Good morning, and welcome to HealthStream's First Quarter 2024 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open the conference up for questions-and-answers after the presentation. I will now turn the conference over to Mollie Condra, Vice President of Investor Relations and Communications. Please go ahead, Ms. Condra.

Thank you and good morning. Thank you for joining us today to discuss our first quarter 2024 results. Also on the conference call with me today 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 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 the 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 today, I'll turn the call over to CEO, Bobby Frist.

Thank you, Molly. Good morning, everyone and welcome to our first quarter 2024 earnings call. As our analysts sometimes say, it was a solid print. In the first quarter, we achieved record revenue and record adjusted EBITDA. In fact, our quarterly financial performance showed year-over-year increases in each of the major categories we highlight in our earnings release. I'm excited to be able to report that hyper-performance. The first quarter revenues were $72.8 million, up 6% over the first quarter of last year and adjusted EBITDA was $17.1 million, up 24% over the first quarter of last year. We were able to reiterate our financial guidance ranges for the full-year of 2024 and right now, we have the full expectation that we'll be able to hit the ball right down the middle of the fairway. We're looking to the middle of the range and performance. So we're excited to deliver these strong financial results and reiterate our financial range objects with an expectation of going right down the middle. Later in this call, after Scotty's discussion about financials, I'm going to describe some of the developments in learning, credentialing and scheduling application suites that are helping drive these results. I do want to back up a little bit and talk about an emerging trend we're seeing that I think is worth calling out. The trend I'm referring to is the increasing amount of attention that health organizations are paying to their workforce kind of broadly defined. Now more than ever, we believe that Healthcare CEOs are embracing the fact that their workforce is their most valuable asset and the staffing shortages that were exacerbated by the pandemic really served to reinforce the ongoing importance of taking care of your workforce and hopefully, from our point of view, investing in them…

All right. Thanks Bobby, and good morning. So, I'll jump right in and go over the financial highlights for the first quarter and unless otherwise noted, the comparisons will be against the same period of last year. I'm pleased to share that we continue to deliver solid performance for the first quarter, growing both topline and adjusted EBITDA. Revenues for the quarter were $72.8 million, up 6%. Operating income was $5.7 million, up 97%. Net income was $5.2 million, up 99%. Earnings per share was $0.17 per share, up from $0.09 per share, and adjusted EBITDA was $17.1 million and was up 24%. Revenues increased by $3.8 million or 6%, coming in at $72.8 million, compared to $68.9 million in last year's first quarter. Revenues from our subscription products accounted for 96% of total revenues and were $70.2 million, increasing by 6%. Subscription revenues, as we've defined them for some time, predominantly include SaaS solutions, but also software license and maintenance fees. Software licenses are associated with legacy products such as our ANSOS scheduling solution and are occasionally sold to existing customers. I'm calling this to your attention here because one-time license revenues were approximately $0.8 million in the first quarter, and they increased by $0.5 million over the prior year. In fact, the $0.8 million of revenue in the quarter came exclusively from one ANSOS sale. We do not expect one-time license sales to continue at this level, and I want to remind you that the $0.8 million of first quarter license sales should not be modeled to repeat in upcoming quarters. Additionally, our professional service revenues declined by $0.4 million, or 13%. In the last quarter, I discussed two products that are experiencing declines in revenues, so I want to give a quick update on those. The first…

Thank you, Scotty. I'm going to highlight a few of the areas, where we saw some success in each of our three primary application suites and talk a little bit about some advances in our [Technical Difficulty] technology, we call hStream as well. So, our HealthStream Learning Center is the application, it's kind of a flagship product of our learning application set and it continues to be strong in the market. But importantly, when the HealthStream Learning Center customers are up for renewal, we frequently see customers purchase multiple new solutions along with it when they renew. And this is kind of an example of expanding wallet share is kind of a way to think about that. And one of our academic medical center customers used their renewal of the HealthStream Learning Center as an opportunity to evaluate how HealthStream might help them serve their entire clinical workforce. And this may be an example of the tailwind I mentioned earlier. The customer already purchased various HealthStream solutions for different subsets of their population, and when it came time to renew, they concluded that by pairing that with the renewal with a purchase of HealthStream competency suite and that would benefit their entire clinical workforce, adding on the competency suite to the learning center. The competency suite is a comprehensive and cohesive bundle of applications and content used to develop the clinical staff, and in this case they added that kind of that entire bundle. The customer also added our nurse residency program, which onboard newly graduated nurses, which is kind of an important kind of continuum of service from some of the work we're doing now in nursing schools. And so, we saw them add the nurse residency program to the account as well. So, the net result was the…

