Q2 2024 TruBridge Inc Earnings Call

Operator: Thank you for standing by. My name is Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to the TruBridge Future Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

Operator: Thank you for standing by.

Mark: My name is Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to TruBridge Theatre Ernie's conference call. All lines have been placed on mute to prevent any background noise.

Mark: Thank you for standing by. My name is Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to TruBridge Q2 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question and answer session.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Dru Anderson. Dru, please go ahead.

Mark: After the speaker's remarks, there will be a question-and-answer session.

Mark: If you would like to ask a question during this time, center for a star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.

Mark: If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Dru Anderson. Dru, please go ahead.

Dru Anderson: I would now like to turn the call over to Tru Anderson.

Dru Anderson: True, please go ahead. Thank you.

Dru Anderson: Thank you. Good afternoon, and welcome to the TruBridge second quarter 2024 earnings conference call. Leading today's call are Chris Fowler, President and Chief Executive Officer, and Vinay Bassi, Chief Financial Officer. This call may include statements regarding future operating plans, expectations, and performance that constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company cautions you that any such forward-looking statements only reflect management expectations and predictions based upon currently available information and are not guarantees of future results or performance.

Chris Fowler: Good afternoon, and welcome to the TruBridge second quarter 2024 Ernie's conference call.

Dru Anderson: Thank you. Good afternoon and welcome to the TruBridge second quarter 2024 earnings conference call.

Chris Fowler: Leading today's call are Chris Fowler, President and Chief Executive Officer, and Vinay Bassi, Chief Financial Officer.

Speaker Change: Leading today's call are Chris Fowler, President and Chief Executive Officer, and Vinay Bassi, Chief Financial Officer.

Chris Fowler: This call may include statements regarding future operating plans, expectations, and performance that constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company cautioned you that any such forward-looking statements only reflect management expectations and predictions based upon currently available information and are not guarantees of future results or performance. Actual results might differ materially from those expressed or implied by such forward-looking statements as a result of known and unknown risks, uncertainties, and other factors, including those described in public releases and reports filed with the Securities and Exchange Commission, including but not limited to the most recent annual report on Form 10-K.

Speaker Change: This call may include statements regarding future operating plans, expectations, and performance that constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Speaker Change: The company cautions you that any such forward-looking statements only reflect management expectations and predictions based upon currently available information and are not guarantees of future results or performance.

Speaker Change: Actual results might differ materially from those expressed or implied by such forward-looking statements.

Speaker Change: as a result of known and unknown risks.

Speaker Change: uncertainties, and other factors.

Speaker Change: including those described in public releases and reports filed with the Securities and Exchange Commission, including, but not limited to, the most recent annual report on Form 10-K.

Chris Fowler: The company also cautioned investors that the forward-looking information provided in this call represents their outlook only as of this date, and they undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this call.

Speaker Change: The company also cautions investors that the forward-looking information provided in this call represents their outlook only as of this date, and they undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this call.

Chris Fowler: At this time, I will turn the call over to Mr. Chris Fowler, President and Chief Executive Officer.

Dru Anderson: Actual results might differ materially from those expressed or implied by such forward-looking statements as a result of known and unknown risks, uncertainties, and other factors, including those described in public releases and reports filed with the Securities and Exchange Commission, including, but not limited to, the most recent annual report on Form 10-K. The company also cautions investors that the forward-looking information provided in this call represents their outlook only as of this date, and they undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this call. At this time, I will turn the call over to Mr. Chris Fowler, President and Chief Executive Officer. Please go ahead, sir.

Speaker Change: At this time, I will turn the call over to Mr. Chris Fowler, President and Chief Executive Officer. Please go ahead, sir.

Chris Fowler: Please go ahead, sir. Thank you, Drew, and thank you to everyone for joining us today. I'm pleased to report that our second quarter saw continued bookings momentum, strong revenue performance, EBIT dot margin expansion, dramatic improvement cash flow from operations.

Chris Fowler: Thank you, Dru, and thank you to everyone for joining us today. I'm pleased to report that our second quarter saw continued bookings momentum, strong revenue performance, EBITDA margin expansion, and a dramatic improvement in cash flow from operations. Our total bookings for the quarter came in at $23.3 million, marking the third straight quarter over $20 million. At the beginning of the year, we said that we were cautiously optimistic about our sales momentum, and that continues to be the case.

Chris Fowler: Thank you, Dru, and thank you to everyone for joining us today. I'm pleased to report that our second quarter saw continued bookings momentum, strong revenue performance, EBITDA margin expansion, dramatic improvement in cash flow from operations.

Chris Fowler: Our total bookings for the quarter came in at 23.3 million, marking the third straight quarter over $20 million. At the first of the year, we said that we were cautiously optimistic about ourselves for a momentum, and that continues to be the case. We have also talked about the two-step process for selling our RCM services, the first being educating the client about the virtues of outsourcing, and secondly, selling True Bridge as the vendor. While still a bit anecdotal, we are seeing promising signs that the market is becoming more educated on outsourcing, thus allowing us to focus more on simply selling True Bridge as their future partner.

Chris Fowler: Our total bookings for the quarter came in at $23.3 million, marking the third straight quarter over $20 million.

Chris Fowler: At the first of the year we said that we were cautiously optimistic about our sales momentum and that continues to be the case.

Chris Fowler: We have also talked about the two-step process for selling our RCM services, the first being educating the client about the virtues of outsourcing and, secondly, selling TruBridge as the vendor. While still a bit anecdotal, we are seeing promising signs that the market is becoming more educated on outsourcing, thus allowing us to focus more on simply selling TruBridge as their future partner. Looking deeper at our bookings, our integrated in-trust solution is responding in the market.

Chris Fowler: We have also talked about the two-step process for selling our RCM services, the first being educating the client about the virtues of outsourcing, and secondly, selling TruBridge as the vendor.

Chris Fowler: While still a bit anecdotal, we are seeing promising signs that the market is becoming more educated on outsourcing, thus allowing us to focus more on simply selling TruBridge as their future partner.

Chris Fowler: Looking deeper at our bookings, our integrated interest solution is resonating in the market. In the first half of the year, we saw a 60% increase in the number of new interest clients compared to the first half of 2023. Our fully integrated solution is better for our clients as the shared risk fast model eliminates the need to budget for new products, price increases, or ongoing maintenance payments, and it has benefited the true bridge as those clients represent a higher lifetime value for us and tend to be stickier over time. Our cross-selling efforts are bearing fruit, with $7 million signed in the quarter.

Chris Fowler: Looking deeper at our bookings, our integrated in-trust solution is resonating in the market.

Chris Fowler: In the first half of the year, we saw a 60% increase in the number of new in-trust clients compared to the first half of 2023. Our fully integrated solution is better for our clients as the shared risk FAST model eliminates the need to budget for new products, price increases, or ongoing maintenance payments. This is a benefit to TruBridge as those clients represent a higher lifetime value for us and tend to be stickier over time.

Chris Fowler: In the first half of the year, we saw a 60% increase in the number of new in-trust clients compared to the first half of 2023.

