Financial Performance - Total revenues for the first nine months of 2025 reached $259.0 million, a 2% increase from $254.4 million in the same period of 2024[159]. - Net income for the first nine months of 2025 was $8.6 million, a significant improvement from a net loss of $15.4 million in the first nine months of 2024, driven by revenue growth and cost reductions[159]. - Financial Health segment revenues for the nine months ended September 30, 2025, were $162.1 million, up 1% from $158.4 million in the prior year, with recurring revenues making up 98% of total Financial Health revenues[175]. - Patient Care revenues increased by $1.6 million, or 5%, in the third quarter of 2025 compared to the same quarter in 2024, primarily due to new SaaS contracts and EHR installations[163]. - Net income for the third quarter of 2025 was $5.6 million, a $14.8 million increase from a net loss of $9.1 million in the third quarter of 2024[173]. - Net income for the first nine months of 2025 increased by $24.0 million to $8.6 million, or $0.58 per share, compared to a net loss of $15.4 million, or $(1.04) per share, for the first nine months of 2024[186]. Cost Management - Total costs of revenues (exclusive of amortization and depreciation) decreased to 48.8% of total revenues in the third quarter of 2025, down from 50.0% in the same quarter of 2024[164]. - Total costs of revenues decreased by $4.6 million, resulting in costs representing 47% of total revenues in the first nine months of 2025, down from 50% in the same period of 2024[177]. - Total other expenses decreased by $1.7 million in the third quarter of 2025, primarily due to reduced interest expenses[170]. - Product development costs decreased by $2.1 million, or 8%, compared to the first nine months of 2024, primarily due to labor savings[179]. - Sales and marketing costs decreased by $1.2 million, or 6%, compared to the first nine months of 2024, mainly due to lower commissions[180]. Revenue Growth Strategies - The company aims to achieve long-term revenue growth by cross-selling Financial Health services into the existing Patient Care customer base[139]. - The company plans to release its first denials prediction model to the public in Q1 2026[144]. - SaaS license models accounted for 100% of annual new Patient Care installations in 2022 and through the first nine months of 2025, up from 12% in 2018[151]. Operational Efficiency - Operating income for the third quarter of 2025 was $4.1 million, compared to $2.8 million in the third quarter of 2024, reflecting improved operational efficiency[160]. - Margin optimization initiatives have been implemented, including the acquisition of Viewgol, which is expected to enhance control over resource availability and achieve cost efficiencies[156]. - The company has implemented margin optimization efforts, including organizational realignment and expanded use of automation since 2021[155]. Market Trends and Challenges - The company recognizes the need to adapt to regulatory changes impacting healthcare reimbursement, particularly with the recent OBBBA legislation[148]. - The company is actively involved in shaping AI governance and controls to ensure safe implementation in healthcare delivery[144]. Bookings and Backlog - As of September 30, 2025, the company had a twelve-month backlog of approximately $4.0 million for non-recurring system purchases and approximately $321.0 million for recurring payments under support and maintenance and RCM services[205]. - Total bookings for the three months ended September 30, 2025 were $15.5 million, a decrease of 26% from $20.95 million in the same period of 2024[206]. - The company reported a total of $52.0 million in bookings for the nine months ended September 30, 2025, down from $67.81 million in the same period of 2024[213]. - Financial Health bookings decreased by $3.0 million, or 24%, in Q3 2025 compared to Q3 2024, with net-new bookings down by $4.5 million, or 79%[207]. - Patient Care bookings decreased by $2.5 million, or 29%, in Q3 2025 compared to Q3 2024, primarily due to a 95% decrease in net-new bookings[209]. - Financial Health bookings for the first nine months of 2025 decreased by $4.4 million, or 11%, compared to the same period in 2024[208]. - Patient Care bookings for the first nine months of 2025 decreased by $0.4 million, or 1%, compared to the same period in 2024[210]. - The company will transition to reporting total bookings on an Annual Contract Value (ACV) basis starting January 2025, providing year-over-year comparability[212]. Cash Flow and Debt - Net cash provided by operating activities increased by $6.3 million to $28.1 million for the nine months ended September 30, 2025, compared to $21.8 million for the same period in 2024[199]. - As of September 30, 2025, the company had $165.2 million in principal amount of indebtedness outstanding under credit facilities, with a cash balance of $19.9 million[195]. - A one hundred basis point change in interest rate on outstanding borrowings of $165.2 million would result in a change in interest expense of approximately $1.7 million annually[216]. - As of September 30, 2025, the company had no investments and does not utilize derivative financial instruments to manage interest rate risks[217].

