NASDAQ:TBRG TruBridge Q2 2024 Earnings Report $12.34 +0.10 (+0.78%) Closing price 04/17/2025 03:59 PM EasternExtended Trading$12.34 0.00 (0.00%) As of 04/17/2025 04:05 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Ooma EPS ResultsActual EPS$0.08Consensus EPS $0.15Beat/MissMissed by -$0.07One Year Ago EPSN/AOoma Revenue ResultsActual Revenue$84.73 millionExpected Revenue$80.71 millionBeat/MissBeat by +$4.02 millionYoY Revenue GrowthN/AOoma Announcement DetailsQuarterQ2 2024Date8/8/2024TimeN/AConference Call DateThursday, August 8, 2024Conference Call Time4:30PM ETUpcoming EarningsTruBridge's Q1 2025 earnings is scheduled for Friday, May 9, 2025, with a conference call scheduled at 8:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by TruBridge Q2 2024 Earnings Call TranscriptProvided by QuartrAugust 8, 2024 ShareLink copied to clipboard.There are 8 speakers on the call. Operator00:00:05Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to TruBridge Tutor Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question and answer session. Thank you. Operator00:00:26I would now like to turn the call over to Drew Anderson. Drew, please go ahead. Speaker 100:00:32Thank you. Good afternoon, and welcome to the TruBridge 2nd quarter 2024 earnings conference call. Leading today's call are Chris Fowler, President and Chief Executive Officer and Vinay Bassey, Chief Financial Officer. This call may include statements regarding future operating plans, expectations and performance that constitute forward looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The company cautions you that any such forward looking statements only reflect management expectations and predictions based upon currently available information and are not guarantees of future results or performance. Speaker 100:01:14Actual results might differ materially from those expressed or implied by such forward looking statements as a result of known and unknown risks, uncertainties and other factors, including those described in public releases and reports filed with the Securities and Exchange Commission, including, but not limited to, the most recent annual report on Form 10 ks. The company also cautions investors that the forward looking information provided in this call represents their outlook only as of this date, and they undertake no obligation to update or revise any forward looking statements to reflect events or developments after the date of this call. At this time, I will turn the call over to Mr. Chris Fowler, President and Chief Executive Officer. Please go ahead, sir. Speaker 200:02:00Thank you, Drew, and thank you to everyone for joining us today. I'm pleased to report that our continued bookings momentum, strong revenue performance, EBITDA margin expansion, dramatic improvement in cash flow from operations. Our total bookings for the quarter came in at $23,300,000 marking the 3rd straight quarter over $20,000,000 At the 1st of the year, we said that we were cautiously optimistic about our sales momentum and that continues to be the case. We have also talked about the 2 step process for selling our RCM services. The first being educating the client about the virtues of outsourcing and secondly selling TruBridge as the vendor. Speaker 200:02:43While still a bit anecdotal, we are seeing promising signs that the market is becoming more educated on outsourcing, thus allowing us to focus more on simply selling TruBridge as their future partner. Looking deeper at our bookings, our integrated nTrust solution is resonating in the market. In the first half of the year, we saw a 60% increase in the number of new nTrust clients compared to the first half of twenty twenty three. Our fully integrated solution is better for our clients as the shared risk SaaS model eliminates the need to budget for new products, price increases or ongoing maintenance payments and is a benefit to TruBridge as those clients represent a higher lifetime value for us and tend to be stickier over time. Our cross selling efforts are bearing fruit with $7,000,000 signed in the quarter. Speaker 200:03:35Several enterprise clients expanded their relationship with TruBridge to include coding and additional billing and collecting opportunities and current CBO clients added service lines like ambulatory billing even in instances where they're not running our EHR. Importantly, at an increasing rate, our clients are turning to TruBridge as their sole revenue cycle partner even when they're not yet ready to fully outsource. Last quarter, we spent time discussing the timing of our bookings to revenue conversion. While those larger deals can still take time to implement, we have seen the rate of conversion slightly decrease this quarter. We are laser focused on accelerating the implementation of new contracts, while being mindful of our customers' limitations and their time constraints. Speaker 200:04:22Much of the work Vinay and his team have done to increase visibility into how and when bookings convert to revenue has been a key piece in managing this figure. At this point in the year, we have over 90% of our projected 2024 revenue under contract and based on our pipeline, we're optimistic the momentum in bookings will continue into the back half of the year. During the quarter, we also made progress on our offshoring initiative and saw early successes from our acquisition of YUGAL. We saw sequential improvement in EBITDA during the quarter and feel confident that Bugle will achieve the $4,500,000 adjusted EBITDA target for the year. At the end of Q2, 43% of our CBO and EBO operation is offshore compared to 25% at the end of Q1. Speaker 200:05:12During the conversion, we are maintaining overlapping staff to ensure a smooth transformation of service. In addition, we tend to staff new opportunities ahead of the anticipated contracts and expect these savings to ramp over the next few quarters. For these reasons, we remain confident in our long term margin expansion, but believe that will be muted in the near term. As we stated last year, we did see some hiccups with our offshore partner, which spurred us on to the acquisition of our own captive offshore operation with Bugle. But some of last year's challenges with that offshore partner has translated into slightly lower retention this year. Speaker 200:05:51To counter this, we're doubling down on our client retention efforts and being more proactive by leveraging Beagle's extensive experience and best in class approach to customer management, specifically getting the domestic client management teams and offshore production teams aligned quickly and as smoothly as possible. We look to end the year on stable footing and continue to be optimistic about the delivery of the offshore staff. Vinay will provide an update on the progress he continues to make on our financial initiatives, but I would be remiss not to mention how pleased I am with the improvements he and his team have made thus far. Overall, this was a solid first half to our year and I believe we're delivering sustainable results. While our transformation is still underway, we are pleased with the progress we have made in both of our business units. Speaker 200:06:41The rural and community market is still our focus and we will continue to advance our products and services to keep care local. With that, I'll turn the call over to Vinay. Speaker 300:06:51Thank you, Chris, and thank you all for joining us today to discuss our 2nd quarter results. In addition to the strong operational performance that Chris just highlighted, we also made improvements to our financial operations. As Chris mentioned, we are working diligently to enhance our financial quality, controls and forecasting. In the Q2, we saw some early indicators that our efforts are paying off. One of my first priorities was to improve our cash collection and management. Speaker 300:07:30To that end, as I mentioned last quarter, we added additional headcount and implemented a process of daily AR and weekly payables review. Although these are early results, the metrics are moving in the right direction. Accounts receivable is down 7.2% sequentially. Days sales outstanding are down approximately 6 days from Q1. At the same time, accounts payable increased just over $4,000,000 as we are becoming more regimented aligning with the terms of the contract. Speaker 300:08:07The next priority was getting the business to free cash flow from operations positive. In the second quarter, we delivered positive 13 point $8,000,000 of cash flow from operations, primarily from improved working capital management and improved profitability. Looking forward, it is our goal to remain free cash flow positive. On year to date, cash flow from operations is 11 point $7,000,000 