Chris Fowler: Our fully integrated solution is better for our clients as the shared risk SAS model eliminates the need to budget for new products, price increases, or ongoing maintenance payments. It is a benefit to TruBridge as those clients represent a higher lifetime value for us.

Chris Fowler: Our cross-selling efforts are bearing fruit, with $7 million in revenue signed in the quarter. Several enterprise clients expanded their relationship with TruBridge to include coding and additional billing and collecting opportunities. And current CBO clients added service lines, like ambulatory billing, even in instances where they're not running REHR.

Chris Fowler: and tend to be stickier over time.

Chris Fowler: Our cross-selling efforts are bearing fruit with $7 million signed in the quarter.

Chris Fowler: Several enterprise clients expanded their relationship with TruBridge to include coding and additional billing and collecting opportunities, and current CBO clients added service funds like ambulatory billing, even in instances where they're not running our EHR. Importantly, at an increasing rate, our clients are turning to TruBridge as their sole revenue cycle partner, even when they're not yet ready to fully outsource. Last quarter, we spent time discussing the timing of our bookies to revenue conversion. While those larger deals can still take time to implement, we have seen the rate of conversion slightly decrease quarter. We are laser focused on accelerating the implementation of new contracts while being mindful of our customer's limitations and their time constraints.

Chris Fowler: Several enterprise clients expanded their relationship with TruBridge to include coding and additional billing and collecting opportunities, and current CBO clients added service lines, like ambulatory billing, even in instances where they're not running REHR.

Chris Fowler: Importantly, at an increasing rate, our clients are turning to TruBridge as their sole revenue cycle partner, even when they're not yet ready to fully outsource. Last quarter, we spent time discussing the timing of our bookings to revenue conversion. While those larger deals can still take time to implement, we have seen the rate of conversion slightly decrease this quarter. We are laser focused on accelerating the implementation of new contracts while being mindful of our customers' limitations and their time constraints.

Chris Fowler: Importantly, at an increasing rate, our clients are turning to TruBridge as their sole revenue cycle partner, even when they're not yet ready to fully outsource.

Chris Fowler: Last quarter, we spent time discussing the timing of our bookings to revenue conversion.

Chris Fowler: While those larger deals can still take time to implement, we have seen the rate of conversion slightly decrease this quarter. We are laser focused on accelerating the implementation of new contracts while being mindful of our customers' limitations and their time constraints.

Chris Fowler: Much of the work Vinay and his team have done to increase visibility into how and when bookings convert to revenue has been a key piece in managing this figure. At this point in the year, we have over 90% of our projected 2024 revenue under contract, and based on our pipeline, we're optimistic the momentum and bookings will continue into the back half of the year. During the quarter, we also made progress on our offshore initiative and saw early successes from our acquisition of Google. We saw sequential improvement in EBITDA during the quarter and feel confident that Google will achieve the $4.5 million adjusted EBITDA target for the year.

Chris Fowler: Much of the work Vinay and his team have done to increase visibility into how and when bookings convert to revenue has been a key piece in managing this figure. At this point in the year, we have over 90% of our projected 2024 revenue under contract, and based on our pipeline, we're optimistic the momentum in bookings will continue into the back half of the year. During the quarter, we also made progress on our offshoring initiative and saw early successes from our acquisition of... We saw sequential improvement in EBITDA during the quarter and feel confident that Bugle will achieve the $4.5 million adjusted EBITDA target for the year.

Chris Fowler: Much of the work Vinay and his team have done to increase visibility into how and when bookings convert to revenue has been a key piece in managing this figure.

Speaker Change: At this point in the year, we have over 90% of our projected 2024 revenue under contract, and based on our pipeline, we're optimistic the momentum in bookings will continue into the back half of the year.

Chris Fowler: During the quarter, we also made progress on our offshoring initiative and saw early successes from our acquisition of Eugle.

Chris Fowler: We saw sequential improvement in EBITDA during the quarter, and feel confident that Bugle will achieve the $4.5 million adjusted EBITDA target for the year.

Chris Fowler: At the end of Q2, 43% of our CBO and EBO operation is offshore compared to 25% at the end of Q1. During the conversion, we are maintaining overlapping staff to ensure a smooth transformation of service. In addition, we tend to staff new opportunities ahead of the anticipated contracts and expect these savings to ramp over the next few quarters. For these reasons, we remain confident in our long-term margin expansion, but believe that will be muted in the near term. As we stated last year, we did see some hiccups with our offshore partner, which spurred us all into the acquisition of our own captive offshore operation with Google.

Chris Fowler: At the end of Q2, 43% of our CBO and EBO operation was offshore compared to 25% at the end of Q1. During the conversion, we are maintaining overlapping staff to ensure a smooth transformation of service. In addition, we tend to staff new opportunities ahead of the anticipated contracts and expect these savings to ramp over the next few quarters. For these reasons, we remain confident in our long-term margin expansion but believe it will be muted in the near term.

Chris Fowler: At the end of Q2, 43% of our CBO and EBO operation is offshore, compared to 25% at the end of Q1.

Chris Fowler: During the conversion, we are maintaining overlapping staff to ensure a smooth transformation of service.

Chris Fowler: In addition, we tend to staff new opportunities ahead of the anticipated contracts and expect these savings to ramp over the next few quarters. For these reasons, we remain confident in our long-term margin expansion, but believe that will be muted in the near term.

Chris Fowler: As we stated last year, we did see some hiccups with our offshore partner, which spurred us on to the acquisition of our own captive offshore operation with Bugle, but some of last year's challenges with that offshore partner have translated into slightly lower retention this year. To counter this, we're doubling down on our client retention efforts and being more proactive by leveraging Bugle's extensive experience and best-in-class approach to customer management, specifically getting the domestic client management teams and offshore production teams aligned quickly and as smoothly as possible.

Chris Fowler: As we stated last year, we did see some hiccups with our offshore partner, which spurred us on to the acquisition of our own captive offshore operation with Bugle. But some of last year's challenges with that offshore partner has translated into slightly lower retention this year.

Chris Fowler: But some of last year's challenges with that offshore partner has translated into slightly lower retention this year. To counter this, we're doubling down on our client retention efforts and being more proactive by leveraging Google's extensive experience and best-in-class approach to customer management, specifically getting the domestic client management teams and offshore production teams aligned quickly and as smoothly as possible. We look to end the year on stable footing and continue to be optimistic about the delivery of the offshore staff. But they will provide an update on the progress he continues to make on our financial initiatives, but I would be remiss not to mention how pleased I am with the improvements he and his team have made thus far.

Chris Fowler: To counter this, we're doubling down on our client retention efforts and being more proactive by leveraging Bugle's extensive experience and best-in-class approach to customer management.

Chris Fowler: Specifically, getting the domestic client management teams and offshore production teams aligned quickly and as smoothly as possible.

Chris Fowler: We look to end the year on stable footing and continue to be optimistic about the delivery of the offshore. Vinay will provide an update on the progress he continues to make on our financial initiatives, but I would be remiss not to mention how pleased I am with the improvements he and his team have made thus far. Overall, this was a solid first half of our year, and I believe we're delivering sustainable results.

