TruBridge, Inc. Q1 FY2025 earnings call

Chris Fowler highlighted that Q1 results were strong with adjusted EBITDA nearly doubling. Merideth Wilson, leading Financial Health, observed the critical role of the company in client communities, the importance of customer service, and the opportunity to capitalize on the tech stack for automation. The company is increasing investments in standardizing the global hiring process, evolving the workforce mix and automation. Patient Care has a 98% customer retention rate (excluding Centriq) and added 4 net new SaaS customers in Q1. Additionally, efforts are underway to improve accounting processes and forecasting accuracy, with progress in remediating and strengthening key controls.

In the first quarter of 2025, TruBridge reported revenue of $87.2 million. Financial Health contributed $56.1 million, accounting for 64% of total revenue, with a year-over-year increase. Patient Care generated $31.1 million, a 1.3% year-over-year increase. Adjusted EBITDA nearly doubled to $18.2 million, cash flow from operations rose by over $7 million, and the net leverage ratio decreased to 2.4x from 4.4x in the previous year. Q1 bookings totaled $22 million, with $13 million from Financial Health (a 50% sequential increase from Q4 2024) and $9 million from Patient Care (a 60% sequential increase).

For the full year 2025, revenue is expected to be between $345 million and $360 million, and adjusted EBITDA is now anticipated to be $60 million to $66 million. Q2 revenue is expected to be down from Q1 due to revenue timing, and adjusted EBITDA is expected to be lower due to factors such as the annual user conference, revenue timing, and incremental labor costs.

Ongoing uncertainty related to future healthcare funding and potential impacts of tariffs on U.S. businesses, which could cause customers to slow down their decision-making processes.

Q: Congratulations on a great quarter. Could you give us a little bit of context on how your conversations are going? There's a lot of news on the policy side, including tariffs that can affect hospital budgets. So how is that filtering down to your conversations and the timing of your sales cycle?

A: Sarah, first of all, thanks for the nice words. You broke up a little bit, but I think what I've put together was you're looking for additional color relative to potential policy changes with the customers. Yes, how the political or tariff risk is impacting how they view timing of repurchases or expansion? Right now, obviously, coming off of a nice Q1 from a bookings perspective, we haven't seen the immediate impact to it. In our conversations in Q2, we continue to have nice progress on the sales front. I will say that the overall sentiment is just an absolute uncertainty of what's going to happen next. From our standpoint, I don't think it's as much about the tariffs as it is now that we're starting to get some previews of how the budget going forward may potentially impact our customers, I think they're just bracing to see exactly how that's going to shake out. For us, I think the biggest areas of challenge could potentially be around any changes to Medicare expansion. And then also any changes that we see from a reimbursement standpoint. There's obviously quite a bit of conversation around the payment parity, but no clear line of exactly what that is. So what I would say -- and we continue to have the conversations with our customers -- that performance in their revenue cycle is absolutely a huge priority. And regardless of what change comes from Washington, they need to be with a partner that's going to be waking up every day making sure that they collect every dollar. So again, I would say right now, it's a little bit cautious, but we'll continue to monitor and keep you guys on the front page.

Q: I was hoping you could speak more to Merideth's plan of action. And maybe you could tie that to any early impact on retention or maybe given how that will play out over some period of time, any change to your goals around Financial Health client retention?

A: Yes. Jeff, thanks a lot for joining, and good question. What I would say we're working on and what Merideth is probably mostly focused on, again, is the client delight and overall retention. I think where we're focused is making sure that as we continue to scale up our India operation, that we want to make sure as we're hiring varying levels of experience from an employee standpoint, that we've got the infrastructure in place to make sure that we're getting quality output as early as possible so that the customer impact is a positive experience. So I think that's really what -- some of the learnings from last year to this year. And as you heard in the prepared comments, as we think about what a physical footprint can do for us to be able to have that academy to make sure that, one, we're getting the training, the consistency there that we need, the oversight and just the continued efficiency of the work that's being done.

Q: Good quarter, guys. I wanted to ask about the nonsubscription component of Patient Care bookings. It was the lowest that you've recorded in a couple of years. So I just want to know how we should think about that big picture? I mean, you called out a new -- 1 new customer that didn't have automation previously. But is the EHR game now really a market share play? And how should we think about patient engagement?

A: Yes. Thanks for the call, Gene -- or the question, Gene. Again, we have seen specifically on the net new EHR opportunities, obviously, the shift to the SaaS model has taken full effect over the last couple of years. I would think that part of the issue or part of the change in the onetime versus recurring revenue on the Patient Care side to be around some of the last year specific to maybe our AUR reporting, which is an antimicrobial requirement from the government, which did have some implementation fees up on the front end of that, creating some of that onetime revenue opportunity. The vast majority of the new offerings that we have -- I say a vast majority, all the new offerings that we have are really 100% in the SaaS model. So as we think about even the implementations on some of our new EHR offerings, we are smoothing that out across the life of the contract. So that we don't have that lumpiness and see that spike in revenue. Vinay, you want to add anything? No, I think that's the right because there was, like in Patient Care, some of these AURs that you mentioned, and they have -- they create some lumpiness. But whatever we had launched last year, some of the ERP solutions as partners is yielding results, which are all -- mostly, if not all, recurring revenues.