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $86.1 million, a 2% increase year-over-year, with a normalized growth of 2.8% after accounting for the impact of the Centric product sunset [15][16] - Adjusted EBITDA margins are expected to expand approximately 600 basis points from 2023 to year-end, with a projected margin of 19% for 2025 [11][12] - Free cash flow improved by $20 million year-to-date, with net leverage reduced from 4.4x in Q4 2023 to approximately 2.2x by Q3 2025 [11][14] Business Line Data and Key Metrics Changes - Financial health revenue was $54.5 million, representing 63% of total revenue, remaining flat year-over-year [15] - Patient care revenue grew by 5.3% year-over-year to $31.6 million, with gross margin expanding to approximately 60% [16] - The Encoder business saw a significant increase in bookings, with margins reported at 70%-80% [22][23] Market Data and Key Metrics Changes - The percentage of Financial Health bookings in the 100-400 bed space increased from less than 20% in 2024 to more than 30% in 2025 [5] - Recurring revenue remained high at around 94% of total revenue, with financial health recurring revenue at approximately 95%-96% [15][36] Company Strategy and Development Direction - The company is focused on improving the quality of earnings and financial performance through operational streamlining and margin expansion [4][10] - Strategic transitions are being operationalized to enhance performance, with a focus on client retention and satisfaction [9][10] - The leadership team is being strengthened to support sales and marketing efforts, with a new Chief Business Officer appointed [6][7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that while Q3 bookings were below expectations, early signs in Q4 indicate a positive trend [6][22] - The regulatory landscape is expected to stabilize, which may lead to increased bookings in the future [25] - The company anticipates further adjusted EBITDA expansion and margin improvement in 2026, driven by cost optimization and global workforce transitions [19][20] Other Important Information - The company has made significant improvements in cash balance, increasing from $3.8 million at the end of 2023 to approximately $20 million [14] - Operating expenses were flat year-over-year at $40 million, representing 46% of revenue [16] Q&A Session Summary Question: Can you discuss the bookings performance and expectations? - Management indicated that Q3 bookings of $15.5 million were about 20% below expectations, primarily due to delayed decisions rather than negative influences [22] Question: Are there common reasons for hospitals delaying implementation? - Management noted that budget cycles and regulatory uncertainties are causing delays, but they expect decisions to accelerate as hospitals finalize their spending needs for 2026 [25] Question: What is the outlook for the pipeline and bookings growth? - Management expressed optimism about the pipeline, indicating that while Q3 was underwhelming, there is sufficient coverage for Q4 [31] Question: How will new sales leadership impact bookings? - Management stated that new leadership will focus on leveraging existing talent while also bringing in new resources to enhance sales efforts [34] Question: What is the status of recurring revenue and backlog? - Management confirmed that recurring revenue remains strong at around 94%, with the backlog being monitored closely [36]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $86.1 million, a 2% increase year-over-year, with a normalized growth of 2.8% after accounting for the impact of the Centric product sunset [16] - Adjusted EBITDA margins are expected to expand approximately 600 basis points from 2023 to year-end, with a projected margin of 19% for 2025, up from 16.5% in 2024 [12][19] - Free cash flow improved by $20 million year-to-date, with net leverage reduced from 4.4 times in Q4 2023 to approximately 2.2 times by Q3 2025 [12][15] Business Line Data and Key Metrics Changes - Financial health revenue was $54.5 million, representing 63% of total revenue, remaining flat year-over-year, while patient care revenue grew by 5.3% to $31.6 million [16][17] - Encoder business bookings have increased significantly, with margins of 70%-80%, indicating a positive trend in high-margin deals [22][24] Market Data and Key Metrics Changes - The percentage of Financial Health bookings in the 100-400 bed space increased from less than 20% in 2024 to more than 30% in 2025, reflecting a strategic focus