compared to $10,200,000 in corresponding 6 months in 2023. On the P and L, we are focused on identifying efficiencies in an effort to improve profitability. Speaker 300:08:49We are on track to deliver the $5,000,000 cost savings mentioned in the last earnings call in the year. The majority of actions have been initiated. We are continuously looking for areas to drive more efficiency in operations. In terms of improving the quality of our reported earnings, the percent of capitalized software in the quarter was 5.2 percent of revenue and down 50 basis points from last quarter. You will also see on our cash flow statement that our investments in software development has come in $3,000,000 lower in the 1st 2 quarters this year compared to 2023. Speaker 300:09:29We are investing wisely with an ROI focus and decline was primarily driven by sunsetting centric and other low ROI projects. Lastly, looking forward, we are focused on improving our forecasting processes. We have been working to strengthen the partnership between the finance team and each business leader and we have added a few experienced people to our FP and A team. We are building a monthly cadence of reviewing results, improving on key drivers for revenue and costs to help improving the forecasting process. I want to note that this won't be a quick fix and I view it as an interactive multi quarter journey. Speaker 300:10:13While all of these proof points are promising, there is still more room for improvement in these areas. Moving on to our 2nd quarter results, starting from the top with bookings. Total bookings of 20 $3,300,000 in the 2nd quarter was approximately 11% higher than last year, mainly from viewable and increases in EHR by slightly offset by RCN. In this quarter RCN had bookings of $13,500,000 including ViewBuild with about 50% coming from our existing EHR installed base, demonstrating the progress we are making on our cross selling goal. EHR generated $9,800,000 in bookings with over 2 thirds coming from existing customers. Speaker 300:11:00We view this as a good sign that our that the customers are happy with the solutions and are willing to buy more from us. Revenue of $84,700,000 in the quarter was essentially flat compared to last year. The divestiture of AHT in January of this year and impact from sunsetting Centric by year end was offset by the positive contributions from Beagle, which we acquired in the Q4 of last year. RCM revenue of 54,100,000 dollars accounted for approximately 64% of total revenue. Weibo performed in line with expectations. Speaker 300:11:39Total gross margin of 48.8 percent increased 100 basis points year over year. RCM gross margins of 44.1% in the quarter improved approximately 84 basis points compared to the prior year, primarily due to revenue seasonality in VUGO. This margin expansion was partially muted by efforts to seamlessly transition to our global workforce. Additionally, EHR gross margins of 57.3 percent increased 3 50 basis points year over year driven by internal cost actions. Moving down the income statement, reported operating expenses represented 52 point 4% of total revenue in this quarter compared to 50.1% a year ago. Speaker 300:12:30While product development, sales and marketing and G and A are all down versus prior year, the increase in operating expense was primarily driven by an accelerated amortization of capitalized software costs associated with our financial management application product in EHR, which was shut down in Q2 as part of cost efficiency efforts. All of these items led to an adjusted EBITDA of $12,600,000 in the quarter, a 12% increase year over year and 33% increase sequentially. Likewise, adjusted EBITDA margin of 14.8% in the quarter increased 150 basis points year over year and about 3 50 basis points sequentially. Some of the outperformance in the quarter can be attributed to revenue seasonality and timing of annual license revenue recognition. Sequentially, when combined these factors accounted for about 2,000,000 dollars in revenue. Speaker 300:13:34Turning to the balance sheet. We ended the quarter with $7,700,000 of cash and a net debt of $172,300,000 Operating cash flow was a positive $13,800,000 in the quarter compared to a positive $700,000 last year and a loss of $2,000,000 in the Q1 of this year. In the quarter, we also paid an incremental $4,000,000 of principal on our debt, bringing our first half repayment to $17,000,000 We reiterate our goal of getting it down to a range of 2.5 to 3 times mainly from improving adjusted EBITDA and potential debt repayments. My final topic is guidance. We are providing our outlook for the Q3 and maintaining our full year ranges. Speaker 300:14:23For the Q3, we expect revenue between $82,000,000 $85,000,000 and adjusted EBITDA between $11,500,000 to $13,500,000 I'd like to highlight that the 3rd quarter adjusted EBITDA benefits from the additional cost savings and lower than expected annual conference costs mentioned in the last earnings call offsets from some revenue seasonality and timing of license revenue recognition mentioned earlier. For the full year, we are reiterating our ranges and expect revenue to be between $330,000,000 to $340,000,000 and adjusted EBITDA to be between $45,000,000 $50,000,000 In conclusion, I'm pleased with our 2nd quarter results and the progress we have made in the first half of this year, enhancing and improving our financial acumen. Based on the recent results, the improving quality of our financials and our pipeline, I feel increasingly confident that we have a clear line of sight to achieve our 2024 target and return to growth in the out years. With that, we'll open to questions. Operator00:15:35We will now begin the question and answer session. Thank you. Your first question comes from the line of Sarah James with Cantor Fitzgerald. Sarah, your line is now open. Speaker 400:15:55Thank you and congrats on a great quarter. It's nice to see the balance sheet improve on so many metrics. Can you talk a little bit about margin progression? So if we look at the 3Q guide and the implied 4Q, it looks like your EBITDA margin is ticking up at about 20 to 40 basis points a quarter. Is that a fair pacing of how we can think of improvement going forward? Speaker 400:16:20Or there are certain initiatives that could make it more lumpy, as the company progresses towards their long term guidance? Speaker 200:16:28Yes. Hey, Sarah, this is Chris. I'll start and let Vinay kind of fill in behind me. I think the big thing for us right now and I called this out in my comments was how we're thinking about the conversion to our offshore staff or our CDO operations and making sure that we are being very intentional to protect the service and keep our retention levels at or above where they need to be. And so this year may see a little bit of a muted margin gain based on where we expect things to go forward. Speaker 200:17:05And with that, while we're pleased with what we're seeing, we still want to make sure that we're giving ourselves a little bit of grace to be able to get through the year to make sure that, again, customers are satisfied with this big step in our change in the way that we're delivering the service before we really kind of push the gas pedal on that. So I would say, I would give us probably the next month or the next quarter or so to really kind of get a good sense of, as we see that continue to accelerate, what that's going to be. But again, along with that and Vinay can jump in here as well, there are the continued savings initiatives that we continue to see really paying off and making sure that we are intentional about every dollar that we spend and making sure that it's going to the betterment of our customers or the betterment of our employees. Operator00:17:56Yes. Speaker 300:17:56And I would add echo that, Sarah, and that's a great question. Especially as I mentioned, there was some seasonality and timing between Q2 and Q3. But by Q4, we expect margin to improve a little bit more with incremental revenues, which takes the benefit of last 2, 3 quarters that has been great for us. But longer term, as Chris mentioned, once I have a few more quarters, understand the full drivers and have the process a little more, I do expect our margins to continue improving because that's our goal. And it's a very simple way for me, a very laser focused tighter control on cost and giving all the support needed to generate the white space as well as our home turf of in rural healthcare to get increased bookings. Speaker 300:18:45So that benefit should start falling in. So my goal will be to once like Chris said have this quarter 1 more quarter behind us and start seeing the regular improvement in margins. And I'll end Speaker 200:19:00with this