Thank you, sir. The question-and-answer session will begin at this time. [Operator Instructions] And our first question comes from Matt Hewitt with Craig-Hallum. Your line is open.

Good morning and congratulations on the strong start to the year. Maybe the first question, it appears that the employment situation at your customers, hospitals, healthcare systems is improving since last year. And as that occurs, how are you seeing that change the purchasing decisions, I think you spoke a little bit about how you're seeing, your customers are paying more attention to their workforce today than maybe they did pre-pandemic, but are you seeing them even starting to implement HealthStream applications and solutions right at the beginning with the onboarding process and are you seeing, I guess, a greater wallet share with those customers starting on day-1 versus upon renewals and downstream from that initial hire?

I don't have to think through all that. There's a lot of different trends in purchasing and patterns. I think one of them is we've done a little better job of bundling some of our products into suites now that can result in a little higher order value. And I mentioned that competency suite sale as an add on earlier. The competency suite is kind of an aggregation of two or three products that used to be sold individually, and now they're viewed as a more comprehensive tool set to develop the competencies of staff. And so, we're learning to position things in a little better way that's more consistent with the tailwinds I mentioned. I definitely think the pandemic created a greater, as I mentioned earlier, a greater awareness of the need to invest directly in your workforce and make their lives better and help them do their jobs better and skill them up for new job opportunities inside the organization. So, I think there is an earlier increased awareness in the need for investing in workforce development, you can't just outsource your workforce. I think people are now willing to invest hopefully a little more in the workforce and make that more of a priority discussion in the C suite. And then as far as moving upstream, I think yes, on the call, we demonstrated our strategies for moving upstream are getting to the workforce before they become a workforce. So, the nursing school market, we're just -- it's very early, but we're excited about what that can mean for us, as we can catch people earlier in their career and in fact, I think we did release a white paper study, a press release not too long ago that talk about the workforce's increasing need for mobility and to retain -- to find and develop and retain the nurses, and that they were willing to take jobs at the places where they had kind of interned or done their rotations. And hospitals need more help in recruiting those precepted students and making them full time employees and we think HealthStream might be in a good position to help with that problem over time. Again, it's really early and early research, but a lot of the students doing clinical rotations or the nurses at hospitals we think are great hiring candidates down the road. So another way, we're going upstream, as you mentioned. So, yes, in all those ways, I just -- I think a little better attitude customers about investing and a little better bundling strategies for us in our deal pipeline.

That's really helpful. Thank you. And then maybe a separate question regarding the opioid course. Obviously, you know, it's nice to have a tailwind like that, a government mandated tailwind. How quickly are hospitals expected to implement that type of a course? And what could that mean? Is it a driver for this year or could it add 1% or 2% to revenues this year, just trying to think of how to kind of factor that in?

Couple of things here. And you pointed out rightly, this is kind of a unique opportunity. So we don't want to get, I mean, it's exciting, right? We did $0.5 in the quarter, so if we can find a way to keep that rate up, and remember, that's direct to professional sales. So, we don't necessarily see any institutional purchasing of that course or certainly not much. But the direct opportunity to get to a physician, who has a renewing license where this is a requirement, drove a $0.5 in sales in the quarter. So, yes, I think if we can keep it up, it's going to be a nice small contributor, but we also want to be careful to not over extrapolate our capabilities of selling direct individuals, I think it's kind of a good fortune that requirement and the curriculum we already had and our ability to market now these channels, our new e-commerce tools, set us up to do well in the first quarter, but it is a kind of a one-time mandate, so we don't, again, at some point in the next 24 months, everyone will have met the requirement or not. And it was a unique set of circumstances, so we don't want to over excite about that. So, you know, we just want to -- that's why I keep saying the middle of the fairway, middle of the fairway. You know, we had -- and we also had an anomalous bit of revenue in the one-time license, which we don't -- obviously, we don't focus on selling the enterprise license like we mentioned on ANSOS, but we did. We're not going to -- customer wants to expand their use of ANSOS, we're going to take that business and we don't want to overengineer the forecast based on that one-time license sale, which I think Scotty called out at about, I think it's $700,000 or $800,000. And so, we -- middle of the fairway, middle of the fairway is what we keep saying.

