TruBridge, Inc. Q2 FY2024 earnings call

• Continued bookings momentum with $23.3 million in total bookings for the quarter, third straight quarter over $20 million.
• Integrated nTrust solution saw 60% increase in new clients in first half of 2024 compared to same period in 2023.
• Cross-selling efforts bore fruit with $7 million signed in the quarter, including enterprise clients expanding relationships and current CBO clients adding service lines.
• Offshoring initiative with Viewgol saw sequential improvement in EBITDA, 43% of CBO and EVO operation offshore by end of Q2 vs 25% at end of Q1.
• Improved financial operations: accounts receivable down 7.2% sequentially, days sales outstanding down ~6 days, cash flow from operations positive $13.8 million in Q2.

Total revenue for the quarter was $84.7 million. RCM revenue was $54.1 million, accounting for approximately 64% of total revenue. EHR bookings were $9.8 million, and RCM bookings were $13.5 million. Total gross margin was 48.8%, with RCM gross margins at 44.1% and EHR gross margins at 57.3%.

• Q3 revenue expected between $82 million and $85 million, adjusted EBITDA between $11.5 million to $13.5 million.
• Full year revenue expected between $330 million to $340 million, adjusted EBITDA between $45 million and $50 million.

• Lower retention this year due to challenges with prior offshore partner.
• Need to double down on client retention efforts and leverage Viewgol’s experience for better customer management.

Q: Talk about margin progression and pacing of improvement.

A: Chris Fowler mentioned need to give grace to get through year to ensure customer satisfaction with offshore transition, Vinay Bassi echoed seasonality and timing, expecting margins to improve more in Q4 with incremental revenues but longer term seeing continued margin expansion.

Q: How much of strong momentum in bookings is due to improving demand vs execution?

A: Vinay Bassi said it's a function of both, controllable part is focus on customer delight and stemming attrition, non-controllable is market demand tailwind; Chris Fowler gave example of unsolicited calls from prospects to customers as sign of execution playing a huge part.

Q: Status of legacy EHR base and provider utilization impact on RCM?

A: Chris Fowler said retention of EHR base is strong outside Centric, optimistic about EHR business with regulatory impacts; on provider utilization, seeing hospitals expanding services and RCM space opportunity playing out through customers.