with that, Sarah. We have said in quarters past, our expectation or desire to be back at a 20% plus margin from an EBITDA perspective. And I still think that that is well within striking distance and hopefully a waypoint, not a destination. Speaker 400:19:19That's great. And one more if I could. So we're starting to see a little bit of relief on hospital margins and some of your peers have started talking about how that flows into sales pipeline. Could you give us an update on the financial health of your customer base and how that translates into demand for product expansion next Speaker 200:19:40year? Yes. I would say, our customer base is still a bit of a mixed bag, but has really felt the benefit, still kind of carried over from some of the COVID relief over the last several years and have given them the opportunity to really to store some cash on hand. I think for us, because the vast majority of our customers, especially on the EHR side, really have the full suite of products that we have delivered, whether that be through EnTrust as they're going forward or through the past with meaningful use. And so what they're focused on right now is continued efficiency in operations. Speaker 200:20:25And I think that's where we're continuing to see the demand on the services side as much as we are from a product perspective. Speaker 500:20:34Thank you. Speaker 200:20:36Thanks, Sarah. Operator00:20:39Your next question comes from the line of Jeff Garro with Stephens. Jeff, your line is now open. Speaker 600:20:46Yes, good afternoon. Thanks for taking the questions. Looking at the bookings results year to date, we see momentum for both segments of the business. So wanted to ask as you look out on the pipeline for the second half, whether you see the expectations for continued momentum bias towards one segment or the other in the back half Operator00:21:08of the year? Speaker 200:21:10Hey, Jeff. Thanks for the question. It's a great one and something we obviously pay a lot of attention to. And if you go back to the end of last year, 1st of this year, maybe even before that, and we talked about the RCM side of the house really being where we saw the opportunity for growth. But to your point, we're seeing a bit of a renaissance in the EHR opportunities. Speaker 200:21:35I think it might be a little early for us to say that we think that that's a trend, but we are seeing where there is opportunity, especially when we think about the entrust, the ability to couple the EHR with the RCM service and that being a differentiator that there's still some disparate or not disparate, there's still some vendors out there that we feel like are prime for replacement on the EHR side. We continue to enhance the experience for our customers there and invest. As Vinay said, we're being smarter about how we're spending those dollars to make sure that our customers are really getting the outsized return for that. And I think it's leading to some promising opportunities for us there. But going forward, I'd love to see both sides continue to compete for who's going to be the leader every quarter, because I think that's just a good thing for us. Speaker 200:22:31I do think the world of opportunity is much bigger on the RCM side. So I think for us, it's about how we think about that continuing to expand, while we're continuing to see the EHR come along nicely. Speaker 600:22:45Excellent. Great to hear. Maybe a follow-up a little bit on the momentum for EnTrust. Just curious if there's any particular driver you would call out there, whether it's recent regulatory rules being put out in the public domain or you alluded a little bit to a competitive dynamic. And then also whether there's any kind of tailwind from call it the final leg of trying to convert your own legacy EHR platforms to your more modern platform? Speaker 200:23:18Yes. I think there's a little bit of everything in there. I think if you look at our existing customer base, so our customers are already on the EHR. I think the first thing is, is they have to believe that we're going to continue to be the right partner for them on the EHR. So it's super important for them to see the value in that, which really allows us to have a good seat at the table from an RCM standpoint. Speaker 200:23:44Even though they could look at us standalone if they were leaving us to go to another vendor, I do think that when they're at one however we want to look at it, we're all TruBridge, right? And so I think for that cohort that cross sell opportunity, them seeing the value in the EHR is super important. And so our investment in delivery there is top of the house. When we're thinking about the net new market, so a replacement more than likely, I do think it is a differentiating value that we are the lone wolf out there that can provide both the EHR and the RCM service together. And I think the fact that it's all at a contingent based on so their EHR is no longer a flat fee or a license purchase. Speaker 200:24:33It's based on the utilization of their hospital. It's based on our performance from a collection standpoint. So our initiatives are aligned as well as they can possibly be and that our definitions of success match up. So I think those are really the 2 biggest things that we're seeing. We're seeing that momentum on the EHR side with the continued investment in the product. Speaker 200:24:56We're seeing the ability to sell the 2 together to really kind of drive that opportunity for inTrust going forward. Speaker 600:25:04Excellent. I appreciate those comments. And last one for me, do I want to make sure to hit the demand side a little bit more on RCM. Last quarter, you told a nice story of the combination with VUGO being cited by one of the prospects that you're dialoguing with. So I'm curious whether that combination specifically or maybe your efforts on automation more generally are not just a margin driver, but are also helping fuel the pipeline for future demand on the RCM side? Speaker 200:25:39There's no doubt that our ability to deliver the service at a lower price point is absolutely getting us into more opportunities and also giving us a better right to win. We're just short of a 20% increase on our winning percentage year over year. And I think that's directly attributable to our ability to be while not every deal that we're in is competitive, when they are competitive, it helps for us to be able to be at or better than the competition from a price standpoint, knowing that our delivery is going to be there. So, yes, I still continue to be very optimistic still on the automation and how that shows up and translates into margin expansion. I think the fact that we're delivering quality analytics and insights to our customers today gives them belief that we're going to be able to actually execute on meaningful leverage of the artificial intelligence. Speaker 600:26:49Excellent. Great to hear that data point on the win rate. Thanks again for taking the questions. Speaker 200:26:54You bet. Thanks, Joe. Operator00:26:57Your next question comes from the line of Stephanie Davis with Barclays. Stephanie, your line is now open. Speaker 500:27:04Hey, guys. Thanks for taking my question. Congrats on the quarter. So first off, I was hoping you can tell us about some broader trends. We've seen a lot of movement in the revenue cycle space across the past few months with some IPOs and takeouts. Speaker 500:27:19But I get you have a little bit of a different competitive backdrop. So could you give us a refresh if you're seeing anything different or any changes on the backdrop and how it could be impacting you forward? Speaker 200:27:33Thanks for joining. Thanks for the nice comments. I would say and again said this in the remarks, what we're seeing is the market continuing to come closer to us, meaning that we're not having to knock the door down for lack of a better term, when it relates to explaining why our hospitals need to be evaluating the outsource model. We do have a different market. We are our customers are the if they're not the number one, they're in the top 3 employers in the community that they serve. Speaker 200:28:09And so there are some dynamics from an employee headcount standpoint and economic development in the community, which has traditionally been a barrier for us. I would say that that if there was one thing that I've watched in either the on-site meetings that I've gone to or as I watch our sales team and see the feedback that they're getting on the opportunities, is that those barriers and the willingness for our customers to have meaningful conversations about moving to an outsource model just continue to grow. So I do think that as the months and quarters go on, we're just going to continue to see that expand. And