Got it. All right. Thank you very much.

Thank you. Our next question comes from Jared Haase with William Blair and Company. Your line is open.

Yes. Good morning. Thanks guys for taking the questions. This is Jared on for Ryan Daniels. Bobby, you talked a little bit, I think, in the credentialing segment about a win with a payer. And I'm curious, I think that's relatively new. So just be curious to hear a little bit more as to how we should think about the opportunity with payer customers. And then specifically, it sounded like that was a blues plan, so I'm wondering if you see an opportunity here to sort of further penetrate the network of blues plans nationwide.

Well, okay. So, first, we're excited you picked up on that. And, yes, it's a new type of customer for us. We think that our credential stream application and the way we built it might give unique benefits to that market segment over time, the way that it's been engineered to work and create data mobility, sometimes health plans are owned by health systems, and that might create some interoperability benefits that we see potentially in the future. So, yes, it's an example of one kind of exciting new development if you're in the sales team in that area. And we do think we have a unique set of capabilities in the app that could be beneficial to health plans. That said, health plans are hard to sell too. It's new for us. We got a lot of work cut out for us. But if you think in terms of two to three years, I'd love to see that become a thing for us, where we can have a presence in that segment as well. So, again, hopefully, the way we built the application, and its interoperability and potential data mobility will provide some benefits to health plans, particularly when they're owned by hospitals and health systems. And, yes, that was a blues, but we don't claim to have any particular expertise in selling the blues. It's new for us again, and required some new modeling, new selling approach, but we'll see where it goes. I think we got a shot at making that an opportunity that repeats more than once.

Got it. Yes, that makes sense and look forward to hearing more over the coming years. Maybe another follow-up just from the prepared remarks. Bobby, I think you talked a little bit about enterprise purchasing collaboratives and I know it sounds like it's not a material part of the business today, but I was hoping, number one, if you could maybe just contextualize sort of what portion of bookings or ARR growth comes through a collaborative purchasing today, and maybe where you expect that to get to over the next few years and then it also sounded like that's evolving with some additional capabilities. So we'd love to just hear a little bit more about that as well.

Yes. So, the collaborative purchasing process for enterprises kind of benefits them the most. It's a way for them to organize and orchestrate their purchasing of certain of our offerings. So, if they've got you know a dozen different things they're looking at, it's a really organized kind of 90-day way for them to see all the products in the bundle, organize, demand for it across multiples, say, if they have 30 or 40 hospitals, they want to figure out how much they need at each facility based on the CNOS at those facilities. So it's an engagement model we've used for a long time, used to historically be very manual, kind of led by people and essentially our consultative sales process. But we formalized that into digital tools that gives the organization visibility and how demand is growing in each, you know, as orders are kind of indicated on a product that kind of aggregates the orders, so at the enterprise level, they can see that. At the end, there's a discounting model that lets them get a discount based on the volume commitment levels as they grow, so it almost gamifies the purchasing process and it's budget aligned, so they can do the whole process aligned with their budget purchasing cycles. So, price collaborative is again not widely deployed, but we've increasingly built digital tools to facilitate it. So, for example, now the pricing models are connected directly to our price book capabilities in sales force and our sales tool sets that we have. So now the collaborative software will present, as you commit to higher volumes in the purchase process, you can see the discounts occurring automatically because the way it's connected digitally to the price booking mechanism that we hold in Salesforce. So, you know, I…

Thank you. Our next question comes from Richard Close with Canaccord Genuity. Your line is open.