on this market segment [5] - The company noted that the majority of hospitals operate on a calendar year budget cycle, which has influenced decision-making and timing for bookings [25] Company Strategy and Development Direction - The company is focused on improving the quality of earnings, enhancing client retention, and executing a strategic transition process to drive margin expansion [10][20] - The appointment of a new Chief Business Officer aims to elevate sales efforts and improve visibility into bookings and revenue growth [6][7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that while Q3 bookings were below expectations, early indicators in Q4 show a strong start, suggesting a potential recovery in pipeline conversion [6][30] - The company remains optimistic about future growth opportunities, particularly in the regulatory landscape and the focus on revenue cycle management (RCM) improvements [23] Other Important Information - The company has made significant progress in cost optimization, with capitalized software spending decreasing by 30% year-over-year [14] - Cash balance increased from $3.8 million at the end of 2023 to approximately $20 million, driven by improved profitability and disciplined working capital management [15] Q&A Session Summary Question: Can you discuss the bookings performance and expectations? - Management indicated that Q3 bookings of $15.5 million were about 20% below expectations, primarily due to delayed decisions rather than negative influences [22] Question: Are there common reasons for hospitals delaying implementation? - Delays are attributed to budget cycles and uncertainty regarding Medicaid funding, but management expects these decisions to accelerate as hospitals finalize their spending needs for 2026 [25] Question: What is the state of the pipeline and bookings growth expectations? - Management expressed caution, stating that while there is optimism in the pipeline, it is uncertain if Q4 will fully compensate for Q3 shortfalls [30] Question: How will new sales leadership impact bookings? - The new Chief Business Officer is expected to enhance sales efforts and improve accountability across sales, marketing, and client success functions [35] Question: What is the outlook for EBITDA margin expansion next year? - Management expects 200 basis points of margin expansion primarily from cost optimization efforts, with some implicit scenarios for revenue growth [44][46]

Core Insights - TruBridge (TBRG) reported quarterly earnings of $0.88 per share, exceeding the Zacks Consensus Estimate of $0.4 per share, and showing a significant improvement from a loss of $0.21 per share a year ago, resulting in an earnings surprise of +120.00% [1] - The company achieved revenues of $86.11 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.32% and reflecting a year-over-year increase from $83.83 million [2] - TruBridge has outperformed consensus revenue estimates three times over the last four quarters [2] Earnings Outlook - The sustainability of TruBridge's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.46 on revenues of $88.61 million, and for the current fiscal year, it is $1.76 on revenues of $346.54 million [7] Industry Context - The Medical Info Systems industry, to which TruBridge belongs, is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - TruBridge reported total revenue of $86.1 million for Q3 2025, a 1.7% increase from $84.7 million in Q3 2024[3] - Adjusted EBITDA margin for Q3 2025 was 19%, reflecting a sustainable profitability expansion[2] - For the full year 2025, TruBridge expects total revenue between $345 million and $348 million, revised from $345 million to $350 million[4] - GAAP net income for Q3 2025 was $5.6 million, compared to a net loss of $9.1 million in Q3 2024[3] - Non-GAAP net income for Q3 2025 was $12.8 million, compared to a net loss of $3.1 million in Q3 2024[3] - Financial Health revenue for Q3 2025 was $54.5 million, representing 63% of total revenue[3] - Total revenues for the three months ended September 30, 2025, were $86,106,000, an increase from $84,700,000 in the same period of 2024, representing a growth of 1.7%[32] - Adjusted EBITDA for the three months ended September 30, 2025, was $16,272,000, up from $14,692,000 in the same period of 2024, reflecting a margin of 18.9%[28] - Non-GAAP net income for the three months ended September 30, 2025, was $12,812,000, compared to a loss of $3,105,000 in the same period of 2024[30] - Non-GAAP EPS for the three months ended September 