so for us, it's about how do we make sure that we're built in a manner to capture that demand as it comes along. But I think that's the big trend is, our hospitals very similar to the larger market is seeing this as a business decision that they've got to do so that they can be viable financially viable, keep the doors open and keep the care in their communities. Speaker 500:29:14So I guess a bit related one then for Vinay, because you are calling out kind of an improving demand and improving backdrop. But I think about this print and guidance versus the first few out of the gate, how much of this positivity is a function of improving demand, improving macro versus improvement in execution and getting a better handle on numbers going forward? Speaker 300:29:40Stephanie, thanks for giving me the question. I just want to make sure I understand. Speaker 400:29:44Feel free to take all the questions. Speaker 300:29:46No, no. Just to make sure I answered it right. So your question is more about how does the strong momentum in bookings translate into guidance? Well, Speaker 400:29:57how has the strong momentum, how Speaker 500:29:59much of that is a function of improving backdrop versus some of the actions you guys have taken? Speaker 300:30:07So I would say it's a function of both, but because one is controllable, one is non controllable. The controllable part that we have done is the focus on making sure the need for from a customer delight, customer focus is there and it is not about see growth for financial terms is not about just winning new bookings. It is stemming attrition. So it's that focus and making sure that touching the customer and especially when we are going through the global workforce thing is ensuring customer delight remains the focus. So that to some extent is factored is also is reflected in the revenues that we see. Speaker 300:30:59And the non controllable of the market demand certainly is a tailwind that I expect to see in the near future and continued because as you know, we win a booking in a certain quarter and depending upon the complexities of the deal in the future quarters, I reap those benefits. So that's why I'm more hopeful and that whatever is in our controllable continue to make wise investments whether it's in the sales and marketing and investments that can help us increase our customer delight and yield that benefits whenever when the revenue show up in the coming quarters. Speaker 200:31:35Yes. And I'll give you a great example just from this week. So earlier this week, I was in Arizona and California at some sales opportunities. And the California site, the catalyst was less than stellar operations, but also some regulatory changes in California around wage increases in minimum wage and what the impact is going to be for them. But before we were there, before we had given them any customer reference, they had already unsolicited made 3 or 4 calls to our customers to see how we were doing. Speaker 200:32:12And so to your point, our execution is always going to play a huge part in our ability to convert because as great as we can sell and have the best story and marketing material on sales staff, if we're not executing, if we don't have a referenceable customer base, then they're going to go somewhere else. So I think it's a little bit of both. I think there are the factors in the macro that are driving people to the market. But I definitely think our performance is going to be the thing that determines whether they pick us or not. Speaker 500:32:45Looking forward to seeing the execution. Thanks guys. Speaker 200:32:48You bet. Thanks Stephanie. Operator00:32:52Your next question comes from the line of George Hill with Deutsche Bank. George, your line is now open. Speaker 700:32:58Hey, good evening, guys. Thanks for taking the question. I guess, Chris, on the EMR side of the business, I'd ask you quickly, like how is the legacy base holding up because you talked about the sales pipeline and the see growth there is interesting. But like I guess what I'm kind of interested in, Vinay kind of made the comment on like holding on to the legacy base versus kind of what's new and available. I guess I would just like to hear you talk about the competitive environment and the base. Speaker 700:33:23And then a quick follow-up would just be, as it relates to the provider side of the business, we're seeing a lot of the rev cycle side of the business, we're seeing a lot of growth in utilization in a lot of provider categories. Are you guys seeing the utilization strength flow through to both kind of volume and pricing growth on the RCM side of the business? Thanks. Speaker 200:33:43Okay, great. I'll try to I may have to ask you to help me come back to some of that, but let me start with the first one around the EHR business. I would say our retention outside of the Centric customer base, we're very pleased with how our retention and our stickiness in our customer base is holding up. We continue to make investments into the product to keep those customers happy and on the EHR and also so we are from a competitive standpoint, I think I've said this in calls past, it seems like there is still a bit of a hangover as it relates to EHR spend, especially in our end of the market. If it's not on fire, they're probably looking to invest that money elsewhere, whether it be the facility, whether it be in additional services or something there in the community. Speaker 200:34:42But we are there are drivers. HTI-one was something that we thought would be a catalyst for us in this year. It obviously got delayed into 2025. As there are regulatory impacts like that, we tend to see a pickup in our opportunities for EHR wins. So a couple of our retention rates that we've had this year with how we see kind of a favorable market going into next year, We continue to be optimistic about that part of the business. Speaker 200:35:11On the second side as it relates to see if I make sure I get this right, the provider volumes and utilization going up. What I would say is that we're seeing our hospitals that are thriving are really starting to expand the services that they're providing through their positions and seeing that utilization go up. I don't think it's any surprise to anybody that care is moving sort of outside of the four walls of the hospital. And so I think the smart hospitals are really making sure that they've got a strong physician network that's able to capture that, which again goes back to one of the rationales for us making the acquisition of Bugle last year was that we see the wins changing to where I think there's going to be a big market and opportunity for us in the RCM space there. And we're seeing that kind of to play out through our customers today. Operator00:36:14There are no further questions at this time. I will now turn the conference back to Chris for closing remarks. Chris? Speaker 200:36:20Thank you, Mark. And thanks again to everybody for joining today and thanks for your continued interest in TruBridge. I'd also like to thank all of our employees who work hard every day to make our clients successful and deliver quality healthcare to our communities. It's our privilege to work with some really wonderful clients and the amazing things that they do in the challenging environments that they're in. Everybody have a great evening. Speaker 200:36:42Talk to everyone soon. Bye bye. Operator00:36:46Gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallTruBridge Q2 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Ooma Earnings HeadlinesTruBridge's (TBRG) Equal Weight Rating Reiterated at StephensApril 13, 2025 | americanbankingnews.comTruBridge Announces Participation in the KeyBanc Capital Markets Healthcare ForumMarch 14, 2025 | businesswire.com$2 Trillion Disappears Because of Fed's Secretive New Move$2 trillion has disappeared from the US government's books. The reason why is a new, secretive move being carried out by the Fed that has nothing to do with lowering or raising interest rates... but could soon have an enormous impact on your wealth.April 18, 2025 | Stansberry Research (Ad)TruBridge price target raised to $28 from $23 at StephensMarch 12, 2025 | markets.businessinsider.comTruBridge price target raised to $29 from $20 at Cantor FitzgeraldMarch 11, 2025 | markets.businessinsider.comTruBridge price target raised to $29 from $24 at RBC CapitalMarch 11, 2025 | markets.businessinsider.comSee More TruBridge Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Ooma? