HealthStream (NASDAQ: HSTM) reported Q2 EPS of $0.08, $0.01 better than the analyst estimate of $0.07. Revenue for the quarter came in at $57 million versus the consensus estimate of $56.71 million.

The Company adopted the new revenue recognition standard (ASC 606) utilizing the modified retrospective approach effective January 1, 2018, such that the Company will recognize revenue under this new standard for periods beginning on and after January 1, 2018, but will continue to report results for periods prior to January 1, 2018 under the prior revenue recognition standard (ASC 605). To assist in providing comparability against 2017 results, the Company will continue to disclose certain financial information for 2018 under ASC 605 in the notes to financial statements to be included in Forms 10-Q and 10-K for 2018.

The historical financial results of the PX business for periods prior to the closing of this transaction are reflected in the Company’s consolidated financial statements as discontinued operations. Accordingly, this financial outlook for 2018 is for continuing operations only and does not include (a) the gain on the sale of our PX business, which we completed on February 12, 2018, or (b) the results of our PX business during 2017 or the period in 2018 prior to the sale of such business for financial outlook.

On February 20th, we presented our original 2018 guidance utilizing ASC 605. For purposes of comparability, on April 30th we provided guidance utilizing ASC 605 and also utilizing ASC 606. In this press release, we are presenting our updated 2018 guidance utilizing only ASC 606 in light of the fact that our 2018 results are being presented under ASC 606.

For 2018, we continue to anticipate that consolidated revenues will increase six to eight percent as compared to 2017. We continue to anticipate that revenue growth in our Workforce Solutions segment will be in the four to six percent range and our Provider Solutions segment to grow 10 to 20 percent when compared to 2017.

We anticipate operating income for 2018 to increase between 35 and 45 percent as compared to 2017.

We continue to anticipate that capital expenditures will be approximately $20 million during 2018. We expect the annual effective income tax rate to range between 20 and 22 percent for 2018. This represents an effective tax rate of 26 to 28 percent for the remaining two quarters of 2018. The effective income tax rate for the first six months of 2018 was 17 percent due primarily to excess tax benefits from stock option exercises during the first quarter of 2018.

This guidance does not include the impact of any acquisitions or strategic investments that we may complete during 2018.

“Our second quarter 2018 financial results remain solid as we invest in the future,” said Robert A. Frist, Jr., chief executive officer, HealthStream. “We believe we are uniquely positioned to improve the quality of healthcare delivery by bringing choice and selection to healthcare professionals in their ongoing professional development.”

For earnings history and earnings-related data on HealthStream (HSTM) click here.