Chris Fowler: We look to end the year on stable footing and continue to be optimistic about the delivery of the offshore staff.

Chris Fowler: Vinay will provide an update on the progress he continues to make on our financial initiatives, but I would be remiss not to mention how pleased I am with the improvements he and his team have made thus far.

Chris Fowler: Overall, this was a solid first half to our year, and I believe we're delivering sustainable results. While our transformation is still underway, we are pleased with the progress we have made in both of our business units. The rural and community market is still our focus, and we will continue to advance our products and services to keep care local.

Chris Fowler: Overall, this was a solid first half to our year, and I believe we're delivering sustainable results. While our transformation is still underway, we are pleased with the progress we have made in both of our business units.

Chris Fowler: While our transformation is still underway, we are pleased with the progress we have made in both of our business years. The rural and community market is still our focus, and we will continue to improve our products and services to keep care local. With that, I'll turn the call over to you.

Chris Fowler: The rural and community market is still our focus, and we will continue to advance our products and services to keep care local. With that, I'll turn the call over to Vinay.

Vinay Bassi: With that, I'll turn the call over to the next. Thank you, Chris, and thank you all for joining us today to discuss our second quarter result. In addition to the strong operational performance that Chris just highlighted, we also made improvements to our financial operations. As Chris mentioned, we are working diligently to enhance our financial quality controls and forecasting. In the second quarter, we saw some early indicators that our efforts are paying off.

Vinay Bassi: Thank you, Chris, and thank you all for joining us today to discuss our second quarter results. In addition to the strong operational performance that Chris just highlighted, we also made improvements to our financial operation. As Chris mentioned, we are working diligently to enhance our financial quality, controls, and forecast. In the second quarter, we saw some early indicators that our efforts are paying off.

Vinay Bassi: Thank you, Chris, and thank you all for joining us today to discuss our second quarter results. In addition to the strong operational performance that Chris just highlighted, we also made improvements to our financial operations.

Vinay Bassi: As Chris mentioned, we are working diligently to enhance our financial quality controls and forecasting.

Chris Fowler: In the second quarter, we saw some early indicators that our efforts are paying off.

Vinay Bassi: One of my first priorities was to improve our cash collection and management. To that end, as I mentioned last quarter, we added additional headcount and implemented a process of daily AR and weekly payables review. Although these are early results, the metrics are moving in the right direction. Accounts receivable is down 7.2 percent sequentially. Days sales outstanding are down approximately six days from Q1. At the same time, accounts payable increase just over 4 million, as we are becoming more regimented, aligning with the terms of the contract.

Vinay Bassi: One of my first priorities was to improve cash collection and management. To that end, as I mentioned last quarter, we added additional headcount and implemented a process of daily receivables and weekly payables. Although these are early results, the metrics are moving in the right direction. Accounts receivable is down 7.2% sequentially, and days sales outstanding are down approximately six days from Q1.

Speaker Change: One of my first priorities was to improve our cash collection and management.

Chris Fowler: To that end, as I mentioned last quarter, we added additional headcount and implemented a process of daily AR and weekly payables review.

Chris Fowler: Although these are early results, the metrics are moving in the right direction.

Chris Fowler: Accounts receivable is down 7.2% sequentially.

Chris Fowler: Days sales outstanding are down approximately six days from Q1. At the same time, accounts payable increased just over $4 million, as we are becoming more regimented, aligning with the terms of the contract.

Vinay Bassi: At the same time, accounts payable increased just over $4 million as we became more regimented, aligning with the terms of the contract. The next priority was getting the business to free cash flow from operations. In the second quarter, we delivered $13.8 million of cash flow from operations, primarily from improved working capital management and improved profit. Looking forward, it is our goal to remain free cash flow positive. On year-to-date, cash flow from operations is $11.7 million compared to $10.2 million in the corresponding six months of 2020.

Vinay Bassi: The next priority was getting the business to free cash flow from operations positive. In the second quarter, we delivered positive 13.8 million of cash flow from operations, primarily from improved working capital management and improved profitability. Looking forward, it is our goal to remain free cash flow positive. On year today, cash flow from operations is 11.7 million compared to 10.2 million in corresponding six months in 2023.

Chris Fowler: The next priority was getting the business to free cash flow from operations positive.

Chris Fowler: In the second quarter, we delivered positive $13.8 million of cash flow from operations, primarily from improved working capital management and improved profitability.

Chris Fowler: Looking forward, it is our goal to remain free cash flow positive.

Chris Fowler: On year to date, cash flow from operations 11.7 million compared to 10.2 million in corresponding 6 months in 2023.

Vinay Bassi: On the P&L, we are focused on identifying efficiencies and an effort to improve profitability. We are on track to deliver the 5 million dollar cost savings mentioned in the last earnings call in the year. The majority of actions have been initiated. We are continuously looking for areas to drive more efficiency in operations. In terms of improving the quality of our reported earnings, the percent of capitalized software in the quarter was 5.2 percent of revenue and down 50 basis points from last quarter. You will also see on our cash flow statement that our investments in software development has come in three million lower in the first two quarters this year compared to 2023.

Vinay Bassi: On the P&L, we are focused on identifying efficiencies in an effort to improve profit. We are on track to deliver the $5 million cost savings mentioned in the last earnings call this evening. The majority of actions have been initiated.

Chris Fowler: On the PNL, we are focused on identifying efficiencies in an effort to improve profitability.

Chris Fowler: We are on track to deliver the $5 million cost savings mentioned in the last earnings call in the year.

Vinay Bassi: We are continuously looking for areas to drive more efficiency in our operations. In terms of improving the quality of our reported earnings, the percent of capitalized software in the quarter was 5.2 percent of revenue, and down 50 basis points from last year. You will also see on our cash flow statement that our investments in software development have come in $3 million lower in the first two quarters this year compared to 2020. We are investing wisely with an ROI focus, and the decline was primarily driven by sunsetting-centric and other low ROI projects.

Chris Fowler: The majority of actions have been initiated. We are continuously looking for areas to drive more efficiency in operations.

Chris Fowler: In terms of improving the quality of our reported earnings, the percent of capitalized software in the quarter was 5.2% of revenue and down 50 basis points from last quarter.

Chris Fowler: You will also see on a cash flow statement that an investment in software that luckment has come in 3 million lower in the first two quarters this year compared to 2020-23.

Vinay Bassi: We are investing wisely with an ROI focus, and decline was primarily driven by some setting centric and other low ROI projects.

Chris Fowler: We are investing wisely with an ROI focus and decline was primarily driven by sunsetting centric and other low ROI projects.

Vinay Bassi: Lastly, looking forward, we are focused on improving our forecasting processes. We have been working to strengthen the partnership between the finance team and each business leader, and we have added a few experienced people to our SPN 18. We are building a monthly cadence of reviewing results, improving on key drivers for revenue and costs to help improve the forecasting process. I want to note that this won't be a quick fix, and I view it as an interactive multi-quarter journey. While all of these truth points are promising, there is still more room for improvement in these areas.