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Ooma and other key companies, straight to your email. Email Address About OomaOoma (NYSE:OOMA) provides communications services and related technologies for businesses and consumers in the United States and Canada. The company's products and services include Ooma Office, a cloud-based multi-user communications system for small and medium-sized businesses; Ooma Connect, which delivers fixed wireless internet connectivity; and Ooma Enterprise, a unified-communications-as-a-service (UCaaS) solution. It also provides Ooma AirDial, a plain old telephone service; PureVoice HD, a residential phone services; Ooma basic that provides unlimited personal calling within the United States; and Ooma Premier, a suite of advanced calling features on a monthly or annual subscription basis. In addition, the company offers Ooma Telo, a home communications solution designed to serve as the primary phone line in the home; Ooma Telo Air, a wireless Ooma Telo with built-in Wi-Fi and Bluetooth; and Ooma Telo LTE, which combines the Ooma Telo base station with the Ooma LTE Adapter and battery back-up. Further, it provides Ooma Mobile HD app that allows users to make and receive phone calls and access Ooma features and settings; 2600Hz provides business communication applications; Talkatone mobile app; and OnSIP, an UCaaS solutions. The company offers its products through direct sales, distributors, retailers, and resellers, as well as online and sale representatives. Ooma, Inc. was incorporated in 2003 and is headquartered in Sunnyvale, California.View Ooma ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Archer Aviation Unveils NYC Network Ahead of Key Earnings Report3 Reasons to Like the Look of Amazon Ahead of EarningsTesla Stock Eyes Breakout With Earnings on DeckJohnson & Johnson Earnings Were More Good Than Bad—Time to Buy? Why Analysts Boosted United Airlines Stock Ahead of EarningsLamb Weston Stock Rises, Earnings Provide Calm Amidst ChaosIntuitive Machines Gains After Earnings Beat, NASA Missions Ahead Upcoming Earnings Tesla (4/22/2025)Intuitive Surgical (4/22/2025)Verizon Communications (4/22/2025)Canadian National Railway (4/22/2025)Novartis (4/22/2025)RTX (4/22/2025)3M (4/22/2025)Capital One Financial (4/22/2025)General Electric (4/22/2025)Danaher (4/22/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 8 speakers on the call. Operator00:00:05Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to TruBridge Tutor Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question and answer session. Thank you. Operator00:00:26I would now like to turn the call over to Drew Anderson. Drew, please go ahead. Speaker 100:00:32Thank you. Good afternoon, and welcome to the TruBridge 2nd quarter 2024 earnings conference call. Leading today's call are Chris Fowler, President and Chief Executive Officer and Vinay Bassey, Chief Financial Officer. This call may include statements regarding future operating plans, expectations and performance that constitute forward looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The company cautions you that any such forward looking statements only reflect management expectations and predictions based upon currently available information and are not guarantees of future results or performance. Speaker 100:01:14Actual results might differ materially from those expressed or implied by such forward looking statements as a result of known and unknown risks, uncertainties and other factors, including those described in public releases and reports filed with the Securities and Exchange Commission, including, but not limited to, the most recent annual report on Form 10 ks. The company also cautions investors that the forward looking information provided in this call represents their outlook only as of this date, and they undertake no obligation to update or revise any forward looking statements to reflect events or developments after the date of this call. At this time, I will turn the call over to Mr. Chris Fowler, President and Chief Executive Officer. Please go ahead, sir. Speaker 200:02:00Thank you, Drew, and thank you to everyone for joining us today. I'm pleased to report that our continued bookings momentum, strong revenue performance, EBITDA margin expansion, dramatic improvement in cash flow from operations. Our total bookings for the quarter came in at $23,300,000 marking the 3rd straight quarter over $20,000,000 At the 1st of the year, we said that we were cautiously optimistic about our sales momentum and that continues to be the case. We have also talked about the 2 step process for selling our RCM services. The first being educating the client about the virtues of outsourcing and secondly selling TruBridge as the vendor. Speaker 200:02:43While still a bit anecdotal, we are seeing promising signs that the market is becoming more educated on outsourcing, thus allowing us to focus more on simply selling TruBridge as their future partner. Looking deeper at our bookings, our integrated nTrust solution is resonating in the market. In the first half of the year, we saw a 60% increase in the number of new nTrust clients compared to the first half of twenty twenty three. Our fully integrated solution is better for our clients as the shared risk SaaS model eliminates the need to budget for new products, price increases or ongoing maintenance payments and is a benefit to TruBridge as those clients represent a higher lifetime value for us and tend to be stickier over time. Our cross selling efforts are bearing fruit with $7,000,000 signed in the quarter. Speaker 200:03:35Several enterprise clients expanded their relationship with TruBridge to include coding and additional billing and collecting opportunities and current CBO clients added service lines like ambulatory billing even in instances where they're not running our EHR. Importantly, at an increasing rate, our clients are turning to TruBridge as their sole revenue cycle partner even when they're not yet ready to fully outsource. Last quarter, we spent time discussing the timing of our bookings to revenue conversion. While those larger deals can still take time to implement, we have seen the rate of conversion slightly decrease this quarter. We are laser focused on accelerating the implementation of new contracts, while being mindful of our customers' limitations and their time constraints. Speaker 200:04:22Much of the work Vinay and his team have done to increase visibility into how and when bookings convert to revenue has been a key piece in managing this figure. At this point in the year, we have over 90% of our projected 2024 revenue under contract and based on our pipeline, we're optimistic the momentum in bookings will continue into the back half of the year. During the quarter, we also made progress on our offshoring initiative and saw early successes from our acquisition of YUGAL. We saw sequential improvement in EBITDA during the quarter and feel confident that Bugle will achieve the $4,500,000 adjusted EBITDA target for the year. At the end of Q2, 43% of our CBO and EBO operation is offshore compared to 25% at the end of Q1. Speaker 200:05:12During the conversion, we are maintaining overlapping staff to ensure a smooth transformation of service. In addition, we tend to staff new opportunities ahead of the anticipated contracts and expect these savings to ramp over the next few quarters. For these reasons, we remain confident in our long term margin expansion, but believe that will be muted in the near term. As we stated last year, we did see some hiccups with our offshore partner, which spurred us on to the acquisition of our own captive offshore operation with Bugle. But some of last year's challenges with that offshore partner has translated into slightly lower retention this year. Speaker 200:05:51To counter this, we're doubling down on our client retention efforts and being more proactive by leveraging Beagle's extensive experience and best in class approach to customer management, specifically getting the domestic client management teams and offshore production teams aligned quickly and as smoothly as possible. We look to end the year on stable footing and continue to be optimistic about the delivery of the offshore staff. Vinay will provide an update on the progress he continues to make on our financial initiatives, but I would be remiss not to mention how pleased I am with the improvements he and his team have made thus far. Overall, this was a solid first half to our year and I believe we're delivering sustainable results. While our transformation is still underway, we are pleased with the progress we have made in both of our business units. Speaker 200:06:41The rural and community market is still our focus and we will continue to advance our products and services to keep care local. With that, I'll turn the call over to Vinay. Speaker 300:06:51Thank you, Chris, and thank you all for joining us today to discuss our 2nd quarter results. In addition to