CPSI(CPSI) - 2025 Q1 - Quarterly Results

First Quarter 2025 Results Overview Highlights and CEO Commentary TruBridge exceeded Q1 expectations with strong bookings, significant scope expansion in Financial Health, and reduced its leverage ratio to 2.4x - TruBridge exceeded Q1 2025 expectations, showing positive booking trends with significant wins in both Financial Health and Patient Care segments[3] - The company introduced a new bookings reporting method focusing on Annual Contract Value (ACV) for increased transparency[3] - TruBridge paid down additional debt, reducing its leverage ratio to 2.4x[3] - Merideth Wilson was welcomed as the new General Manager of the Financial Health business unit, with a plan to ensure the smooth progression of the global workforce transition[4] Segment Reporting Update TruBridge updated its financial reporting to two segments: Financial Health (formerly RCM) and Patient Care (formerly EHR, including patient engagement) - TruBridge now reports two segments: Financial Health (previous RCM) and Patient Care (previous EHR, including patient engagement business)[2] Financial Guidance Second Quarter 2025 Outlook For Q2 2025, TruBridge anticipates total bookings of $22.0 million, total revenue of $87.2 million, and Adjusted EBITDA of $18.2 million Q2 2025 Financial Expectations | Metric | Q2 2025 Expectation | Q2 2024 Comparison | | :-------------------------- | :------------------- | :------------------- | | Total bookings | $22.0 million | $23.6 million | | Total revenue | $87.2 million | $84.1 million | | Recurring revenue % | 94% of total revenue | | | Financial Health revenue | $56.1 million | $53.4 million | | Financial Health revenue % | 64% of total revenue | | | GAAP net income | $0.5 million | Net loss of $1.9 million | | Non-GAAP net income | $5.2 million | $3.4 million | | Adjusted EBITDA | $18.2 million | $10.3 million | Full Year 2025 Outlook TruBridge maintains its full-year 2025 total revenue guidance at $345 million to $360 million and revised its Adjusted EBITDA guidance to $60 million-$66 million Full Year 2025 Financial Expectations | Metric | Full Year 2025 Expectation | Change from Previous | | :---------------- | :------------------------- | :------------------- | | Total revenue | $345 million to $360 million | Unchanged | | Adjusted EBITDA | $60 million to $66 million | Revised from $59 million to $66 million | Company Information About TruBridge TruBridge is a healthcare solutions company with over four decades of experience, partnering with over 1,500 healthcare organizations - TruBridge is a healthcare solutions company serving over 1,500 healthcare organizations with technology-first solutions[8] - The company has over four decades of experience, providing innovative data-driven solutions for both financial (RCM) and clinical (EHR) healthcare delivery[8] - TruBridge focuses on promoting equitable access to quality care and fostering positive outcomes, especially in rural and community markets[8] Investor Relations and Media Contact information for investor relations (Asher Dewhurst, ICR Healthcare) and media inquiries (Tracey Schroeder, Chief Marketing Officer) is provided - Investor relations contact is Asher Dewhurst at ICR Healthcare (TBRGIR@westwicke.com)[9] - Media contact is Tracey Schroeder, Chief Marketing Officer (Tracey.schroeder@trubridge.com)[9] Forward-Looking Statements The press release contains forward-looking statements subject to various risks and uncertainties, including market saturation, economic conditions, and regulatory changes - The press release includes forward-looking statements, which are predictions and not guarantees of future performance[9] - Factors that could cause actual results to differ materially include market saturation, unfavorable economic conditions, legislative and regulatory uncertainty in healthcare, competition, and risks associated with acquisitions and technology[9] - The company does not anticipate paying dividends on common stock and will not update forward-looking statements to reflect future events[10] Condensed Consolidated Financial Statements Statements of Operations For Q1 2025, TruBridge reported total revenues of $87.2 million, an operating income of $8.16 million, and net income of $0.459 million, resulting in basic and diluted EPS of $0.03 Condensed Consolidated Statements of Operations (in '000s) | Metric (in '000s) | 2025 | 2024 | YoY Change | | :-------------------------------------------------- | :----- | :----- | :--------- | | Revenues | | | | | Financial Health | $56,133 | $53,439 | +5.0% | | Patient Care | $31,075 | $30,678 | +1.3% | | Total revenues | $87,208 | $84,117 | +3.7% | | Expenses | | | | | Total costs of revenue (exclusive of amortization and depreciation) | $39,513 | $41,759 | -5.4% | | Product development | $8,247 | $10,689 | -22.8% | | Sales and marketing | $5,409 | $6,592 | -18.0% | | General and administrative | $19,464 | $19,396 | +0.3% | | Amortization | $6,124 | $5,869 | +4.3% | | Depreciation | $291 | $400 | -27.3% | | Total expenses | $79,048 | $84,705 | -6.7% | | Operating income (loss) | $8,160 | $(588) | N/A (swing to profit) | | Interest expense | $(3,382) | $(4,072) | -16.9% | | Other income | $144 | $1,422 | -89.9% | | Total other expense | $(3,238) | $(2,650) | +22.2% | | Income (loss) before taxes | $4,922 | $(3,238) | N/A (swing to profit) | | Income tax expense (benefit) | $4,463 | $(1,384) | N/A (swing to expense) | | Net income (loss) | $459 | $(1,854) | N/A (swing to profit) | | Net income (loss) per common share—basic | $0.03 | $(0.13) | N/A (swing to profit) | | Net income (loss) per common share—diluted | $0.03 | $(0.13) | N/A (swing to profit) | Balance Sheets As of March 31, 2025, TruBridge reported total assets of $388.8 million, total liabilities of $220.3 million, and stockholders' equity of $168.5 million Condensed Consolidated Balance Sheets (in '000s) | Metric | March 31, 2025 | December 31, 2024 | Change | | :-------------------------------------------------- | :--------------- | :---------------- | :----- | | Assets | | | | | Cash and cash equivalents | $10,124 | $12,324 | $(2,200) | | Accounts receivable, net | $56,575 | $53,753 | $2,822 | | Total current assets | $87,334 | $90,274 | $(2,940) | | Property & equipment, net | $2,361 | $2,294 | $67 | | Software development costs, net | $42,379 | $41,474 | $905 | | Intangible assets, net | $73,654 | $76,707 | $(3,053) | | Goodwill | $172,573 | $172,573 | $0 | | Total assets | $388,842 | $394,432 | $(5,590) | | Liabilities & Stockholders' Equity | | | | | Accounts payable | $14,870 | $15,040 | $(170) | | Current portion of long-term debt | $2,980 | $2,980 | $0 | | Deferred revenue | $9,456 | $10,653 | $(1,197) | | Total current liabilities | $51,683 | $52,975 | $(1,292) | | Long-term debt, less current portion | $164,853 | $168,598 | $(3,745) | | Total liabilities | $220,334 | $225,737 | $(5,403) | | Total stockholders' equity | $168,508 | $168,695 | $(187) | | Total liabilities and stockholders' equity | $388,842 | $394,432 | $(5,590) | Statements of Cash Flows For Q1 2025, operating activities provided $5.76 million, investing activities used $(2.232) million, and financing activities used $(5.728) million, resulting in a $2.2 million decrease in cash Condensed Consolidated Statements of Cash Flows (in '000s) | Metric | 2025 | 2024 | Change | | :------------------------------------------ | :----- | :----- | :----- | | Net cash provided by (used in) operating activities | $5,760 | $(2,034) | $7,794 | | Net cash provided by (used in) investing activities | $(2,232) | $16,394 | $(18,626) | | Net cash used in financing activities | $(5,728) | $(14,052) | $8,324 | | Increase (decrease) in cash and cash equivalents | $(2,200) | $308 | $(2,508) | | Cash and cash equivalents, end of period | $10,124 | $4,115 | $6,009 | Supplemental Financial Data (Non-GAAP & Bookings) Consolidated Bookings TruBridge reported Q1 2025 total bookings of $21.981 million (historical) and $17.340 million (ACV), transitioning to ACV for future reporting - TruBridge is transitioning its bookings reporting to an Annual Contract Value (ACV) basis, which represents newly contracted revenue expected over a twelve-month period[19][24] - The company will provide bookings under both methodologies throughout 2025 for year-over-year comparability before fully transitioning to ACV in 2026[19][24] Bookings by Segment (Historical Methodology) Bookings by Segment (Historical Methodology, in '000s) | Segment | 2025 | 2024 | YoY Change | | :-------------- | :----- | :----- | :--------- | | Financial Health | $12,780 | $14,391 | -11.2% | | Patient Care | $9,201 | $9,178 | +0.25% | | Total Bookings | $21,981 | $23,569 | -6.7% | Bookings by Segment (Annual Contract Value - ACV) Bookings by Segment (Annual Contract Value - ACV, in '000s) | Segment | 2025 (ACV) | | :-------------- | :--------- | | Financial Health | $12,780 | | Patient Care | $4,560 | | Total Bookings (ACV) | $17,340 | Bookings Composition Bookings Composition (in '000s) | Category | 2025 | 2024 | | :-------------------- | :----- | :----- | | Financial Health | | | | Net new | $6,221 | $8,993 | | Cross-sell | $6,559 | $5,398 | | Patient Care | | | | Non-subscription sales | $2,602 | $3,450 | | Subscription revenue | $6,599 | $5,728 | | Total