HEALTHSTREAM INC Leases Disclosure
13. LEASES
The Company’s operating lease expense as presented in general and administrative expense in the Consolidated Statements of Income was $3.9 million, $4.3 million, and $4.6 million for the twelve months ended December 31, 2025, 2024, and 2023, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $4.0 million and $4.3 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, the weighted-average remaining lease term was 5.7 years and 6.6 years, respectively, and the weighted-average incremental borrowing rate was 6%. As of December 31, 2025, the Company did not have any leases that had not yet commenced.
The table below presents the lease-related assets and liabilities recorded on the Consolidated Balance Sheets as of December 31, 2025 and 2024 (in thousands).
| Year Ended December 31, | |||||||||
| 2025 | 2024 | ||||||||
| Assets | Classification | ||||||||
| Operating lease right-of-use assets | Operating lease right of use assets, net | $ | 15,272 | $ | 17,453 | ||||
| Total leased assets | $ | 15,272 | $ | 17,453 | |||||
| Liabilities | |||||||||
| Operating lease liabilities, current |
| $ | 2,893 | $ | 2,802 | ||||
| Operating lease liabilities, noncurrent | Operating lease liability, noncurrent | 14,684 | 17,366 | ||||||
| Total operating lease liabilities | $ | 17,577 | $ | 20,168 | |||||
The table below presents the maturities of lease liabilities under non-cancellable leases as of December 31, 2025 (in thousands).
| 2026 | $ | 3,866 | ||
| 2027 | 3,385 | |||
| 2028 | 3,453 | |||
| 2029 | 3,522 | |||
| 2030 | 3,592 | |||
| Thereafter | 3,049 | |||
| Total undiscounted lease payments | $ | 20,867 | ||
| Less imputed interest | 3,290 | |||
| Total lease liabilities | $ | 17,577 |
During the year ended December 31, 2025, the Company entered into an agreement to sublease a portion of its office space in the Capitol View building in Nashville, Tennessee to optimize the workforce performance to deliver positive results for customers, employees, and shareholders. The Company's corporate headquarters remains in Nashville in the Capitol View building, while the Company continues to hire new employees both locally and nationally to support growth. The sublease commenced in April 2025 and will expire in October 2031. The Company recorded sublease income, net of initial direct costs amortization, of $2.3 million during the year ended December 31, 2025. In addition, the Company expects to record sublease income, net, of approximately $3.2 million annually for the next five years and $2.6 million thereafter.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2022 | Feb 28, 2023 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.