Vinay Bassi: Lastly, looking forward, we are focused on improving our forecasting process. We have been working to strengthen the partnership between the finance team and each business leader, and we have added a few experienced people to our FB&A team. We are building a monthly cadence of reviewing results, and improving on key drivers for revenue and cost to help improve the forecasting process. I want to note that this won't be a quick fix, and I view it as an interactive multi-quarter journey. While all of these proof points are promising, there is still more room for improvement in these areas.

Chris Fowler: Lastly, looking forward, we are focused on improving our forecasting processes.

Chris Fowler: We have been working to strengthen the partnership between the finance team and each business leader, and we have added a few experienced people to our FP&A team.

Chris Fowler: We are building a monthly cadence of reviewing results, improving on key drivers for revenue and costs to help improving the forecasting process.

Chris Fowler: I want to note that this won't be a quick fix and I view it as an interactive multi-quarter journey.

Chris Fowler: While all of these proof points are promising, there is still more room for improvement in these areas.

Vinay Bassi: Yes.

Vinay Bassi: Moving on to our second quarter results, starting from the softest bookings. Total bookings of 23.3 million in the second quarter was approximately 11% higher than last year, mainly from vehicle increases in EHR by slightly offset by RCN. In this quarter, RCN had a bookings of 13.5 million, including vehicle, with about 50% coming from our existing EHR's install base, demonstrating the progress we are making on a cross-selling goal. EHR generated 9.8 million in bookings, with over two-thirds coming from existing customers. We've viewed this as a good sign that the customers are happy with the solutions and are willing to buy more from us.

Vinay Bassi: Moving on to our second quarter results, starting from the top of this book. Total bookings of $23.3 million in the second quarter were approximately 11% higher than last year, mainly from vehicle and increases in EHR, although slightly offset by hours. In this quarter, RCM had bookings of $13.5 million, including Bugle, with about 50% coming from our existing EHR install base, demonstrating the progress we are making on our cross-selling goal. EHR generated 9.8 million in bookings, with over two-thirds coming from existing customers.

Chris Fowler: Moving on to our second quarter results starting from the top bid bookings.

Chris Fowler: Total bookings of 23.3 million in the second quarter was approximately 11% higher than last year, mainly from vehicle and increases in EHR by slightly offset by RCN.

Chris Fowler: In this quarter, RCM had bookings of $13.5 million, including viewable, with about 50% coming from our existing EHR install base, demonstrating the progress we are making on our cross-selling goal.

Chris Fowler: EHR generated $9.8 million in bookings, with over two-thirds coming from existing customers.

Chris Fowler: We view this as a good sign that our customers are happy with the solution and are willing to buy more from us.

Vinay Bassi: Revenue of 84.7 in the quarter was essentially flat compared to last year. The last year, an impact from sunsetting centric by EHR was offset by the positive contributions from vehicle which we acquired in the fourth quarter of last year. RCN revenue of 54.1 million dollars accounted for approximately 64% of total revenue. Vehicle performed in line with expectations. Total gross margin of 48.8% increased 100 basis points year over year. RCN growth margins of 44.1% in the quarter improved approximately 84 basis points compared to the prior year, primarily due to revenue seasonality and vehicle. This margin expansion was partially muted by efforts to seamlessly transition to our global workforce.

Vinay Bassi: We view this as a good sign that our customers are happy with the solutions and are willing to buy more from us. However, revenue of $84.7 million in the quarter was essentially flat compared to last year. The divestiture of AHD in January of this year, an impact from some settings centric by ERN, was offset by the positive contributions from Vehicle, which we acquired in the fourth quarter of last year. RCM revenue of $54.1 million accounted for approximately 64% of total revenue.

Chris Fowler: Revenue of 84.7 in the quarter was essentially flat compared to last year.

Speaker Change: The divestiture of AHP in January of this year, an impact from sunsetting centric by ERN, was offset by the positive contributions from vehicle, which we acquired in the fourth quarter of last year.

Chris Fowler: RCM revenue of $54.1 million accounted for approximately 64% of total revenue. Bugle performed in line with expectations.

Vinay Bassi: We will perform in line with expectations. Total gross margin of 48.8% increased 100 basis points year over, and RCM gross margins of 44.1% in the quarter improved approximately 84 basis points compared to the prior year, primarily due to revenue seasonality and view. This margin expansion was partially muted by efforts to seamlessly transition to our global work.

Chris Fowler: Total gross margin of 48.8% increased 100 basis points year-over-year.

Chris Fowler: RCM gross margins of 44.1% in the quarter improved approximately 84 basis points compared to the prior year, primarily due to revenue seasonality and viewable.

Chris Fowler: This margin expansion was partially muted by efforts to seamlessly transition to our global workforce.

Vinay Bassi: Additionally, EHR gross margins of 57.3% increased 350 basis points year over year, driven by internal cost actions.

Vinay Bassi: Additionally, EHR gross margins of 57.3% increased 350 basis points year-over-year driven by the Internal Cost Act. Moving down the income statement, reported operating expenses represented 52.4% of total revenue in this quarter compared to 50.1% a year ago. While product development, sales, and marketing, and G&A are all down versus the prior year, the increase in operating expense was primarily driven by an accelerated amortization of capitalized software costs associated with our financial management application product in EHR, which was shut down in Q2 as part of cost efficiency efforts.

Chris Fowler: Additionally, EHR gross margins of 57.3% increased 350 basis points year over year driven by internal cost actions.

Vinay Bassi: Moving down the income statement, reported operating expenses represented 52.4% of total revenue in the quarter compared to 50.1% a year ago. While product development, sales and marketing, and GNA are all down versus prior year, the increase in operating expense was primarily driven by an accelerated amortization of capitalized software costs associated with our financial management application product in EHR, which was shut down in Q2 as part of cost efficiency efforts. All of these items led to an adjusted EBITDA of 12.6 million in the quarter, a 12% increase year over year and a 33% increase sequentially. Likewise, adjusted EBITDA margin of 14.8% in the quarter increased 150 basis points year over year and about 350 basis points sequentially.

Chris Fowler: Moving down the income statement, reported operating expenses represented 52.4% of total revenue in this quarter compared to 50.1% a year ago.

Chris Fowler: While product development, sales and marketing, and G&A are all down,

Chris Fowler: The increase in operating expense was primarily driven by an accelerated amortization of capitalized software costs associated with a financial management application product in EHR, which

Chris Fowler: Shut down in Q2 as part of cost efficiency efforts.

Vinay Bassi: All of these items led to an adjusted EBITDA of $12.6 million in the quarter, a 12% increase year-over-year and a 33% increase sequentially. Likewise, the adjusted EBITDA margin of 14.8% in the quarter increased 150 basis points year-over-year and about 350 basis points sequentially. Some of the outperformance in the quarter can be attributed to revenue seasonality and the timing of annual license revenue recognition. In total, when combined, these factors accounted for about $2 million in revenue.