Good morning. Thanks for the questions and congratulations. Maybe a follow-up to Matt's first question. A good example there with the 31% increase in ARR with the academic medical center. I'm just curious, when you look at your book of business for the SaaS offerings, like what percentage of customers come up for renewal on an annual basis and then maybe putting that 31% into perspective, are you seeing an acceleration, I guess growth in that percentage increase in ARR versus one to two years ago, maybe any insight or perspectives on that would be great.

I think overall growth rate would be much higher if that was more prevalent. I think we obviously gave an exception here, which is one that bundled, but our sales team, our account manager, focused on this kind of account expansion. We do see some give and take, so if they had four products up for renewal, they renewed three of them, maybe they used one less and they added two new ones, so that's what account managers do. We have about 60 account managers that focus on this cross sell, upsell. There are puts and calls to the whole process. Again, if they have four products, renew three, they say, well, we didn't use that one as much. But our account managers, if they're really good, they do what this group did here, and they add two or three new products. The other thing that's shifting, Richard, and so I would say we give the best example. We don't want to overengineer, it's not happening on every renewal yet, but it's of course, our model and our objective. That's what we want to do. The other thing that's happening is and so a bit is that we're doing a better job bundling things, like if you take these companies examples, so the initial order value can be a little greater, and that's resulted in a little delay in the Q1 pipeline, but more bigger deals in the pipeline than we've ever seen. And so, for example, in the comp suite is a lot of content that we used to sell separately, the checklist tool is in there, Jane is in there. And so, there's a way now that instead of a CNO making an argument upstream 4 times to buy four separate products, they can evaluate making a real investment in their workforce to buy the suite. And so that's some repositioning that [Technical Difficulty] won. And the effect is more bigger deals in the pipeline than we've seen, but also in Q1, a little delay purchasing in some areas as we made that shift. So, I'm excited about kind of hopefully where Q2 takes us through this bundling strategy and hopefully that grows that ARR that you're talking about. But, you know, obviously, overall, with our overall growth rate, we're not seeing every renewal come up and grow by 31%. That's a case study that we want to emulate more than it is an example of broad occurrence.

Okay, that's helpful. And then maybe on the decline in renewals. ANSOS, I understand. Is there anything to be concerned with the quality manager, that seems to be something new, just want to make sure I understand that.

Yes, the quality manager was from an acquisition years ago. It's focused on skilled nursing market. And that market is under a lot of stress financially and kind of re-engineering and working on defining their space better I think, so slowed purchasing there, tighter budgets. The quality manager, again, is not overall a huge part of our business, but it's enough where we don't like to see declines, and so we'll fight to continue to position that product, but it's predominantly sold to the skilled nursing market. We're building a version that could be sold to hospitals, but that's a more competitive space. So, I think just in general, we have dozens of products. This is one of the smaller ones that may be facing kind of a market level challenge, and we'll do what we can to fight through it, but [Technical Difficulty] we did note a decline along with ANSOS, not as big as ANSOS, so not as big a risk.

Okay, that's helpful. And then, you know, I'd welcome your perspectives. You just talked about the pipeline, some bigger deals in there, maybe a little bit longer to get across the finish line, but it doesn't sound like you're too concerned with that. I'm just curious, with respect to change healthcare and everything that's gone on with that over the last several months, have you seen any impact in your book of business in terms of potential new business or renewals, people pulling back just based on everything that's going on with the change healthcare, I'm just curious.

No, I don't know, Richard, if I've been able to relate the change healthcare to any purchase patterns. Again, we saw a little lighter purchase patterns in Q1 than we wanted. I think that's due to some of our re-bundling strategies. We had a great fourth quarter, so we pulled a bunch of deals in the fourth quarter. We're rebuilding for the second quarter, so we've got some work to do there. But I haven't been able to relate that to any macro trends or something like the change healthcare, kind of, challenge that occurred for the whole industry. I see a little bit more duress in the skilled nursing market, a few more acute care systems are known in the public to be under financial stress, but also, I think tailwind, so the headwinds are kind of some macro condition things for customers. But the opposite, in fact, is the workforce trends that we're seeing, the interest in the workforce. So the bundling and the bigger deals and the more bigger deals in the pipeline is exciting, but hopefully it doesn't take too much longer to close them. But I think that is maybe a more direct result of the interest in both how we're bundling our products and the interest in investing in the workforce, which is a direct shift, I think, in their attitude about the value of retention and developing versus maybe pre-COVID. And I think they got so tired of staffing nurses filling majority -- a lot of their positions, they want to develop their own employees now. So I hope that plays out over the next few years, is what we're hoping.

