful at all of that but a renewed focus by our teams. Also, as we've talked about in prior calls, we're enhancing ShiftWizard to better meet the needs of these enterprise customers of ANSOS. And so -- and I think every single quarter now and actually every month on ShiftWizard, there's a new software release and it's moving us ever closer to full enterprise capability. So I think it will be a better opportunity to transition. So again, not very successful in the migration today, as you hear from the loss that we've been reporting, we do expect and we have full energy on stabilizing that $14 million, and we're going to try to reduce the attrition rate and also succeed better this year in the conversion rate. So this isn't a story of I don't think going to 0. It's an effort to stabilize and stem the loss, while also transitioning them to the newer exciting technologies of ShiftWizard. And ShiftWizard is very well received in the market for its current capabilities, it's just winning share. We just need to enhance some of its core functionality and we've made a lot of progress on that enhancing core functionality around kind of enterprise level data analysis. And so, I think we look forward to by the middle of the year having great progress on that. So there'll be a better destination to migrate everybody to. I'll turn it over to Scotty in case you want to add anything.

Yes, I'll just make a comment or 2, Richard. I mean, I think I tried to address with Matt earlier in the call kind of the nature of the contract length that kind of vary from auto renewals to some that have signed multiyear contracts. I don't have the duration run out in front of me, but there is a good mix of auto renewals plus customers under term. I would say, too, that our objective is to continue to support the customers. We do want to migrate them to ShiftWizard, but we also want to acknowledge that there are still customers on that application and we're still there to support their use of it. And so that's another consideration. And I think as we talked about the $14 million it's -- we wanted to just provide that number to provide context as Bobby said, I don't expect it to go to 0. I just wanted to size it up for our investors to understand the magnitude of it.

And then under the direct-to-consumer, just on that portion of revenue, I know it's small, but it's a different sale. How are you thinking about customer acquisition costs on the direct-to-consumer market, maybe it's a little less than a typical direct-to-consumer because they -- if they're in between jobs, they already have exposure to you. Just trying to get your thoughts on that.

Yes. I would say for the next couple of years, our thoughts are really just to try to keep the people that I would call in network to stay in the network when they're between jobs. And as I mentioned, pick up this new audience of students, before they become professionals. And so it really isn't too broadly openly market to people to self-register. It's to capture using existing data from the customers that have been in network to find them between jobs or when they leave a job, they can now leave and carry their HealthStream transcript with them and that's different. And so they kind of -- if they work somewhere for a couple of years and they leave they can still log back in using their HStream ID and see that they had 10 courses or -- and so now all we're doing is saying, you can log and can then carry your transcript with you like a portfolio or a wallet, you can take it with you. But you can also say well might as well click at the bottom here to keep my license current and take an additional course. And that's happening right now with doctors, on that DEA course that we mentioned and it's happening with nurses, when they take a little bit of CE or even when they're about to take a new job, they refresh on something before they go back into the new job. So really, we are -- it's more of a gap filler than it is a broad consumer -- you said consumer, I call it direct to professional D2P. And it's really just trying to keep people in network all the time as opposed to just kind of broadly marketing out into the wild open right now. Now maybe we get there someday, but really, the job right now is just to make that transcript portable make them lifetime kind of -- lifetime engaging with HealthStream instead of just engaging with us when they're in their job.

And if I could slip one more in. I thought on CredentialStream, it was interesting you announced Alira Health, a digital health company that seemed a little bit different. Are you seeing an uptick in opportunities in that segment on the direct-to-employer benefits area?

We are seeing at least with the insurers. We're seeing some opportunity there. And so I would say, yes, kind of categorically we -- there's interest in a couple of areas that maybe are not just purely the acute care hospitals. And so there are a lot of -- I guess I'd characterize them as new, but I just say we're getting better at pursuing a broader opportunity and not just the acute care hospital market. So the answer is yes.

Our next question comes from Constantine Davides with Citizens JMP Securities.

Just a couple of follow-ups here on scheduling. Can you just maybe characterize where you're seeing growth with ShiftWizard, because it's been pretty impressive in '23? And I guess just a little further on that, is it sort of large IDNs, complex academic medical center type installations or smaller hospitals? And then are you typically replacing a manual kind of homegrown scheduling system or some other standalone technology solution?