Chris Fowler: All of these items led to an adjusted EBITDA of $12.6 million in a quarter, a 12% increase year over year, and 33% increase sequentially.

Chris Fowler: Likewise, adjusted EBITDA margin of 14.8% in the quarter increased 150 basis points year-over-year and about 350 basis points sequentially.

Vinay Bassi: Some of the outperformance in the quarter can be attributed to revenue seasonality and timing of annual license revenue recognition. Sequentially, when combined, these factors accounted for about 2 million dollars in revenue.

Chris Fowler: Some of the outperformance in the quarter can be attributed to revenue seasonality and timing of annual license revenue recognition. Sequentially, when combined, these factors accounted for about $2 million in revenue.

Vinay Bassi: Turning to the balance sheet, we ended the quarter with 7.7 million of cash and a net debt of 172.3 million.

Vinay Bassi: Turning to the balance sheet, we ended the quarter with $7.7 million in cash and a net debt of $172.3 million. Operating cash flow was a positive $13.8 million in the quarter compared to a positive $0.7 million last year and a loss of $2 million in the first quarter of this year. In the quarter, we also paid an incremental $4 million of principal on our debt, bringing our first half repayment to $17 million. We reiterate our goal of getting it down to a range of 2.5 to 3 times, mainly from improving adjusted EBITDA and potential debt repayment.

Speaker Change: Turning to the Balencian.

Speaker Change: We ended the quarter with $7.7 million of cash and a net debt of $172.3 million.

Vinay Bassi: of India. Operating cash flow was a positive $13.8 million in the quarter compared to a positive $0.7 million last year and a loss of $2 million in the first quarter of this year. In the quarter, we also paid an incremental $4 million of principle on our debt, bringing our first half repayment to $17 million. We reattraid our goal of getting it down to a range of $2.5 to 3 times, mainly from improving adjusted EBITDA and potential debt repayments.

Speaker Change: Operating cash flow was a positive $13.8 million in the quarter compared to a positive $0.7 million last year and a loss of $2 million in the first quarter of this year.

Speaker Change: In the quarter, we also paid an incremental $4 million of principal on our debt, bringing our first half repayment to $17 million.

Chris Fowler: We reiterate our goal of getting it down to a range of 2.5 to 3 times, mainly from improving adjusted EBITDA and potential debt repayments.

Vinay Bassi: My final topic is guidance. We are providing an outlook for the third quarter and maintaining our full year ranges. For the third quarter, we expect revenue between $82 and $85 million and adjusted EBITDA between $11.5 million to $13.5 million. I'd like to highlight that the third quarter that adjusted EBITDA benefits from the additional cost savings and lower than expected annual conference costs mentioned in the last earnings call, offsets from some revenue seasonality and timing of license revenue recognition mentioned earlier. For the full year, we are re-iterating our ranges and expect revenue to be between $3.30 million to $3.40 million and adjusted EBITDA to be between $45 million and $50 million.

Vinay Bassi: We are providing our outlook for the third quarter and maintaining our full year range. For the third quarter, we expect revenue between $82 and $85 million and adjusted EBITDA between $11.5 million and $13.5 million. I'd like to highlight that the third quarter adjusted EBITDA benefits from the additional cost savings and lower than expected annual conference costs mentioned in the last earnings call, offset by some revenue seasonality and timing of license revenue recognition mentioned earlier.

Chris Fowler: My final topic is guidance.

Chris Fowler: We are providing our outlook for the third quarter and maintaining our full year ranges.

Chris Fowler: For the third quarter, we expect revenue between $82 million and $85 million, and adjusted EBITDA between $11.5 million to $13.5 million.

Chris Fowler: I'd like to highlight that the third order adjusted EBITDA benefits from the additional cost savings and lower than expected annual conference cost mention in the last earnings call. Offset from some revenue seasonality and timing of license revenue recognition mentioned earlier.

Chris Fowler: For the full year, we are reiterating our ranges and expect revenue to be between $330 million to $340 million and adjusted EBITDA to be between $45 million and $50 million.

Vinay Bassi: For the full year, we are reiterating our ranges and expectations, with revenue between $330 million and $340 million and adjusted EBITDA between $45 million and $50 million. In conclusion, I'm pleased with our second quarter results and the progress we have made in the first half of this year, enhancing and improving our financial activity. Based on our recent results, the improving quality of our financials, and our pipeline, I feel increasingly confident that we have a clear line of sight to achieve our 2024 target and return to growth in the coming years. With that, we'll open it up to questions.

Vinay Bassi: In conclusion, I'm pleased with our second quarter results and the progress we have made in the first half of this year, enhancing and improving our financial acumen. Based on the recent results, the improving quality of our financials and our pipeline, I feel increasingly confident that we have a clear line of size to achieve our 2024 targets and return to growth in the out years.

Chris Fowler: In conclusion, I am pleased with our second quarter results and the progress we have made in the first half of this year, enhancing and improving our financial acumen.

Chris Fowler: Based on the recent results, the improving quality of our financials and our pipeline, I feel increasingly confident that we have a clear line of sight to achieve our 2024 target and return to growth in the out years. With that, we'll open to questions.

Mark: With that, we'll open the question. We will now begin the question and answer session. If you have dialed in, would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue.

Operator: We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. Thank you. Your first question comes from the line of Sarah James with Cantor Fitzgerald. Sarah, your line is now open.

Speaker Change: We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. Thank you.

Mark: If you would like to withdraw your questions, press star one again. Thank you.

Sarah James: Your first question comes from the line of Sarah James with Counter-Physierald. Sarah, her line is now open. Thank you, and congrats on a great quarter. It's nice to see the balance sheet improve on so many metrics.

Speaker Change: Your first question comes from the line of Sarah James with Cantor Fitzgerald. Sarah, your line is now open.

Sarah James: Thank you and congratulations on a great quarter. It's nice to see the balance sheet improve on so many metrics. Can you talk a little bit about margin progression? So if we look at the 3Q guide and the implied 4Q, it looks like your EBITDA margin's ticking up at about 20 to 40 basis points a quarter. Is that a fair pace of how we can think of improvement going forward, or are there certain initiatives that could make it more lumpy as the company progresses towards its long-term guidance?

Sarah James: Thank you and congrats on a great quarter. It's nice to see the balance sheet improve on so many metrics.

Chris Fowler: Can you talk a little bit about margin progression? So if we look at the 3Q guide and the implied 4Q, it looks like your EBITDA margins taking up at about 20 to 40 basis points a quarter. Is that a fair pacing of how we can think of improvement going forward? Or are there certain initiatives that could make it more lumpy as the company progresses towards their long-term guidance?

Speaker Change: Can you talk a little bit about margin progression? So if we look at the 3Q guide and the implied 4Q,

Speaker Change: It looks like...

Speaker Change: your EBITDA margins ticking up at about 20 to 40 basis points a quarter. Is that a fair pacing of how we can think of improvement going forward, or are there certain initiatives that could make it more lumpy as the company progresses towards their long-term guidance?