30, 2025, was $0.88, compared to a loss of $0.22 in the same period of 2024[30] - The company’s total adjusted EBITDA for the nine months ended September 30, 2025, was $48,245,000, compared to $38,460,000 for the same period in 2024, indicating a significant year-over-year increase[28] Revenue Composition - Recurring revenue accounted for 94% of total revenue in Q3 2025[3] - Total recurring revenues for the three months ended September 30, 2025, were $80,939,000, slightly increasing from $80,565,000 in the same period of 2024[32] - The company reported total non-recurring revenues of $5,167,000 for the three months ended September 30, 2025, compared to $4,135,000 in the same period of 2024, marking an increase of 25%[32] Bookings and Future Expectations - Total bookings for Q4 2025 are expected to be $15.5 million, down from $21.0 million[3] - Total bookings for the three months ended September 30, 2025, were $15,503,000, down 26% from $20,950,000 in the same period of 2024[17] - The company reported a total of $63,097,000 in bookings for the nine months ended September 30, 2025, a decrease of 7% from $67,810,000 in 2024[17] - Financial Health segment bookings for the three months ended September 30, 2025, were $9,507,000, down from $12,496,000 in 2024, representing a decline of 23.9%[17] - Patient Care segment bookings for the nine months ended September 30, 2025, were $27,105,000, slightly down from $27,464,000 in 2024, indicating a decrease of 1.3%[17] - The company plans to transition to reporting total bookings on an Annual Contract Value (ACV) basis starting January 2025, enhancing revenue recognition clarity[18] Financial Health and Assets - Total assets increased to $399,412,000 as of September 30, 2025, compared to $394,432,000 on December 31, 2024, reflecting a growth of 0.25%[13] - Cash and cash equivalents increased to $19,920,000 at the end of the period, compared to $12,324,000 at the beginning, marking a growth of 61.5%[15] - Total current liabilities increased to $53,749,000 as of September 30, 2025, compared to $52,975,000 on December 31, 2024, reflecting a rise of 1.5%[13] - Net income for the nine months ended September 30, 2025, was $8,641,000, a significant improvement from a net loss of $15,390,000 in the same period of 2024[15] Leadership and Strategic Initiatives - The company has made leadership enhancements, including hiring a Chief Business Officer to drive growth[2] - TruBridge aims to achieve greater EBITDA margins and free cash flow in the coming years through strategic improvements[2] Non-GAAP Financial Measures - Stock-based compensation is a non-cash expense that is excluded from non-GAAP financial measures due to its variability and lack of direct correlation to business performance[38] - Non-recurring charges related to severance and business transformation initiatives are excluded from non-GAAP financial measures as they may not reflect underlying business performance[38] - Non-cash interest expense, including amortization of deferred debt issuance costs, is excluded from non-GAAP financial measures for similar reasons[38] - Interest expense and other income, which includes interest incurred on loans, is excluded from non-GAAP financial measures due to its transactional nature[38] - Gains or losses on the disposal of property and equipment are excluded from non-GAAP financial measures as they may not correlate with business performance[38] - The gain on the sale of AHT, a previously wholly-owned business, is excluded from non-GAAP financial measures due to its specific transaction nature[38] - Changes in fair value of contingent consideration from the acquisition of Viewgol are excluded from non-GAAP financial measures as they may not reflect ongoing business performance[38] - Tax shortfalls or windfalls from stock-based compensation are excluded from non-GAAP financial measures due to their variability and lack of correlation to business performance[38]

Core Points - TruBridge, Inc. will release its financial results for Q3 2025 on November 6, 2025, after market close, followed by a conference call on November 7, 2025 [1] - The conference call will be accessible via phone and will also be broadcasted live on the company's investor relations website [2] - TruBridge specializes in revenue cycle management and healthcare technology solutions for rural and community healthcare organizations, with over 1,500 clients nationwide [3] Company Developments - Michael Daughton has been appointed as Chief Business Officer effective October 6, 2025, to enhance client-centered excellence and growth [5] - TruBridge has expanded its partnership with Java Medical Group to standardize technology and services across its managed hospitals, utilizing the TruBridge nTrust offering [6] Financial Performance - In Q2 2025, TruBridge reported total bookings of $25.6 million, up from $23.3 million, and total revenue of $85.7 million, slightly up from $85.6 million, with recurring revenue making up 95% of total revenue [7]