Well, a couple of really interesting things in that space for us. One, I would just describe it if there's kind of such thing as the very large enterprises. And then there's the middle market and then there's a small urban or rural hospitals and community hospitals. It's kind of the middle there that we're getting really strong on. You probably call them regional health systems. The other thing is that we have this great relationship that's growing with Workday, where they're bringing us in to help kind of them have a complete offering, and we turned out to be really good partners in supporting customers' needs. And so we're getting brought into Workday accounts to -- with them to round out services and we just found that to be a great partnership. So kind of a good referral -- almost a referral program for us, a good source of leads and compatibility. We just work really well with that team and our applications work together well and present well together. So that's been really exciting and fun. Usually, we're taking out competitors in the market that have aging technology, and we've got this emerging new good paradigm, great user interface with ShiftWizard. So organizations like UKG and API where we compete, we generally are replacing something. And so I hope that answers your questions. And in general, we're trying to expand the capabilities of ShiftWizard to handle ever larger and larger systems. We do have some large systems, as customers and we just need a more robust -- basically reporting a data analytics suite, which we have in learning, which is great. So we're going to use a lot of that infrastructure to launch a better class of data analytics and learning around scheduling, which we think will meet the needs of even the larger health systems. So we're excited about that. And that should be a this year event. We're making good progress on that as well. Again, as I mentioned with monthly releases of ShiftWizard, very exciting. We have a webinar and hundreds of people will attend for each monthly release to see what's coming on ShiftWizard. And it's just gaining traction and momentum and excitement as we add enterprise class features so we can go after even larger customers.

And then just a follow-up, I guess, to Richard's question around metrics. Have you -- or can you talk about just how many hStream IDs have been claimed at this point? Is that something you can provide?

It's interesting. It's over 1 million, but we've got a lot of work to do. There's a lot of -- and we've been building tools for a long time now, deduping tools. We've been building tools to let people, if they worked at one health system, they can claim their records another and combine them, so they have this unified transcript as an individual. So it is really exciting, but it's kind of still nascent. I mean, there are several steps in the process. First, we have to wire the application, we have dozens of applications to the hStream architecture, using -- so it uses the hStream ID. And then we have to get the professionals to kind of claim any other uses like we call it putting keys on key chains. So once you have an hStream ID, you're able to then go and say, I also use this application and so kind of merge that information, almost the way you do at Google or you get universal access to all their apps. But for us, it's a limited set of apps now. So we have over 1 million, what I'll call reconciled IDs and there's going to be millions more over time but that is going to take time and that's -- until we can get to that pure subscriber count. Historically, you think of us as B2B software, 3 separate tech stacks. But increasingly, the tech stacks are interrelated through the hStream platform and the hStream ID. And we're kind of mid-stages maybe deploying both the technology and the reconciliation of ID. So over 1 million unique hStream IDs have been issued, which is really exciting, but there's millions more to go and we expect steady quarterly progress on that. And of course, when we get to some place we're excited, where we have enough momentum that can become a metric. And that could be the basis for some kind of ARPU. But there are 2 things have to happen. One, more of our applications have to connect to it. And then more of the users have to reconcile. And we've been building -- this is a very complex topic and we've been working on it for years. You have to have the reconciliation tools, the account joining tools, the keys on key chains, the management tool sets and we're actually getting very good at those in the HealthStream ID deployment models. We're getting very good at all of that. And so we expect it to kind of continue to spool up.

And I guess just last question along those lines. Where do you think you are in the journey, Bobby? Whether it's in baseball terms or some other language. But just having all the apps on the platform common architecture, making them all interoperable and seamless. Just how far along you think you are?

On the baseball analog, and I'm not a huge baseball person but I'd say third inning, but it's going faster. So it's one of those things that's not linear, like each inning isn't the same length. I think it's the kind of thing that can kind of be -- maybe geometric or maybe exponential but definitely geometric where it should go faster than linear. And so while we're in maybe 3 out of 9 innings, the fourth should be faster than the third and so on. So I think it can continue to spool up.

