Trubridge, Inc. ((TBRG)) has held its Q1 earnings call. Read on for the main highlights of the call.
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TruBridge, Inc. Reports Strong Financial Performance Amid External Challenges
The latest earnings call from TruBridge, Inc. painted a largely positive picture of the company’s financial health, despite some external challenges. The sentiment during the call was optimistic, driven by significant improvements in financial performance, including a doubling of EBITDA, increased cash flow, and reduced leverage. However, caution was advised due to uncertainties in healthcare funding and tariffs that could influence customer decision-making.
Significant Improvement in Financial Metrics
TruBridge, Inc. reported a remarkable improvement in its financial metrics, with adjusted EBITDA nearly doubling to $18.2 million from $10 million the previous year. The company also saw a substantial increase in cash flow from operations, which rose by over $7 million. Additionally, the net leverage ratio decreased significantly from 4.4x to 2.4x, indicating a stronger financial position.
Revenue and Bookings Growth
The company achieved a revenue of $87 million, marking a 3.7% year-over-year increase. Bookings for the first quarter totaled $22 million, with Financial Health bookings increasing by 50% and Patient Care bookings by 60%. This growth reflects the company’s successful strategies in expanding its market presence.
Successful Transition to Offshore Operations
TruBridge has successfully transitioned approximately 30% of its CBO clients to offshore operations, which has contributed to improved gross margins. The company aims to increase this to 60% by the end of 2025, further enhancing operational efficiency and cost-effectiveness.
High Customer Retention Rates
The company maintained high customer retention rates, with Patient Care customer retention at 98%, excluding Centriq, compared to mid-90s in the previous year. Financial Health renewed 9 out of 11 clients up for renewal, showcasing strong customer loyalty.
Improved Gross Margins
TruBridge reported a significant increase in gross margins, which rose by 430 basis points to 54.7% year-over-year. Financial Health gross margins saw an even more impressive rise of 700 basis points, underscoring the company’s operational improvements.
Challenges in Health Care Funding and Tariff Uncertainty
Despite the positive financial results, TruBridge faces challenges related to ongoing uncertainties in healthcare funding and potential tariff impacts. These external factors could slow down customer decision-making processes, posing a risk to future growth.
Bookings with Limited Revenue Impact
Approximately 25% of the first quarter bookings are expected to have little to no revenue impact in 2025 due to extended go-live timelines driven by specific customer situations. This highlights the need for careful management of customer expectations and project timelines.
Sales Cycle Caution Due to External Factors
Customers are exercising caution in their purchasing decisions due to potential changes in Medicare expansion and reimbursement policies. This could impact the timing of purchases and overall sales cycles, necessitating strategic adjustments by TruBridge.
Forward-Looking Guidance
Looking ahead, TruBridge remains confident in the demand for its solutions, despite potential uncertainties. The company plans to continue its focus on improving collections and operational efficiencies, with a target of having 60% of its CBO clients supported offshore by the end of 2025. The transition to reporting bookings on an annual contract value basis is also in the pipeline, with Q1 2025 ACV bookings reported at $17.3 million.
In summary, TruBridge, Inc.’s earnings call highlighted strong financial performance and operational progress, with a positive outlook tempered by caution regarding external factors. The company’s strategic initiatives, including offshore transitions and high customer retention rates, position it well for future growth, despite challenges in the healthcare sector.