the strong operational performance that Chris just highlighted, we also made improvements to our financial operations. As Chris mentioned, we are working diligently to enhance our financial quality, controls and forecasting. In the Q2, we saw some early indicators that our efforts are paying off. One of my first priorities was to improve our cash collection and management. Speaker 300:07:30To that end, as I mentioned last quarter, we added additional headcount and implemented a process of daily AR and weekly payables review. Although these are early results, the metrics are moving in the right direction. Accounts receivable is down 7.2% sequentially. Days sales outstanding are down approximately 6 days from Q1. At the same time, accounts payable increased just over $4,000,000 as we are becoming more regimented aligning with the terms of the contract. Speaker 300:08:07The next priority was getting the business to free cash flow from operations positive. In the second quarter, we delivered positive 13 point $8,000,000 of cash flow from operations, primarily from improved working capital management and improved profitability. Looking forward, it is our goal to remain free cash flow positive. On year to date, cash flow from operations is 11 point $7,000,000 compared to $10,200,000 in corresponding 6 months in 2023. On the P and L, we are focused on identifying efficiencies in an effort to improve profitability. Speaker 300:08:49We are on track to deliver the $5,000,000 cost savings mentioned in the last earnings call in the year. The majority of actions have been initiated. We are continuously looking for areas to drive more efficiency in operations. In terms of improving the quality of our reported earnings, the percent of capitalized software in the quarter was 5.2 percent of revenue and down 50 basis points from last quarter. You will also see on our cash flow statement that our investments in software development has come in $3,000,000 lower in the 1st 2 quarters this year compared to 2023. Speaker 300:09:29We are investing wisely with an ROI focus and decline was primarily driven by sunsetting centric and other low ROI projects. Lastly, looking forward, we are focused on improving our forecasting processes. We have been working to strengthen the partnership between the finance team and each business leader and we have added a few experienced people to our FP and A team. We are building a monthly cadence of reviewing results, improving on key drivers for revenue and costs to help improving the forecasting process. I want to note that this won't be a quick fix and I view it as an interactive multi quarter journey. Speaker 300:10:13While all of these proof points are promising, there is still more room for improvement in these areas. Moving on to our 2nd quarter results, starting from the top with bookings. Total bookings of 20 $3,300,000 in the 2nd quarter was approximately 11% higher than last year, mainly from viewable and increases in EHR by slightly offset by RCN. In this quarter RCN had bookings of $13,500,000 including ViewBuild with about 50% coming from our existing EHR installed base, demonstrating the progress we are making on our cross selling goal. EHR generated $9,800,000 in bookings with over 2 thirds coming from existing customers. Speaker 300:11:00We view this as a good sign that our that the customers are happy with the solutions and are willing to buy more from us. Revenue of $84,700,000 in the quarter was essentially flat compared to last year. The divestiture of AHT in January of this year and impact from sunsetting Centric by year end was offset by the positive contributions from Beagle, which we acquired in the Q4 of last year. RCM revenue of 54,100,000 dollars accounted for approximately 64% of total revenue. Weibo performed in line with expectations. Speaker 300:11:39Total gross margin of 48.8 percent increased 100 basis points year over year. RCM gross margins of 44.1% in the quarter improved approximately 84 basis points compared to the prior year, primarily due to revenue seasonality in VUGO. This margin expansion was partially muted by efforts to seamlessly transition to our global workforce. Additionally, EHR gross margins of 57.3 percent increased 3 50 basis points year over year driven by internal cost actions. Moving down the income statement, reported operating expenses represented 52 point 4% of total revenue in this quarter compared to 50.1% a year ago. Speaker 300:12:30While product development, sales and marketing and G and A are all down versus prior year, the increase in operating expense was primarily driven by an accelerated amortization of capitalized software costs associated with our financial management application product in EHR, which was shut down in Q2 as part of cost efficiency efforts. All of these items led to an adjusted EBITDA of $12,600,000 in the quarter, a 12% increase year over year and 33% increase sequentially. Likewise, adjusted EBITDA margin of 14.8% in the quarter increased 150 basis points year over year and about 3 50 basis points sequentially. Some of the outperformance in the quarter can be attributed to revenue seasonality and timing of annual license revenue recognition. Sequentially, when combined these factors accounted for about 2,000,000 dollars in revenue. Speaker 300:13:34Turning to the balance sheet. We ended the quarter with $7,700,000 of cash and a net debt of $172,300,000 Operating cash flow was a positive $13,800,000 in the quarter compared to a positive $700,000 last year and a loss of $2,000,000 in the Q1 of this year. In the quarter, we also paid an incremental $4,000,000 of principal on our debt, bringing our first half repayment to $17,000,000 We reiterate our goal of getting it down to a range of 2.5 to 3 times mainly from improving adjusted EBITDA and potential debt repayments. My final topic is guidance. We are providing our outlook for the Q3 and maintaining our full year ranges. Speaker 300:14:23For the Q3, we expect revenue between $82,000,000 $85,000,000 and adjusted EBITDA between $11,500,000 to $13,500,000 I'd like to highlight that the 3rd quarter adjusted EBITDA benefits from the additional cost savings and lower than expected annual conference costs mentioned in the last earnings call offsets from some revenue seasonality and timing of license revenue recognition mentioned earlier. For the full year, we are reiterating our ranges and expect revenue to be between $330,000,000 to $340,000,000 and adjusted EBITDA to be between $45,000,000 $50,000,000 In conclusion, I'm pleased with our 2nd quarter results and the progress we have made in the first half of this year, enhancing and improving our financial acumen. Based on the recent results, the improving quality of our financials and our pipeline, I feel increasingly confident that we have a clear line of sight to achieve our 2024 target and return to growth in the out years. With that, we'll open to questions. Operator00:15:35We will now begin the question and answer session. Thank you. Your first question comes from the line of Sarah James with Cantor Fitzgerald. Sarah, your line is now open. Speaker 400:15:55Thank you and congrats on a great quarter. It's nice to see the balance sheet improve on so many metrics. Can you talk a little bit about margin progression? So if we look at the 3Q guide and the implied 4Q, it looks like your EBITDA margin is ticking up at about 20 to 40 basis points a quarter. Is that a fair pacing of how we can think of improvement going forward? Speaker 400:16:20Or there are certain initiatives that could make it more lumpy, as the company progresses towards their long term guidance? Speaker 200:16:28Yes. Hey, Sarah, this is Chris. I'll start and let Vinay kind of fill in behind me. I think the big thing for us right now and I called this out in my comments was how we're thinking about the conversion to our offshore staff or our CDO operations and making sure that we are being very intentional to protect the service and keep our retention levels at or above where they need to be. And so this year may see a little bit of a muted margin gain based on where we expect things to go forward. Speaker 200:17:05And with that, while we're pleased with what we're seeing, we still want to make sure that we're giving ourselves a little bit of grace to be able to get through the year to make sure that, again, customers are satisfied with this big step in our change in the way that we're delivering the service before we really kind of push the gas pedal on that. So I would say, I would give us probably the next month or the next quarter or so to really kind of get a good sense of, as we see that continue to accelerate, what that's going to be. But again, along with that and Vinay can jump in here