TruBridge, Inc. Q2 FY2025 earnings call

• Represented TruBridge at the White House for the CMS HealthTech ecosystem event and signed the CMS interoperability framework pledge. • Working with a third-party consultant to enhance operations, drive efficiencies, and unlock value of existing customer base. • For CBO clients: enhanced resource management, temporary pause in global hiring, moving towards establishing physical presence in India, and completed leadership hires. • Larger deals take longer to implement, so some Q1 and Q2 signed deals won't contribute revenue until 2026. • Revised EBITDA outlook: midpoint at 18.5% margin, driven by efficiencies in Financial Health (global offshoring, resource management) and Patient Care (operations streamlining). • Leveraging AI internally to drive efficiency and externally to enhance client experience.

Financial Health revenue was $54.3 million, representing 63% of total revenue. Patient Care revenue was $31.4 million, increasing approximately 1.1%, and excluding Centriq's contribution from last year's Q2, patient care would have grown almost 4%. Bookings came in at $25.6 million on a TCV basis, up 10% year-over-year; on ACV basis, bookings were $19.6 million in Q2, up 13% sequentially.

• Lowered top end of revenue range and raised adjusted EBITDA range. • Revenue adjustment due to CBO client retention lower than forecast and delayed revenue recognition from bookings. • Third quarter revenue expected to be $85 million to $87 million, adjusted EBITDA $14 million to $16 million. • Full year revenue between $345 million and $350 million, adjusted EBITDA between $62 million and $67 million, with adjusted EBITDA margin midpoint at 18.5%.

• Clients holding cash due to ongoing external policy uncertainty. • Larger deals taking longer to implement, causing revenue delay. • Client retention may not improve as expected.

Q: You mentioned a number of savings and efficiency initiatives. Is there any additional color you can help us with scaling that or pacing of how that may come on board?

A: Last year's cost efficiencies were low-hanging fruit. Now working on modernizing client support organization, with savings likely from Q4 onwards. Run rate savings in low single-digit millions. Goal is to reach mid-20s EBITDA margin.

Q: Have you had a chance to check in with your client base and see how they're thinking about budgeting and if it has any impact on the pace of signing contracts or expanding contracts?

A: Pulsed clients, uncertainty earlier, now hospitals starting to plan. Could have potential headwind to second half of year, but long term is opportunity to help customers navigate new landscape.

Q: What are the leading indicators and the macro environment telling you right now about your ability to deliver that kind of consistent above $20 million bookings level for the rest of the year?

A: Feel good about bookings performance, balance between Patient Care and Financial Health. Patient care net new market has wins but hospitals still dug in on EHR. Financial Health sees demand for RCM stabilization. Expect to continue performing consistently.

Q: Have you or would you disclose the name of that third-party consultant that you referenced in your prepared remarks? And secondly, on the client attrition side, what -- where are these clients going?

A: Won't disclose the third-party consultant name. Most clients going back in-house, vast majority to hospitals, leaving door open to regain them.