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]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 nearly doubled to $18,200,000 compared to $10,000,000 in Q1 2024, with cash flow from operations increasing over $7,000,000 [5][20] - Revenue for Q1 2025 was $87,200,000, reflecting a year-over-year increase of 3.7%, and adjusted EBITDA margin improved to 20.9%, up 860 basis points from the prior year [24][28] - Net leverage ratio improved to 2.4 times in Q1 2025, down from 4.4 times a year ago [5][20] Business Line Data and Key Metrics Changes - Bookings for Q1 2025 totaled $22,000,000, down from $24,000,000 year-over-year, with financial health bookings at $13,000,000, a 50% sequential increase [6][7] - Patient care bookings were $9,000,000, a 60% sequential increase, with customer retention at 98% excluding Sentric [7][15] - Financial health represented 64% of total revenue at $56,100,000, a 5% increase year-over-year, while patient care revenue was $31,100,000, up 1.3% [26][27] Market Data and Key Metrics Changes - The company noted ongoing uncertainty related to future healthcare funding and potential impacts of tariffs on customer decision-making [10] - The shift to a SaaS model has affected the revenue mix, with a focus on recurring revenue rather than one-time fees [70] Company Strategy and Development Direction - The company is increasing investments in operational initiatives, including standardizing the global hiring process and enhancing customer service [12][14] - There is a focus on automation and leveraging AI to improve revenue cycle management [13][55] - The company aims to transition all bookings to an annual contract value (ACV) basis by 2026 for clearer revenue recognition [9][24] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding customer sentiment amid policy changes and potential impacts on hospital budgets [40] - The company is committed to improving forecasting processes and maintaining revenue expectations while increasing adjusted EBITDA guidance for the full year [30][31] Other Important Information - The company ended Q1 2025 with $10,100,000 in cash, compared to $4,100,000 a year ago, and net debt of $158,000,000 [29] - Operating expenses decreased to 45.3% of total revenue, down from 51.1% a year ago, due to cost optimization actions [28] Q&A Session Summary Question: Impact of policy changes on sales cycle - Management noted that while there is cautious sentiment regarding policy changes, they have not seen immediate impacts on sales conversations [39] Question: Potential net savings from staffing changes - Management expects mid-single-digit million savings from reducing duplicity in offshore and onshore staffing [43] Question: Meredith's plan of action and client retention - Focus is on improving client delight and retention through better training and infrastructure as the offshore operations scale up [50] Question: Non-subscription component of patient care bookings - Management acknowledged a shift to recurring revenue models and noted that new offerings are primarily based on the SaaS model [70] Question: Financial health client wins in the hospital market - Management confirmed that recent wins were in both the lower and upper ends of the 100 to 400 bed range, emphasizing the need for RCM services in this segment [74]