as well, there are the continued savings initiatives that we continue to see really paying off and making sure that we are intentional about every dollar that we spend and making sure that it's going to the betterment of our customers or the betterment of our employees. Operator00:17:56Yes. Speaker 300:17:56And I would add echo that, Sarah, and that's a great question. Especially as I mentioned, there was some seasonality and timing between Q2 and Q3. But by Q4, we expect margin to improve a little bit more with incremental revenues, which takes the benefit of last 2, 3 quarters that has been great for us. But longer term, as Chris mentioned, once I have a few more quarters, understand the full drivers and have the process a little more, I do expect our margins to continue improving because that's our goal. And it's a very simple way for me, a very laser focused tighter control on cost and giving all the support needed to generate the white space as well as our home turf of in rural healthcare to get increased bookings. Speaker 300:18:45So that benefit should start falling in. So my goal will be to once like Chris said have this quarter 1 more quarter behind us and start seeing the regular improvement in margins. And I'll end Speaker 200:19:00with this with that, Sarah. We have said in quarters past, our expectation or desire to be back at a 20% plus margin from an EBITDA perspective. And I still think that that is well within striking distance and hopefully a waypoint, not a destination. Speaker 400:19:19That's great. And one more if I could. So we're starting to see a little bit of relief on hospital margins and some of your peers have started talking about how that flows into sales pipeline. Could you give us an update on the financial health of your customer base and how that translates into demand for product expansion next Speaker 200:19:40year? Yes. I would say, our customer base is still a bit of a mixed bag, but has really felt the benefit, still kind of carried over from some of the COVID relief over the last several years and have given them the opportunity to really to store some cash on hand. I think for us, because the vast majority of our customers, especially on the EHR side, really have the full suite of products that we have delivered, whether that be through EnTrust as they're going forward or through the past with meaningful use. And so what they're focused on right now is continued efficiency in operations. Speaker 200:20:25And I think that's where we're continuing to see the demand on the services side as much as we are from a product perspective. Speaker 500:20:34Thank you. Speaker 200:20:36Thanks, Sarah. Operator00:20:39Your next question comes from the line of Jeff Garro with Stephens. Jeff, your line is now open. Speaker 600:20:46Yes, good afternoon. Thanks for taking the questions. Looking at the bookings results year to date, we see momentum for both segments of the business. So wanted to ask as you look out on the pipeline for the second half, whether you see the expectations for continued momentum bias towards one segment or the other in the back half Operator00:21:08of the year? Speaker 200:21:10Hey, Jeff. Thanks for the question. It's a great one and something we obviously pay a lot of attention to. And if you go back to the end of last year, 1st of this year, maybe even before that, and we talked about the RCM side of the house really being where we saw the opportunity for growth. But to your point, we're seeing a bit of a renaissance in the EHR opportunities. Speaker 200:21:35I think it might be a little early for us to say that we think that that's a trend, but we are seeing where there is opportunity, especially when we think about the entrust, the ability to couple the EHR with the RCM service and that being a differentiator that there's still some disparate or not disparate, there's still some vendors out there that we feel like are prime for replacement on the EHR side. We continue to enhance the experience for our customers there and invest. As Vinay said, we're being smarter about how we're spending those dollars to make sure that our customers are really getting the outsized return for that. And I think it's leading to some promising opportunities for us there. But going forward, I'd love to see both sides continue to compete for who's going to be the leader every quarter, because I think that's just a good thing for us. Speaker 200:22:31I do think the world of opportunity is much bigger on the RCM side. So I think for us, it's about how we think about that continuing to expand, while we're continuing to see the EHR come along nicely. Speaker 600:22:45Excellent. Great to hear. Maybe a follow-up a little bit on the momentum for EnTrust. Just curious if there's any particular driver you would call out there, whether it's recent regulatory rules being put out in the public domain or you alluded a little bit to a competitive dynamic. And then also whether there's any kind of tailwind from call it the final leg of trying to convert your own legacy EHR platforms to your more modern platform? Speaker 200:23:18Yes. I think there's a little bit of everything in there. I think if you look at our existing customer base, so our customers are already on the EHR. I think the first thing is, is they have to believe that we're going to continue to be the right partner for them on the EHR. So it's super important for them to see the value in that, which really allows us to have a good seat at the table from an RCM standpoint. Speaker 200:23:44Even though they could look at us standalone if they were leaving us to go to another vendor, I do think that when they're at one however we want to look at it, we're all TruBridge, right? And so I think for that cohort that cross sell opportunity, them seeing the value in the EHR is super important. And so our investment in delivery there is top of the house. When we're thinking about the net new market, so a replacement more than likely, I do think it is a differentiating value that we are the lone wolf out there that can provide both the EHR and the RCM service together. And I think the fact that it's all at a contingent based on so their EHR is no longer a flat fee or a license purchase. Speaker 200:24:33It's based on the utilization of their hospital. It's based on our performance from a collection standpoint. So our initiatives are aligned as well as they can possibly be and that our definitions of success match up. So I think those are really the 2 biggest things that we're seeing. We're seeing that momentum on the EHR side with the continued investment in the product. Speaker 200:24:56We're seeing the ability to sell the 2 together to really kind of drive that opportunity for inTrust going forward. Speaker 600:25:04Excellent. I appreciate those comments. And last one for me, do I want to make sure to hit the demand side a little bit more on RCM. Last quarter, you told a nice story of the combination with VUGO being cited by one of the prospects that you're dialoguing with. So I'm curious whether that combination specifically or maybe your efforts on automation more generally are not just a margin driver, but are also helping fuel the pipeline for future demand on the RCM side? Speaker 200:25:39There's no doubt that our ability to deliver the service at a lower price point is absolutely getting us into more opportunities and also giving us a better right to win. We're just short of a 20% increase on our winning percentage year over year. And I think that's directly attributable to our ability to be while not every deal that we're in is competitive, when they are competitive, it helps for us to be able to be at or better than the competition from a price standpoint, knowing that our delivery is going to be there. So, yes, I still continue to be very optimistic still on the automation and how that shows up and translates into margin expansion. I think the fact that we're delivering quality analytics and insights to our customers today gives them belief that we're going to be able to actually execute on meaningful leverage of the artificial intelligence. Speaker 600:26:49Excellent. Great to hear that data point on the win rate. Thanks again for taking the questions. Speaker 200:26:54You bet. Thanks, Joe. Operator00:26:57Your next question comes from the line of Stephanie Davis with Barclays. Stephanie, your line is now open. Speaker 500:27:04Hey, guys. Thanks for taking my question. Congrats on the quarter. So first off, I was hoping you can tell us about some broader trends. We've seen a lot of movement in the revenue cycle space across the past few months with some IPOs and takeouts. Speaker 500:27:19But I get you have a little bit of a different competitive backdrop. So could