TruBridge, Inc. Q4 FY2024 earnings call

Key Points

• 2024 was a year of constant improvement, including rebranding, global workforce strategy, and financial operations. Fourth quarter revenue was $87.4 million (+2%), adjusted EBITDA $17.2 million (+44%). Full year revenue $339 million, adjusted EBITDA $53 million, exceeding guidance.
• Progress on integrating Viewgol with second wave of customer transitions. Full year bookings $82 million, with $14.3 million in Q4, some deals slipping to first half 2025 due to external factors.
• nTrust offering saw 24 deals in 2024, up from prior years. Focus on 100-400 bed hospitals where financial health opportunities grew from 5% to over 20% in pipeline.
• 2025 priorities: Improve customer satisfaction/retention and profitability/growth. New leadership in Financial Health, corporate governance enhancements. Operational initiatives: Financial Health - global workforce expansion (goal to double CBO clients supported by global team), focus on renewals. Patient Care - measure client success by revenue retention, expand wallet share with new offerings, convert to SaaS/nTrust. Sales and Marketing - increase investments in brand and lead generation, weighted toward Financial Health.

In the fourth quarter, Financial Health revenue was $54.7 million, an increase of 7.3% compared to the prior year, representing approximately 63% of total revenue. Patient Care revenue was $32.7 million, a decrease of 6.3% year-over-year. For the full year, revenue was $339 million. Financial Health full year revenue was $216 million, up 11.4% year-over-year, driven by core CBO offerings and Viewgol. Patient Care full year revenue was $123 million, down 15.4% year-over-year, but excluding certain divested segments, it showed growth from onetime contract settlements and nonrecurring revenue.

2025 Guidance

• Revenue expected to be between $345 million and $360 million (+4% y/y), adjusted EBITDA between $59 million and $66 million. Q1 2025 revenue expected $85 million-$88 million, adjusted EBITDA $14 million-$16 million. Midpoint implies 4% revenue growth and 600 basis points margin expansion. Q2 margins expected to step down due to client conference and merit increases, then uptick in second half from improved operations.

• Uncertainty in Washington regarding healthcare funding affecting deal timing.
• Lumpiness in bookings due to larger deals as the company scales.
• Potential short-term volatility from concentrations in specific contracts.
• Nonrecurring items impacting adjusted EBITDA in prior quarters.

Q: Visibility on closing remaining deals expected in end 2024?

A: Some deals delayed by external factors (e.g., hospital acquisitions, state government changes), expected to close in first half 2025.

Q: Sales and marketing initiatives?

A: Substantial investment in marketing to increase brand exposure, target 100-400 bed hospitals to be top of mind for cross-sell opportunities.

Q: Revenue growth contributors?

A: Financial Health (CBO and new offerings) is primary contributor, Patient Care expected low single-digit growth from new products like Multiview and analytics.

Q: Bookings slipping and sales cycles?

A: Some slowdown due to Washington uncertainty, but win rate north of 50% excluding no decisions.

Q: Renewals and financial performance?

A: 60 key CBO clients up for renewal over 24 months, diversified base, renewals spread throughout the year.

Q: EBITDA guidance over-attainment?

A: Mix of cost rationalization, global offshore, Patient Care growth, and momentum from Q4 overperformance.

Q: Revenue conversion from license to SaaS?

A: Not a significant drag, as support revenue transitions to SaaS with more predictability.