Core Insights - TruBridge has appointed Michael Daughton as Chief Business Officer effective October 6, 2025, to enhance client-centered excellence and growth [1] Company Overview - TruBridge is a leading provider of revenue cycle management and healthcare technology solutions specifically for rural and community healthcare organizations [1]

Company Overview - TruBridge, Inc. (TBRG) focuses on providing technology solutions for the U.S. healthcare sector, particularly for small rural and community hospitals [2] - The company operates in two main segments: Financial Health, which includes revenue cycle management services, and Patient Care, which encompasses electronic health records and patient engagement platforms [2] Financial Performance - Financial Health now accounts for 64% of TruBridge's revenue and is identified as the company's growth engine [3] - The company has experienced significant impairments due to costly acquisitions, impacting performance and leading to all-time low share prices in 2023 [3] - Cash flow has improved through tighter working capital management and debt reduction, with leverage decreasing from 4.4x in 2024 to a manageable range of 2.5x–3x [4] Governance and Investment - New investors, including Pinetree Capital and Ocho Investments, now hold a combined 25% stake in TruBridge, prompting governance reforms such as annual board elections and the removal of the poison pill [3] - Improved governance and stronger financial discipline are seen as catalysts for a turnaround story for TruBridge [5] Strategic Focus - TruBridge is concentrating on expanding its Financial Health services while leveraging strong retention rates in Patient Care for cross-selling opportunities [4] - The company is also pursuing offshore operations to reduce costs and improve margins, targeting a 20% adjusted EBITDA [4] Market Outlook - Regulatory risks persist, particularly regarding potential funding changes related to Medicare and Medicaid, but stricter compliance requirements may increase demand for TruBridge's solutions [5] - The combination of governance reforms, financial discipline, and a clear margin expansion strategy positions TruBridge for potential upside [5]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and detailed accounting notes [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents TruBridge, Inc.'s unaudited condensed consolidated financial statements and detailed accounting notes for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets (Unaudited) – June 30, 2025 and December 31, 2024](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) **Condensed Consolidated Balance Sheets (In thousands):** | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total assets | $390,151 | $394,432 | | Total liabilities | $216,978 | $225,737 | | Total stockholders' equity | $173,173 | $168,695 | - Total assets decreased by **$4.281 million** from December 31, 2024, to June 30, 2025, while total liabilities decreased by **$8.759 million**, and total stockholders' equity increased by **$4.478 million**[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations (Unaudited) – Three and Six Months Ended June 30, 2025 and 2024](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) **Condensed Consolidated Statements of Operations (In thousands, except per share data):** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $85,729 | $85,600 | $172,937 | $169,717 | | Operating income (loss) | $3,627 | $(2,149) | $11,787 | $(2,737) | | Net income (loss) | $2,580 | $(4,388) | $3,039 | $(6,242) | | Net income (loss) per common share—basic | $0.17 | $(0.29) | $0.20 | $(0.42) | | Net income (loss) per common share—diluted | $0.17 | $(0.29) | $0.20 | $(0.42) | - For the three months ended June 30, 2025, total revenues slightly increased by **$0.129 million**, operating income improved significantly from a loss of **$2.149 million** to an income of **$3.627 million**, and net income turned positive at **$2.580 million** compared to a net loss of **$4.388 million** in the