Bookings | $21,981 | $23,569 | - "Net new" bookings are from outside the core Patient Care client base, while "Cross-sell" bookings are from existing Patient Care customers, both generally recurring revenues recognized over one year[22] - Patient Care non-subscription sales are nonrecurring, while subscription revenue is recurring, recognized monthly over a weighted-average contract period of five years[23] Adjusted EBITDA TruBridge's total Adjusted EBITDA significantly increased to $18.231 million in Q1 2025 from $10.324 million in Q1 2024, with the Adjusted EBITDA Margin improving to 20.9% - Adjusted EBITDA is a non-GAAP measure that adjusts GAAP net income for items like depreciation, amortization, stock-based compensation, severance, interest expense, and income taxes[38] Adjusted EBITDA by Segment Adjusted EBITDA by Segment (in '000s) | Segment | 2025 | 2024 | YoY Change | | :-------------- | :----- | :----- | :--------- | | Financial Health | $11,281 | $6,797 | +66.0% | | Patient Care | $6,950 | $3,527 | +97.0% | | Total Adjusted EBITDA | $18,231 | $10,324 | +76.6% | Reconciliation of Adjusted EBITDA Reconciliation of Adjusted EBITDA (in '000s) | Metric | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | Net income (loss), as reported | $459 | $(1,854) | | Net Income (Loss) Margin | 0.5% | (2.2%) | | Depreciation expense | $291 | $400 | | Amortization of software development costs | $3,071 | $2,742 | | Amortization of acquisition-related intangibles | $3,053 | $3,127 | | Stock-based compensation | $1,213 | $800 | | Severance and other nonrecurring charges | $2,443 | $3,844 | | Interest expense and other, net | $3,291 | $3,899 | | Gain on sale of AHT | $(53) | $(1,250) | | Provision (benefit) for income taxes | $4,463 | $(1,384) | | Total Adjusted EBITDA | $18,231 | $10,324 | | Adjusted EBITDA Margin | 20.9% | 12.3% | Non-GAAP Net Income and EPS Non-GAAP net income for Q1 2025 was $5.192 million, a 54.1% increase from Q1 2024, resulting in Non-GAAP EPS of $0.36 - Non-GAAP net income adjusts GAAP net income for acquisition-related intangible assets amortization, stock-based compensation, severance and other nonrecurring charges, non-cash interest expense, gain on sale of AHT, and their tax effects[38] Reconciliation of Non-GAAP Net Income and EPS Reconciliation of Non-GAAP Net Income and EPS (in '000s) | Metric | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | Net income (loss), as reported | $459 | $(1,854) | | Pre-tax adjustments for Non-GAAP EPS: | | | | Amortization of acquisition-related intangible assets | $3,053 | $3,127 | | Stock-based compensation | $1,213 | $800 | | Severance and other nonrecurring charges | $2,443 | $3,844 | | Non-cash interest expense | $130 | $90 | | Gain on sale of AHT | $0 | $(1,250) | | After-tax adjustments for Non-GAAP EPS: | | | | Tax-effect of pre-tax adjustments, at 21% | $(1,436) | $(1,388) | | Tax windfall from stock-based compensation | $(670) | $0 | | Non-GAAP net income | $5,192 | $3,369 | | Weighted average shares outstanding, diluted | 14,370 | 14,234 | | Non-GAAP EPS | $0.36 | $0.24 | Revenue Composition Total revenues for Q1 2025 were $87.208 million, with recurring revenues at 94.0% and non-recurring revenues at 6.0% Revenue Composition (in '000s) | Category | 2025 | 2024 | YoY Change | | :-------------------- | :----- | :----- | :--------- | | Recurring revenues | | | | | Financial Health | $55,263 | $52,116 | +6.0% | | Patient Care | $26,707 | $28,544 | -6.4% | | Total recurring revenues | $81,970 | $80,660 | +1.6% | | Non-recurring revenues | | | | | Financial Health | $870 | $1,323 | -34.3% | | Patient Care | $4,368 | $2,134 | +104.7% | | Total non-recurring revenues | $5,238 | $3,457 | +51.5% | | Total revenues | $87,208 | $84,117 | +3.7% | Explanation of Non-GAAP Financial Measures TruBridge uses non-GAAP financial measures like Adjusted EBITDA and Non-GAAP net income to supplement GAAP results, providing insights into operational performance - Non-GAAP financial measures are used by management to evaluate operating performance, compare against past periods, make operating decisions, and for strategic planning, by excluding certain non-cash or non-recurring items[35] - Key adjustments for non-GAAP measures include amortization of acquisition-related intangibles, stock-based compensation, severance and other nonrecurring charges, non-cash interest expense, and gain on sale of AHT[37][38][40] - Non-GAAP financial measures are performance measures only and do not provide a measure of cash flow or liquidity; they are not alternatives to GAAP measures and may differ from similarly titled measures presented by other companies[39]