Chris Fowler: Yeah, Sarah, this is Chris. I'll start and let Vinay kind of fill in behind me. I think the big thing for us right now, and I called this out in my comments, is how we're thinking about the conversion to our offshore staff for our CBO operations and making sure that we are being very intentional to protect the service and keep our retention levels at or above where they need to be.

Chris Fowler: Yeah, Sarah, this is Chris. I'll start and let Venet kind of fill in behind me. I think the big thing for us right now, and I called this out in my comments, was how we're thinking about the conversion to our offshore staff for our CBO operations and making sure that we are being very intentional to protect the service and keep our retention levels at or above where they need to be. And so this year may see a little bit of a muted margin gain based on where we expect things to go forward. And with that, while we're pleased with what we're seeing, we still want to make sure that we're giving ourselves a little bit of grace to be able to get through the year to make sure that, again, customers are satisfied with this big step in our change and the way that we're delivering the service before we really kind of push the gas pedal on that.

Speaker Change: Yeah, hey Sarah, this is Chris. I'll start and let Vinay kind of fill in behind me. I think the big thing for us right now, and I called this out in my comments was...

Speaker Change: how we're thinking about the conversion to our offshore staff for our CBO operations and making sure that we are being

Speaker Change: very intentional to protect the service.

Chris Fowler: And so, you know, this year may see a little bit of a muted margin gain based on where we expect things to go forward. And, you know, with that, while we're pleased with what we're seeing, we still want to make sure that we're giving ourselves a little bit of grace to be able to get through the year to make sure that, again, customers are satisfied with this big step in our change in the way that we're delivering the service before we really kind of push the gas pedal on that.

Vinay Bassi: and keep our retention levels at or above where they need to be. And so, you know, this year may see a little bit of a muted margin gain.

Speaker Change: based on where we expect things to go forward. And with that, while we're pleased with what we're seeing, we still want to make sure that we're giving ourselves a little bit of grace to be able to get through the year to make sure that, again, customers are satisfied with this big step in our change and the way that we're delivering the service before we really kind of push the gas pedal on that.

Vinay Bassi: So I would say, I would give us probably the next quarter or so to really kind of get a good sense of, as we see that continue to accelerate, what that's going to be. But again, along with that and Venet can jump in here as well, there are the continued savings initiatives that we continue to see really paying off and making sure that we are intentional about every dollar that we spend and making sure that it's going to the betterment of our customers or the betterment of our employees. Yeah, and I would add, echo that, and that's a great question.

Chris Fowler: So, I would say, you know, I would give us probably the next quarter or so to really kind of get a good sense of, as we see that continue to accelerate, what that's going to be. But again, you know, along with that, and Vinay can jump in here as well, there are the continued savings initiatives that we continue to see really paying off and making sure that we are intentional about every dollar that we spend and make sure that it's going to the betterment of our customers or the betterment of our employees. Yeah, And I would add, echo that, Sal, and that's a great question.

Speaker Change: So I would say, you know, I would give us probably the next month, the next quarter or so to really kind of get a good sense of

Speaker Change: As we see that it continue to accelerate, what that's going to be. But again, you know...

Speaker Change: along with that and Vinay can jump in here as well. There are the continued savings initiatives that we continue to see really paying off and making sure that we are intentional about every dollar that we spend and making sure that it's going to the betterment of our customers and the betterment of our employees.

Vinay Bassi: and I would add echo that and that's a great question.

Vinay Bassi: Especially, as I mentioned, there was some seasonality and timing between Q2 and Q3, but by Q4, we expect margin to improve a little bit more with incremental revenues, which takes the benefit of last two, three quarters that has been great for us. But longer term, as Chris mentioned, once I have a few more quarters, understand the full drivers, and have the process a little more, I do expect our margins to continue improving because that's our goal. So, and it's a very simple way for me, a very laser-focused, tighter control on cost and giving all the support needed to generate the white space as well as our home turf of rural health care to get increased bookings.

Vinay Bassi: Especially, as I mentioned, there was some seasonality and timing between Q2 and Q3. But by Q4, we expect margins to improve a little bit more with incremental revenues, which takes the benefit of the last two, and three quarters that have been great for us. But longer term, as Chris mentioned, once I have a few more quarters, understand the full drivers, and have the process a little more, I do expect our margins to continue improving because that's our goal.

Vinay Bassi: Especially, as I mentioned, there was some seasonality and timing between Q3 and Q2 and Q3, but by Q4, we expect margin to improve a little bit more with incremental revenues, it takes the benefit of last two three quarters that has been great for us. But longer term as this mentioned, once I have a few more quarters, I understand the full drivers and have the process a little more.

Vinay Bassi: I do expect our margins to continue improving because that's our goal and it's a very simple way for me, a very laser-focused tighter control on cast.

Vinay Bassi: And it's a very simple way for me, a very laser-focused, tighter control on cost, and giving all the support needed to generate the white space as well as our home turf in rural health care to get increased bookings. So, that benefit should start falling. So, my goal will be to once again, like Chris said, have this quarter, one more quarter behind us, and start seeing the regular improvement in margins. And I'll end with this, with that, Sarah. We have said in previous quarters our expectation or desire to be back at a 20% plus margin from an EBITDA perspective. And I still think that that is well within striking distance and, hopefully, a waypoint, not a destination.

Speaker Change: and giving all the support needed to generate the white space as well as our home turf in rural health care to get increased bookings.

Chris Fowler: So that benefit should start falling in. So my goal will be to, once like Chris said, have this quarter, one more quarter behind us and start seeing the regular improvement in margins. And I'll end with this, with that, Sarah. You know, we have said in quarters past our expectation or desire to be back at a 20% plus margin from an EBITDA perspective. And I still think that that is well within striking distance and hopefully a way point down the distance.

Speaker Change: So, that benefit should start falling in. So, my goal will be to once, like Chris said, have this quarter, one more quarter behind us.

Speaker Change: and start seeing the regular improvement in margins. And I'll end with this with that, Sarah. You know, we have said in quarters past

Speaker Change: are an expectation or desire to be back at a 20% plus margin from an EBITDA perspective and I still think that that is well within striking distance and hopefully a waypoint to have a destination.

Sarah James: Foundation. That's great.

Sarah James: That's great. And I would like one more if I could.

Chris Fowler: And one more if I could. So we're starting to see a little bit of relief on hospital margins, and some of your peers have started talking about how that flows into sales pipeline. Could you give us an update on the financial health of your customer base and how that translates into demand for product expansion next year? Yeah, you know, I would say our customer base is still a bit of a mixed bag, but has really felt the benefit, you know, still kind of carried over from some of the COVID relief over the last several years and have given them the opportunity to really to store some cash on hand.

Sarah James: That's great. And one more, if I could...

Operator: Thank you for standing by.

Speaker Change: So we're starting to see a little bit of relief on hospital margins and some of your peers have started talking about how that flows into their sales pipeline. Could you give us an update on the financial health of your customer base and how that translates into demand for product expansion next year?

