Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- TruBridge Inc (TBRG, Financial) reported strong bookings for the fourth consecutive quarter, exceeding $20 million.
- Financial Health revenue grew by 5% organically, with core CBO business up by double digits.
- Adjusted EBITDA increased, with margins expanding to 16.5% this quarter.
- Cash flow from operations improved significantly, reaching $22 million year-to-date, up by $9 million compared to last year.
- The integration of the Viewgol acquisition is progressing well, with plans to double the number of customers supported by the workforce in India by the end of 2025.
Negative Points
- Patient Care revenue decreased by 18% compared to last year, primarily due to the impact of divestitures and sunsetting of certain products.
- There are ongoing challenges with stabilizing operations and achieving significant margin improvements, expected to yield results in 2025.
- The company identified two material weaknesses in internal controls, though plans are in place for remediation.
- There is a need for careful management of customer transitions to offshore services to maintain service quality.
- The competitive environment remains challenging, with peers announcing new products and market entries.
Q & A Highlights
Q: Can you provide insights into the characteristics of new clients in the Financial Health segment? Are these predominantly smaller hospitals, or are you gaining traction with larger institutions?
A: We are starting to see momentum in the 100- to 400-bed space, moving beyond our traditional base of critical access and rural hospitals. The macro demand remains consistent, with ongoing labor pressures and billing complexities, particularly with the shift towards Medicare Advantage. - Christopher Fowler, CEO
Q: How should we think about the savings from offshoring operations, and when will these savings become more meaningful?
A: We have started seeing smaller net savings in Q3, with larger savings expected in Q4. By 2025, we anticipate significant savings, potentially in the high single-digit millions on a run rate basis. - Vinay Bassi, CFO
Q: Can you discuss the competitive environment, particularly in the patient care segment, and how TruBridge is positioning itself?
A: We focus on incremental improvements in our EHR and leveraging analytics to drive outcomes and efficiency. The labor market pressures are similar in patient care, and we aim to make our software more user-friendly, allowing more time for patient interaction. Our implementation and support models continue to differentiate us. - Christopher Fowler, CEO
Q: Regarding the nTrust solution, you mentioned that not all contracts are equal. Can you elaborate on this?
A: Our pricing is based on a percentage of collections, which varies with the facility's volume. While revenue is important, we are also focused on capturing market share, which may involve facilities with varying net patient revenues. - Christopher Fowler, CEO
Q: Are there any further cost rationalization opportunities next year, especially with the move to offshore services?
A: We will maintain a mix of domestic and offshore resources, with a focus on moving more customers offshore. We continuously evaluate cost rationalization opportunities, but our priority is ensuring global success and client satisfaction. - Vinay Bassi, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
