TruBridge, Inc. Q3 FY2025 earnings call

Key Points

• Chris Fowler highlighted progress in improving earnings, expanding margins, free cash flow, and delevering the balance sheet over 7 quarters. Bookings in Q3 were $15.5 million TCV, with focus on improving booking quality; Encoder investments led to higher-margin deals, and Financial Health bookings in 100-400-bed space increased. Mike Daughton joined as Chief Business Officer to lead sales, marketing, and client success. Offshore transition is progressing.
• Vinay Bassi discussed financial achievements over 2 years: adjusted EBITDA margins expanding, free cash flow improved by $20M YTD 2025, debt reduced by $35M since Jan 2024. Q3 2025 revenue details, recurring revenue being high, Financial Health and Patient Care revenue performance, and margin details.

Total revenue for Q3 2025 was $86.1 million, up ~2% year-over-year. Normalizing for the sunset of Centriq product, revenue would have been up 2.8%. Recurring revenue was around 94% of total revenue. Financial Health revenue was $54.5 million in the quarter, representing ~63% of total company revenue and was essentially flat year-over-year. Patient Care revenue was $31.6 million, reflecting 5.3% year-over-year growth, primarily driven by growth in SaaS and some nonrecurring revenues (excluding Centriq, growth was 8.9%). Financial Health gross margin was 46.2%, almost flat year-over-year. Patient Care gross margin expanded meaningfully to approximately 60%, an increase of nearly 370 basis points versus last year. Encoder business saw higher-margin deals, with year-to-date bookings percent almost doubling, contributing to improved margins.

Forward-Looking

• Q4 2025 revenue expected $86 million to $89 million, adjusted EBITDA $16.5 million to $19.5 million. Full year 2025 revenue $345 million to $348 million, adjusted EBITDA $65 million to $68 million. 2026 expected adjusted EBITDA margin expansion ~200 basis points from 2025 midpoint, driven by continued cost optimization and offshore transition net savings.

• Operating environment factors not entirely within control, such as pipeline conversion challenges in Q3. Uncertainty around Medicaid funding cuts and the One Big Beautiful Bill impacting hospital decision timelines.

Q: Gave a question about bookings, where it landed vs initial expectations, margin from bookings.

A: Bookings were ~20% off expected, Encoder bookings have high margins, year-to-date Encoder bookings percent almost doubled.

Q: Follow-up on hospitals delaying implementation, commonality, Medicaid funding, OBBB.

A: Uncertainty delaying decisions, majority of hospitals on calendar year budget cycle causing delay, but decisions starting to accelerate.

Q: Follow-up on pipeline, bookings growth expectations, retention, backlog.

A: Pipeline has coverage, Mike Daughton to help with bookings, focus on retention, company monitors backlog as it runs the business.

Q: Question on Patient Care revenue, EBITDA margin expansion next year.

A: EBITDA margin expansion next year primarily from cost efficiencies, continued cost optimization efforts, and potential benefits from global workforce optimization.