Mark: My name is Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to TruBridge Theatre Ernie's conference call. All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question and answer session. If you would like to ask a question during this time, Center for a Star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.

Operator: Yeah, you know, I would say our customer base is still a bit of a mixed bag but has really felt the benefit, still kind of carried over from some of the COVID relief over the last several years and given them the opportunity to really store some cash on hand. I think for us because the vast majority of our customers, especially on the EHR side, really have the full suite of products that we have delivered, whether that be through interest as they're going forward or through the past with meaningful use. And so what they're focused on right now is continued efficiency and operations. And I think that's where we're continuing to see demand on the services side, as much as we are from a product standpoint.

Chris Fowler: So we're starting to see a little bit of relief in hospital margins, and some of your peers have started talking about how that flows into the sales pipeline. Could you give us an update on the financial health of your customer base and how that translates into demand for product expansion next year? Yeah, you know, I would say.

Speaker Change: Yeah, you know, I would say our customer base is still a bit of a mixed bag, but, you know, has...

Dru Anderson: I would now like to turn the call over to Tru Anderson. True, please go ahead. Thank you.

Dru Anderson: Good afternoon, and welcome to the TruBridge Second Quarter 2024 Ernie's conference call. Leading today's call are Chris Fowler, President and Chief Executive Officer, and Vinay Bassi, Chief Financial Officer. This call may include statements regarding future operating plans, expectations, and performance that constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Security's litigation reform act of 1995. The company cautioned you that any such forward-looking statements only reflect management expectations and predictions based upon currently available information and are not guarantees a future result or performance.

Speaker Change: has really felt the benefit, you know, still kind of carried over from some of the COVID relief over the last several years and have given them the opportunity to really

Chris Fowler: I think for us, you know, because the vast majority of our customers, especially on the EHR side, really have the full suite of products that we have delivered. Whether that be through interest as they're going forward or through the past with meaningful use. And so what they're focused on right now is continued efficiency and operations. And I think that's where we're continuing to see the demand on the services side as much as we are from a product perspective.

Speaker Change: to store some cash on hand.

Speaker Change: I think for us, you know, because the vast majority of our customers, especially on the EHR side, really have the full suite of products that we have delivered, whether that be through interest as they're going forward or through the past with meaningful use.

Dru Anderson: Actual results might differ materially from those expressed or implied by such forward-looking statements as a result of known and unknown risks, uncertainties, and other factors, including those described in public releases and reports filed with the Securities and Exchange Commission, including but not limited to the most recent annual report on Form 10K.

Dru Anderson: The company also cautioned investors that the forward-looking information provided in this call represents their outlook only as of this date, and they undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this call.

Speaker Change: And so what they're focused on right now is continued efficiency and operations, and I think that's where we're continuing to see the demand on the services side as much as we are from a product perspective.

Mark: Thank you.

Mark: Thanks, Sarah.

Speaker Change: Thank you.

Jeff Garrow: Your next question comes from the line of Jeff Garrow with Stephen Jeff. Your line is now open. Yeah, good afternoon. Thanks for taking the questions and looking at the bookings results year-to-date. We see momentum for both segments of the business. So one of the asks is you look out on the pipeline for the second half, whether you see the expectations for continued momentum by us towards one segment or the other in the back half of the year.

Jeff Garro: Your next question comes from the line of Jeff Garro with Stevens. Jeff, your line is now open.

Sarah James: Thanks, Sarah.

Speaker Change: Your next question, come from the line of Jeff Garrow with Stephens Jeff, your line is now open.

Chris Fowler: Yeah, good afternoon. Thanks for taking the questions. And looking at the bookings results year to date, we see momentum for both segments of the business. So I wanted to ask, as you look out in the pipeline for the second half, whether you see the expectations for continued momentum bias towards one segment or the other in the back half of the year?

Jeff Garrow: Yeah, good afternoon. Thanks for taking the questions.

Speaker Change: and looking at the bookings results here today, we see momentum for both segments of the business. So, wanted to ask, as you look out on the pipeline for the second half, whether you see the the expectations for continued momentum bias towards one segment or the other in the back half of the year.

Chris Fowler: Hey Jeff, thanks for the question. It's a great one and something we obviously pay a lot of attention to. If you go back to the end of last year, the first of this year, maybe even before that, and we talked about the RCM side of the house really being where we saw the opportunity for growth, but to your point, we're seeing a bit of a renaissance in the EHR opportunities. I think it might be a little early for us to say that we think that that's a trend, but we are seeing opportunities, especially when we think about the interest, the ability to couple the EHR with the RCM service, and that being a differentiator that there are still some vendors out there that we feel like are primed for replacement on the EHR side.

Chris Fowler: Hey, Jeff. Thanks for the question. It's a great one, and something we obviously pay a lot of attention to. And if you go back to the end of last year, first of this year, maybe before that. And we talked about, you know, the RCM's out of the house really being where we saw the opportunity for growth, but to your point, you know, we're seeing a bit of a renaissance in the EHR opportunities. I think it's, I think it might be a little early for us to say that we think that that's a trend. But we are seeing where there is opportunity, especially when we think about the interest, the ability to couple the EHR with the RCM service.

Sarah James: Hey Jeff, thanks for the question. It's a great one and something we, you know, obviously pay a lot of attention to, and if you go back to the end of last year, first of this year, maybe even before that, and we talked about, you know, the RCM side of the house really being

Chris Fowler: At this time, I will turn the call over to Mr. Chris Fowler, President and Chief Executive Officer. Please go ahead, sir. Thank you, Drew, and thank you to everyone for joining us today. I'm pleased to report that our second-quarter saw continued bookings momentum, strong revenue performance, EBIT dot margin expansion, dramatic improvement cash flow from operations. Our total bookings for the quarter came in at 23.3 million, marking the third straight quarter over $20 million.

Sarah James: where we saw the opportunity for growth, but to your point, you know, we're seeing a bit of a renaissance in the EHR opportunities.

Speaker Change: I think it might be a little early for us to say that we think that that's a trend.

Sarah James: But we are seeing where there is opportunity, especially when we think about the interest.

Chris Fowler: At the first of the year, we said that we were cautiously optimistic about ourselves for a momentum, and that continues to be the case. We have also talked about the two-step process for selling our RCM services, the first being educating the client about the virtues of outsourcing, and secondly, selling true bridge as the vendor. While still a bit anecdotal, we are seeing promising signs that the market is becoming more educated on outsourcing, thus allowing us to focus more on simply selling true bridge as their future partner.

Chris Fowler: And that being a differentiator that, you know, there's still some disparate are not the spirit. There's still some vendors out there that we feel like are prime for replacement on the EHR side. We continue to enhance the experience for our customers there and invest, as they said, or being smarter about how we're spending those dollars to make sure that our customers are really getting the outsize return for that. And I think it's leading to some promising opportunities for us there. But, you know, going forward, you know, I'd love to see both sides continue to compete for who's going to be the leader every quarter.

Speaker Change: the ability to couple the EHR with the RCM service.

