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]