prior year[12](index=12&type=chunk) - For the six months ended June 30, 2025, total revenues increased by **$3.220 million (2%)**, operating income improved from a loss of **$2.737 million** to an income of **$11.787 million**, and net income was **$3.039 million** compared to a net loss of **$6.242 million** in the prior year[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - Three and Six Months Ended June 30, 2025 and 2024](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) **Condensed Consolidated Statements of Comprehensive Income (Loss) (In thousands):** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $2,580 | $(4,388) | $3,039 | $(6,242) | | Foreign currency translation adjustment | $(12) | $(5) | $(18) | $108 | | Comprehensive income (loss) | $2,568 | $(4,393) | $3,021 | $(6,134) | - Comprehensive income for the three months ended June 30, 2025, was **$2.568 million**, a significant improvement from a loss of **$4.393 million** in the prior year, primarily driven by the increase in net income[13](index=13&type=chunk) - For the six months ended June 30, 2025, comprehensive income was **$3.021 million**, compared to a loss of **$6.134 million** in the prior year, also reflecting the positive shift in net income[13](index=13&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity (Unaudited) – Three and Six Months Ended June 30, 2025 and 2024](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) **Condensed Consolidated Statements of Stockholders' Equity (In thousands):** | Item | Balance at June 30, 2025 | Balance at June 30, 2024 | | :-------------------------------- | :----------------------- | :----------------------- | | Common Stock | $15 | $15 | | Additional Paid-in Capital | $204,376 | $197,846 | | Accumulated Earnings (Deficit) | $(11,913) | $(755) | | Accumulated Other Comprehensive Income | $27 | $108 | | Treasury Stock | $(19,332) | $(17,434) | | Total Stockholders' Equity | $173,173 | $179,780 | - Total stockholders' equity decreased from **$179.780 million** at June 30, 2024, to **$173.173 million** at June 30, 2025, primarily due to an increase in treasury stock and a larger accumulated deficit, despite an increase in additional paid-in capital[15](index=15&type=chunk) - For the six months ended June 30, 2025, net income of **$3.039 million** and stock-based compensation of **$3.310 million** increased equity, while treasury stock acquisitions of **$1.853 million** reduced it[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited) – Six Months Ended June 30, 2025 and 2024](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) **Condensed Consolidated Statements of Cash Flows (In thousands):** | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $14,517 | $11,730 | | Net cash (used in) provided by investing activities | $(6,959) | $11,116 | | Net cash used in financing activities | $(7,603) | $(18,944) | | (Decrease) increase in cash and cash equivalents | $(45) | $3,902 | | Cash and cash equivalents at end of period | $12,279 | $7,709 | - Net cash provided by operating activities increased by **$2.787 million** to **$14.517 million** for the six months ended June 30, 2025, driven by increased net income and decreased deferred taxes[17](index=17&type=chunk)[198](index=198&type=chunk) - Net cash used in investing activities was **$6.959 million** for the six months ended June 30, 2025, a decrease of **$18.075 million** from the prior year's cash provided by investing activities, primarily due to the sale of AHT in 2024[17](index=17&type=chunk)[199](index=199&type=chunk) - Net cash used in financing activities decreased to **$7.603 million** for the six months ended June 30, 2025, from **$18.944 million** in the prior year, mainly due to lower long-term debt principal payments[17](index=17&type=chunk)[200](index=200&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. BASIS OF PRESENTATION](index=11&type=section&id=1.%20BASIS%20OF%20PRESENTATION) This note outlines the basis for preparing the unaudited condensed consolidated financial statements, including adherence to SEC rules and U.S. GAAP, and details segment realignment and a revision of prior financial statements - The Company realigned its reporting structure in May 2024, changing from three segments (Revenue Cycle Management, Electronic Health Records, Patient Engagement) to two segments: Financial Health (formerly RCM) and Patient Care (formerly EHR, now including Patient Engagement)[22](index=22&type=chunk) **Revision of Previously Issued Financial Statements (Three Months Ended June 30, 2024, In thousands, except per share data):** | Item | As previously reported | Impact of revision | As adjusted | | :----------------------------------- | :--------------------- | :----------------- | :---------- | | Total revenue | $84,730 | $8