you give us a refresh if you're seeing anything different or any changes on the backdrop and how it could be impacting you forward? Speaker 200:27:33Thanks for joining. Thanks for the nice comments. I would say and again said this in the remarks, what we're seeing is the market continuing to come closer to us, meaning that we're not having to knock the door down for lack of a better term, when it relates to explaining why our hospitals need to be evaluating the outsource model. We do have a different market. We are our customers are the if they're not the number one, they're in the top 3 employers in the community that they serve. Speaker 200:28:09And so there are some dynamics from an employee headcount standpoint and economic development in the community, which has traditionally been a barrier for us. I would say that that if there was one thing that I've watched in either the on-site meetings that I've gone to or as I watch our sales team and see the feedback that they're getting on the opportunities, is that those barriers and the willingness for our customers to have meaningful conversations about moving to an outsource model just continue to grow. So I do think that as the months and quarters go on, we're just going to continue to see that expand. And so for us, it's about how do we make sure that we're built in a manner to capture that demand as it comes along. But I think that's the big trend is, our hospitals very similar to the larger market is seeing this as a business decision that they've got to do so that they can be viable financially viable, keep the doors open and keep the care in their communities. Speaker 500:29:14So I guess a bit related one then for Vinay, because you are calling out kind of an improving demand and improving backdrop. But I think about this print and guidance versus the first few out of the gate, how much of this positivity is a function of improving demand, improving macro versus improvement in execution and getting a better handle on numbers going forward? Speaker 300:29:40Stephanie, thanks for giving me the question. I just want to make sure I understand. Speaker 400:29:44Feel free to take all the questions. Speaker 300:29:46No, no. Just to make sure I answered it right. So your question is more about how does the strong momentum in bookings translate into guidance? Well, Speaker 400:29:57how has the strong momentum, how Speaker 500:29:59much of that is a function of improving backdrop versus some of the actions you guys have taken? Speaker 300:30:07So I would say it's a function of both, but because one is controllable, one is non controllable. The controllable part that we have done is the focus on making sure the need for from a customer delight, customer focus is there and it is not about see growth for financial terms is not about just winning new bookings. It is stemming attrition. So it's that focus and making sure that touching the customer and especially when we are going through the global workforce thing is ensuring customer delight remains the focus. So that to some extent is factored is also is reflected in the revenues that we see. Speaker 300:30:59And the non controllable of the market demand certainly is a tailwind that I expect to see in the near future and continued because as you know, we win a booking in a certain quarter and depending upon the complexities of the deal in the future quarters, I reap those benefits. So that's why I'm more hopeful and that whatever is in our controllable continue to make wise investments whether it's in the sales and marketing and investments that can help us increase our customer delight and yield that benefits whenever when the revenue show up in the coming quarters. Speaker 200:31:35Yes. And I'll give you a great example just from this week. So earlier this week, I was in Arizona and California at some sales opportunities. And the California site, the catalyst was less than stellar operations, but also some regulatory changes in California around wage increases in minimum wage and what the impact is going to be for them. But before we were there, before we had given them any customer reference, they had already unsolicited made 3 or 4 calls to our customers to see how we were doing. Speaker 200:32:12And so to your point, our execution is always going to play a huge part in our ability to convert because as great as we can sell and have the best story and marketing material on sales staff, if we're not executing, if we don't have a referenceable customer base, then they're going to go somewhere else. So I think it's a little bit of both. I think there are the factors in the macro that are driving people to the market. But I definitely think our performance is going to be the thing that determines whether they pick us or not. Speaker 500:32:45Looking forward to seeing the execution. Thanks guys. Speaker 200:32:48You bet. Thanks Stephanie. Operator00:32:52Your next question comes from the line of George Hill with Deutsche Bank. George, your line is now open. Speaker 700:32:58Hey, good evening, guys. Thanks for taking the question. I guess, Chris, on the EMR side of the business, I'd ask you quickly, like how is the legacy base holding up because you talked about the sales pipeline and the see growth there is interesting. But like I guess what I'm kind of interested in, Vinay kind of made the comment on like holding on to the legacy base versus kind of what's new and available. I guess I would just like to hear you talk about the competitive environment and the base. Speaker 700:33:23And then a quick follow-up would just be, as it relates to the provider side of the business, we're seeing a lot of the rev cycle side of the business, we're seeing a lot of growth in utilization in a lot of provider categories. Are you guys seeing the utilization strength flow through to both kind of volume and pricing growth on the RCM side of the business? Thanks. Speaker 200:33:43Okay, great. I'll try to I may have to ask you to help me come back to some of that, but let me start with the first one around the EHR business. I would say our retention outside of the Centric customer base, we're very pleased with how our retention and our stickiness in our customer base is holding up. We continue to make investments into the product to keep those customers happy and on the EHR and also so we are from a competitive standpoint, I think I've said this in calls past, it seems like there is still a bit of a hangover as it relates to EHR spend, especially in our end of the market. If it's not on fire, they're probably looking to invest that money elsewhere, whether it be the facility, whether it be in additional services or something there in the community. Speaker 200:34:42But we are there are drivers. HTI-one was something that we thought would be a catalyst for us in this year. It obviously got delayed into 2025. As there are regulatory impacts like that, we tend to see a pickup in our opportunities for EHR wins. So a couple of our retention rates that we've had this year with how we see kind of a favorable market going into next year, We continue to be optimistic about that part of the business. Speaker 200:35:11On the second side as it relates to see if I make sure I get this right, the provider volumes and utilization going up. What I would say is that we're seeing our hospitals that are thriving are really starting to expand the services that they're providing through their positions and seeing that utilization go up. I don't think it's any surprise to anybody that care is moving sort of outside of the four walls of the hospital. And so I think the smart hospitals are really making sure that they've got a strong physician network that's able to capture that, which again goes back to one of the rationales for us making the acquisition of Bugle last year was that we see the wins changing to where I think there's going to be a big market and opportunity for us in the RCM space there. And we're seeing that kind of to play out through our customers today. Operator00:36:14There are no further questions at this time. I will now turn the conference back to Chris for closing remarks. Chris? Speaker 200:36:20Thank you, Mark. And thanks again to everybody for joining today and thanks for your continued interest in TruBridge. I'd also like to thank all of our employees who work hard every day to make our clients successful and deliver quality healthcare to our communities. It's our privilege to work with some really wonderful clients and the amazing things that they do in the challenging environments that they're in. Everybody have a great evening. Speaker 200:36:42Talk to everyone soon. Bye bye. Operator00:36:46Gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.Read morePowered by