Okay. That's helpful and good to hear. And then maybe, Scotty, with respect to sales and marketing, as we think about the second quarter through the rest of the year, is there anything to keep in mind in terms of maybe seasonality or events or anything like that with respect to the remaining quarters?

Yes, I think, Richard in marketing in particular, we've set an expectation, we planned our budget to attend more in person events, so we actually had one in the first quarter. That was our own customer conference for our credentialing customers called Thrive, that was the name of that event. We also plan to continue to do more events throughout the course of the year. I think some of those tend to be, you know, scattered across the quarters, but I don't know if there's a particular quarter where we'd see kind of an outsized presence, necessarily, or that would impact the P&L materially, but there should be some continuation of events that we expect. You know, hiring -- can expect us to continue to hire sales positions as needed. So that should feather in across the year, but again, probably not going to impact any particular quarter significantly.

Okay. That's helpful. Thank you very much.

Hey, Richard, I'd like to just reinforce a couple of things. The quarter was obviously strong, but there were a couple one-time comparators that we just need to make sure, that's why we keep saying middle of the fairway, you know, we don't want to overengineer the result. The ANSOS one-time license was a one-time benefit. And also, on a year-over-year basis, the restructuring last year, which we did, it's kind of also an expense change that, you know, we got some benefit from, but we didn't do another reorg. And so, we just want to be excited about the quarter, and it's the total result. We also want to be, you know, and we point out some of the things that could impact our future in a positive way. But right now, you know, we're sticking to our range and kind of pushing people to think about the middle of the range is what where we think we are.

Okay. That's very helpful…

For the full-year and for each course. Yes, just kind of really strong, exceptional first quarter, even from a free cash flow standpoint, you know typically, for example, another trend would be in the second quarter, our free cash flows are not as strong, I think, Scotty can comment on maybe more, but that's a quarter where we pay out a lot more royalties and commissions are, I think, usually higher than Q2 and Q4. So maybe Scotty can comment on that -- Q1 on free cash flow as well.

Yes. Sure. Yes, I think if you look back at last year, in particular, and probably look at several years of trend, you'll see that Q1 and Q3 are typically our strongest free cash flow quarters, with Q2 and Q4 tending to tail off. I think even last year, second quarter was flat to negative. And so, another consideration is just timing of Federal income tax payments, state income tax payments tend to not be on a quarterly recurring basis. So, you should expect some of that to pop in the second quarter as well. Similar trend that we saw last year.

Okay. Thank you very much. I appreciate it.

Thank you.

Thank you. Our next question comes from Constantine Davides with Citizens JMP. Your line is open.

Hi, good morning. I apologize if I missed this, but reporting a consolidated ARR has been something you talked about previously in terms of a new way for us to understand the business better with an expectation that we get something around midyear. Can you just provide us with your latest thoughts there and if there might be other potential KPI's you're also considering?

Yes, I mean, we're trying to chase down everything from return on invested capital. And when we looked at it, there's 30 ways to talk about it, we're looking at internally, we use ARR at our account management level, at the account level, but not the company level. And so, figuring out how to calculate and reliably do it, we would probably have to commit to a metric internally for a few quarters and see how it plays out before we release it publicly. So, we're probably now looking at Q3 at the earliest for new metrics. And so, no Constantine, nothing new to report today, but we're working on it, you know, because we retired a metric, we're working on finding other new metrics. Scotty, do you want to comment any more on the things we're looking at, at least to give a hint about it, but I do think we're several quarters away because again, we would have kind of more adopted internally, run it for a few quarters, and then figure out how to talk about it, get our definitions straight that we would want to use, you know, of course we have our own internal definition, free cash flow and things that we monitor, but nothing planned to release right now. Scotty, any more details?