Financial Data and Key Metrics Changes - Bookings for the quarter were $25.6 million on a TCV basis, up from $22 million sequentially and $23 million year-over-year, representing a 10% increase year-over-year [6][23] - Revenue for the quarter was $85.7 million, which was at the lower end of expectations, and adjusted EBITDA was $13.7 million, slightly ahead of the midpoint [6][24] - The adjusted EBITDA margin for Q2 was 16%, compared to 15.7% in the previous year, with a revised EBITDA outlook reflecting a margin of 18.5% at the midpoint, up from 17% in previous guidance [22][15] Business Line Data and Key Metrics Changes - Financial health revenue was $54.3 million, relatively flat and representing 63% of total revenue, with a year-to-date growth of 2.3% [24][25] - Patient care revenue increased to $31.4 million, up approximately 1.1%, and would have grown almost 4% excluding the Centric product's contribution from the previous year [25] - Gross margins for financial health were 46%, up 150 basis points year-over-year, while patient care gross margins reached 62%, increasing 400 basis points year-over-year [25][26] Market Data and Key Metrics Changes - Accounts receivable improved by 5% in Q2, and Days Sales Outstanding (DSO) improved by four days compared to the prior year [21] - The company ended the quarter with a net leverage of 2.4 times, an improvement from 3.9 times a year ago [21] Company Strategy and Development Direction - The company is focusing on enhancing operations, driving efficiencies, and unlocking the value of its existing customer base, with plans to operationalize these strategies in the second half of the year [5][10] - A physical presence in India is being established to standardize workflow and improve productivity, with an opening targeted for 2026 [11] - The company is leveraging AI to enhance both internal efficiency and client experience, collaborating with Microsoft to integrate advanced AI capabilities into its EHR solution [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving long-term objectives despite challenges, emphasizing the importance of client retention and operational improvements [4][13] - The company anticipates potential headwinds in the second half of the year due to external policy uncertainties but sees long-term opportunities in helping clients navigate the new landscape [36][36] - The revised guidance reflects a lower top end of revenue range but an increase in adjusted EBITDA range, indicating prudent expense management and resource optimization [27] Other Important Information - The company signed a significant deal in Q2 that will not start contributing revenue until 2026, highlighting the longer implementation times for larger contracts [14] - The company is actively working on strengthening its accounting processes and internal controls, with KPMG selected as the new independent registered public accountant [22] Q&A Session Summary Question: Can you provide more details on the savings and efficiency initiatives? - Management indicated that they are working on modernizing client support and expect to realize savings starting in Q4, with a run rate in the low single-digit millions [30][32] Question: How has the recent legislation impacted client budgeting and contract signing? - Management noted that there was initial uncertainty, but now that the legislation has passed, hospitals are starting to plan, which may lead to potential headwinds in sales for the second half of the year [34][36] Question: What are the leading indicators for maintaining consistent bookings above $20 million? - Management expressed confidence in bookings performance, noting a balance between patient care and financial health, but acknowledged challenges in the patient care net new market [42][45] Question: Can you elaborate on retention trends by segment? - Management reported strong retention rates in patient care, while financial health is seeing improvements month over month, with a focus on enhancing operational efficiency [48][51] Question: What is the assessment of the Vugal acquisition? - Management remains pleased with the acquisition but acknowledged challenges in scaling operations and the need for standardization to improve performance [56][58]