Our next question comes from Vincent Colicchio with Barrington Research.

Most of my questions have been answered. Just curious on the CredentialStream side. With the success you're having, has there been any competitive response in terms of trying to match your differentiation there?

Well, no. We have lots of things to do in our road map to continue to differentiate. But right now, I think we've got a really exciting product. And in fact to the point where, as I mentioned, organizations like Workday are thinking of us as a best of breed and bringing us into their deals. So, I'm excited about where it is. Now where it's short is and we talked about this is some of its enterprise feature sets, particularly around data management reporting. Like if you're a large organization with 50, 60, 70 hospitals, you have different demands on how you distribute information and you're solving labor issues across markets and across regional deployments. And so, we're going to get more sophisticated on that this year. But those are the advances that we have. Now the true differentiators are still yet to come. So we're beginning to incorporate some of the technologies of our platform, for example, the license service. I hope that by the end of the year, for example, will be using the license service that was built in CredentialStream to verify nurses license before we schedule them. And so we have that capability, as you know, in our platform to check licenses. And so it will be a further differentiation as we connect ShiftWizard to services like the license verification service that is a function of our hStream platform. So that's an example of a differentiation yet to come that I hope is this year that will continue to distinguish us from our competitors. And they are, of course, the road map full of those ideas as well.

Vincent, are you asking about CredentialStream on that -- your question?

I think he was actually -- I just got to know from someone. So I guess the same holds true for CredentialStream as it takes advantage of connectivity to the learning center, for example. We're in the middle of going back to customers that have both our learning system and our credentialing system and showing them the interoperability of the early stages of interoperability between those. For example, how logical was it? But if you earn a credential in the learning network, it should auto populate as a credential into your credentialing system. And so the same kind of answer holds is that there are plenty of differentiation to come this year that show interoperability and several that are in place now that we're beginning to market actively.

So Bobby, will you still respond to my question because I got cut off?

I think in both cases, I try to give examples of both ShiftWizard and CredentialStream that are going to be increasingly competitively differentiated by how they access services of the hStream platform, whether it's the hStream ID to create interoperability, for example, your data following you from one system into the other. The example I just gave was a learning credential earned in the learning system following you into the credentialing system and maintaining its primary source verification status. Or a scheduling system that relies on the platform technology to check a license before you're scheduled and sort of verify your license is active, before we schedule you. And so those are 2 examples of interoperability that are, one is actively being marketed and the other is to come this year. But increasingly, the differentiation will come from how these applications interoperate or operate together and how data moves between them and how service is built in the platform power up distinguished features in the application. This is true in learning, scheduling and credentialing. In all cases, we hope to further differentiate it. I think there's also a kind of a broader value proposition of getting these applications interoperable. I think it's more appealing to a COO, a CTO, CFO, when they see a suite of software working together instead of individual separately implemented tech stacks. And so, we're looking for operational synergy, implementation synergy over the coming months and years.

And one last one. How would you characterize pricing in the acquisition market? Is it rich? Has it improved? What would you say?

Well, let's see. We didn't do a deal in the last 13 months. And during that, I guess, I would say in the last quarter or 2, I think, a little bit of softening and some excitement that maybe deal pipelines can pick back up. But the private companies always hold on as long as they can to the past. And so maybe one of the concerning factors was that in the first half of the year. But I don't know how to say it. If you have a hot company that's a SaaS model and it's emerging and growing fast, you're going to be able to demand a premium for your business when you sell it. And so I think that is almost always true. Maybe fewer companies meet that criteria and they're also burning cash. So I think those companies, there's going to be some deals out there, I think as companies try to recap at lower market caps in the next year or so.

Thank you. There are no further questions at this time. I'd like to turn the call back over to Robert Frist, CEO for any closing remarks.

Thank you to our analysts for following our story and helping us tell it. Thank you to our 1,100 employees for making all this happen. We'll look forward to our continued reporting and growth as a company. Thanks for going on the journey all of you shareholders. We'll see you on the next earnings call.

Thank you for your participation. This does conclude the program. You may now disconnect. Everyone, have a great day.