Yes, I think ARR is one that we're obviously, we've looked at and used internally, as Bobby mentioned, on a more an account-by-account basis, but you know, Constantine, you know, some other retention metrics, we're considering whether or not those are worth sharing publicly. But, you know, obviously been focused on those internally as well, but just trying to get to the point where we want to share those publicly. So net retention in particular is a possible metric as well.

Great, that's helpful. And then, Bobby, the 104 organizations you called out hitting the portal, I just want to be clear, they're not paying at all for that kind of access. So I guess, you know, what is the expectation on maybe starting to monetize that and what do you need to do to commercialize that or support it? And how -- is that sort of a later this year event, is it a next year event, just wondering how to think about that opportunity.

Yes, sure. So a couple things. First of all, effectively they are paying for it. And here's how. When you buy an application like HealthStream Learning Center, you also buy a subscription to hStream for Learning. hStream for Learning is a license in your agreement that gives you access to some of the APIs that comes with your right, and you do pay for that hStream for learning subscription. So those two subscriptions together are what give you the access to several APIs as a customer. So, most of those 104, they are utilizing the rights they've gained by paying for the hStream for learning license, for example. That said, we have had some examples, commercial success of individually licensing some of the data sets, and we have some proposals out to other customers to license the functionality of the platform directly. And I think we've given some examples. But the -- as we get more and more of our data sets, like our privilege library, our regulatory compliance library, that are content libraries directly accessing them through the platform for a license fee, for example or we've also given the example of looking up a license validity. We currently give our customers access to that function in our applications, but we have an example of a third-party licensing that function to check a license validity on an API basis only. And we had a health system that didn't buy an application from us, they just paid for checking licenses. And so, we have some limited examples of directly monetizing both the data and the functionality of the platform. But mostly, the 104 people and 200 new developers in the portal are there by the right they gained by paying for their hStream for learning license and they're utilizing those APIs to thread our technology more into their technical environment, like their [Technical Difficulty] for example. So, it is paid for in a way. In fact, it's part of, if you say what's the value proposition of hStream, the platform? Customer would say, oh, I get access to the developer portal, and I get to use some of these APIs. A lot of them are being engineered in a way where they could be sold to non-customers, directly the APIs, and that will be the learning journey. And I hope to have examples of monetizing directly in that way, in each category of data and APIs by the end of the year.

Got it. Thanks. If I could just squeeze one last one in here. Obviously, you guys are in a really good cash position, no debt. In terms of just M&A opportunities, I'm just curious, are you pretty committed, at least in the near term, to the three application suites you currently have or is there a possibility you even start to sort of expand upon that prior to having the unified platform sort of fully realized?

Yes. I think, Constantine, we are already focused on expanding the kind of these three areas -- these three application suites, meaning within their own context. So if we find something that bolsters our learning capability, that would be something to look at our credentialing, our scheduling, but not adding a fourth dimension. The only fourth dimension we have is the platform itself, we call hStream, so we want to get all four of those, the three application suites and the hStream platform working together really well. And I think this is the year, where we want all these ways to demonstrate that interoperability. We just talked about one, which is when you license the learning center and you get the license hStream for learning, you get access to the APIs. That's a good example of adding value to our network. And so, our M&A strategy is adding to those areas that they already exist more than creating new areas of business. And focused on the interoperability is kind of a key word for this year and also focused on the migration of legacy customers, so if you're on a legacy credentialing application that we acquired to say the credential, the modern application we've been building and selling now with over 750 accounts on it. So, you'll see this year as more of this on conversions from legacy to existing, which unfortunately don't have a lot of revenue growth, I mean they do grow revenue a little bit when we convert, but what they really do is get people solidly on the new application suite. So that's a focus this year and then our M&A strategy specifically asked about is to bolster existing areas. So incremental add-ons to existing areas more than expanding the model into new areas. Now, if we get it all working in the next 18 months, then maybe adding a fourth operational dimension to the network would be exciting. But right now, M&A would be focused on areas that strengthen the current lines of business.

Thanks, Bobby.

Thank you. Our next question comes from Vincent Colicchio with Barrington Research. Your line is open.

Yes, Bobby, another strong quarter for ShiftWizard. You added a few new clients. Curious if they were mostly, I assume they're mostly mid-market clients. And if that's correct, when may you be prepared to move up to larger enterprise clients?

Well, we're working on that, I think you're right. I mean, generally that product is great. We have some good examples of big systems that are using it. But I think in general, the successes are coming in the mid-market right now and that's the focus of our sales team. So, we continue to try to expand this capability and make it more relevant. We have ambition to integrate properties like NurseGrid, the app, to the ShiftWizard application, which would extend its functionality. And so, I think right now, though, for the next six to nine months, maybe even for the full year, the remainder of this year, our focus is at middle market.

And one last one. Anything in the competitive market worth calling out since last quarter?

Well, you know, no, I don't think anything particularly, I mean, everyone, including HealthStream is working on their AI strategies, so we see different approaches to that, you know, with our Jane Technology continues to evolve, we're excited. We have some things in the pipeline to refresh our learning technology stack that we're really excited about for the second-half of this year, so we're working on our competitive positioning there and our thought leadership and our application leadership in that area, which hasn't been revitalized in quite some time. So that's a little sneak peek that we've got coming in our learning business that we hope to catch the competitors with. So but in general, it is a very competitive landscape with lots of good startups and big established companies as well. And we're just fighting for our piece of that or more than our fair share.

Thanks, Bobby.

Thank you. Our next question comes from Stephanie Davis with Barclays. Your line is open.

Hey, guys, thank you for taking my question. I'll try to keep it brief, given the length of the call, but you've been talking a little bit more about sunsetting activity and being more proactive on the prepared remarks, is there first any way to tease out what your growth would look like excluding the sunset impacts and get a cleaner number for your go forward? And as a follow-up, could you talk to us more about maybe the pushback you're getting and any sort of updates on the timeline for the process?

Yes, I think we've determined early this year, like in January, that we need to focus in some areas, like where [Technical Difficulty] so credentialing and scheduling, and both have legacy platforms, that the message to our existing customers is two-fold. We're not sunsetting, so that word we need to tone a little bit, because we're still, of course, supporting and releasing enhances to some of those legacy platforms and communicating frequently with customers how to better optimize their use. So, you did see, for example, expansion of ANSOS. We actually had two big wins at ANSOS, we were able to convert another big contract into a more healthy model financially, and then we had the big ANSOS license expansion. So we are supporting those. We're just not actively outselling. If a customer wants to expand useful sell, but we're not sunsetting. We are changing the tone of our message, though, beginning in January, at that conference that we mentioned earlier, we said now is the year to migrate to the SaaS application stacks. And so, that's different than stay comfortable where you are and wait for migration, now we're actively promoting to customers that now is the year to migrate. And so the tone of the sales organization, and the tone of HealthStream is that. And as I mentioned, that does tamp down growth a little bit, because you're kind of switching from $1 set to another. There is a bit of an uplift in the annual recurring revenue when you [Technical Difficulty] application from the maintenance models that they're under. So it's positive, but it's not nearly the same as, say, acquiring a wholly new customer. So yes, that does have a little bit of a dampening effect on to have that as a focus has a bit of a dampening effect on the topline. But look, it's the healthiest thing to do and the right thing to do is to begin a more aggressive migration strategy from the older. And so, but we're not doing that by actually sunsetting, we're doing that by encouraging and stating and giving examples of where migrations are successful. We're just better at it, we're better at the tools, so you talk about barriers. We have better data migration tool sets, we have better methodologies. We've learned a lot from the early migrations. And overall, our teams are doing a great job. And so we're communicating. We have more confidence, we could handle more migrations now too, because of all that I just mentioned. So, great question. It does -- it makes topline growth look a little less stellar to make that a focus, but it is absolutely the right thing to do for a 24 month horizon. And again, we're better equipped technologically to facilitate those and the marketing message has changed. So thanks for the question and hope I got the answer.

Thank you.

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

Thank you, everyone, and congrats to our employees a lot of hard work going on to make all this happen. Look forward to reporting the next earnings call to everyone and we'll see you on the next call. Thanks everybody.

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