Speaker Change: and that being a differentiator that, you know, there's still some disparate or not disparate. There's still some vendors out there that we feel like are prime for replacement on the EHR side.

Chris Fowler: We continue to enhance the experience for our customers there and invest. As Vinay said, we're being smarter about how we're spending those dollars to make sure that our customers are really getting the outsized return for that, and I think it's leading to some promising opportunities for us there. But going forward, I'd love to see both sides continue to compete for who's going to be the leader every quarter because I think that's just a good thing for us.

Speaker Change: We continue to enhance the experience for our customers there and Vest has been a said We're being smarter about how we're spending those dollars to make sure that our customers are really getting the outsized return.

Chris Fowler: Looking deeper at our bookings, our integrated interest solution is resonating in the market. In the first half of the year, we saw a 60% increase in the number of new interest clients compared to the first half of 2023. Our fully integrated solution is better for our clients as the shared risk fast model eliminates the need to budget for new products, price increases, or ongoing maintenance payments, and it has benefited the true bridge as those clients represent a higher lifetime value for us and tend to be stickier over time.

Speaker Change: for that, and I think it's leading to some promising opportunities for us there.

Speaker Change: But, you know, going forward, you know, I'd love to see both sides continue to compete for who's going to be the leader every quarter, because I think that's just a good thing for us. I do think that the world of opportunity is much bigger on the RCM side. So I think for us, it's about how we think about that continuing to expand while we're continuing to see the EHR come along nicely.

Chris Fowler: Because I think that's just a good thing for us. I do think that the world of opportunity is much bigger on the RCM side. So I think for us it's about how we think about that continuing to expand while we're continuing to see the EHR come all nice.

Chris Fowler: I do think that the world of opportunity is much bigger on the RCM side, so I think for us, it's about how we think about that continuing to expand while we're continuing to see the EHR come along nicely.

Chris Fowler: Jackson, great to hear.

Chris Fowler: Excellent. Great to hear. Maybe we'll follow up a little bit on the momentum for Entrust. Just curious if there's any particular driver you would call out there, whether it's recent regulatory rules being put out in the public domain, or you alluded a little bit to a competitive dynamic, and then also whether there's any kind of tailwind from, call it the final leg of trying to convert your own legacy EHR platforms to your more modern platforms.

Chris Fowler: Maybe if I'll put a little bit on the momentum for interest.

Speaker Change: Excellent, great to hear. Maybe to follow up a little bit on the momentum for Entrust, just curious if there's any...

Chris Fowler: Just curious if there's any particular driver you would call out there, whether it's recent regulatory rules being put out in the public domain, or you alluded a little bit to a competitive dynamic, and then also whether there's any kind of tailwind from the final leg of trying to convert your own legacy EHR platforms to your more modern platform. Yeah, I think there's a little bit of everything in there. I think if you look at our existing customer base, so our customers are already on the EHR. I think the first thing is they have to believe that we're going to continue to be the right partner for them on the EHR.

Chris Fowler: Our cross-selling efforts are bearing fruit with $7 million signed in the quarter. Several enterprise clients expanded their relationship with TruBridge to include coding and additional billing and collecting opportunities and current CBO clients added service funds like ambulatory billing, even in instances where they're not running our EHR. Importantly, at an increasing rate, our clients are turning to TruBridge as their sole revenue cycle partner even when they're not yet ready to fully outsource.

Speaker Change: particular driver you would call out there, whether it's, you know, recent regulatory rules being put out in the public domain or, you know, you alluded a little bit to a competitive dynamic, and then also whether there's any kind of

Speaker Change: Tailwind from the final leg of trying to convert your own Legacy EHR platforms to your more modern platform.

Chris Fowler: Yeah, I think there's a little bit of everything in there. I think if you look at our existing customer base, so our customers that are already on the EHR, I think the first thing is that they have to believe that we're going to continue to be the right partner for them on the EHR. So it's super important for them to see the value in that, which really allows us to have a good seat at the table from an RCM standpoint, even though they could look at us standalone if they were leaving us to go to another vendor. I do think that when they're, you know, at one... However we want to look at it, we're all TruBridge, right?

Speaker Change: Yeah, I think there's a little bit of everything in there. You know, I think if you look at our...

Chris Fowler: Last quarter, we spent time discussing the timing of our bookies to revenue conversion. While those larger deals can still take time to implement, we have seen the rate of conversion slightly decreases quarter. We are laser focused on accelerating the implementation of new contracts while being mindful of our customer's limitations and their time constraints. Much of the work Vinay and his team have done to increase visibility into how and when bookings convert to revenue has been a key piece in managing this figure.

Speaker Change: existing customer base, so our customers that are already on the EHR.

Speaker Change: I think the first thing is, is they have to believe.

Chris Fowler: So it's super important for them to see the value in that, which really allows us to have a good seat at the table from an RCM standpoint. Even though they could look at us stand alone if they were leaving us to go to another vendor, I do think that whenever we want to look at it, we're all TruBridge, right? And so I think for that cohort that crossed out opportunity, then them seeing the value in the EHR is super important, and so our investment in delivery there is top of the house. When we're thinking about the net new market, so a replacement more than likely, I do think it is a differentiating value that we are the long wolf out there that can provide both the EHR and the RCM service together.

Speaker Change: that we're going to continue to be the right partner for them on the EHR. So it's super important for them to see the value in that, which really allows us to have a...

Speaker Change: A good seat at the table from an RCM standpoint, even though they could look at us stand alone if they were leaving us to go to another vendor. I do think that when they're at one...

Chris Fowler: At this point in the year, we have over 90% of our projected 2024 revenue under contract and based on our pipeline, we're optimistic the momentum and bookings will continue into the back half of the year. During the quarter, we also made progress on our offshore initiative and saw early successes from our acquisition of Google. We saw sequential improvement in EBITDA during the quarter and feel confident that Google will achieve the $4.5 million adjusted EBITDA target for the year.

Chris Fowler: And so I think for that cohort, that cross-sell opportunity, and them seeing the value in the EHR is super important. And so our investment and delivery there is top of the house. When we're thinking about the net new market, so a replacement more than likely, I do think it is a differentiating value that we are the lone wolf out there that can provide both the EHR and the RCM service together. And I think the fact that it's all contingent, so their EHR is no longer a flat fee or a licensed purchase; it's based on the utilization at their hospital, it's based on our performance from a collection standpoint.

Speaker Change: However, we want to look at it, we're all TruBridge, right? And so I think for that cohort, that cross-sell opportunity.

Speaker Change: Then seeing the value in the EHR is super important and so our investment in delivery there is top of the house.

Speaker Change: When we're thinking about the net new market, so a replacement more than likely.

Speaker Change: You know, I do think it is a differentiating value that we are the, you know, the lone wolf out there that can provide both the EHR and the RCM service together. And I think the fact that it's all at a contingent based on, you know, so their EHR is no longer a flat fee or a licensed purchase. It's based on the utilization at their hospital. It's based on our performance from a collection standpoint. So, our initiatives are aligned as well as they can possibly be and that our definitions of success match up. So, I think, you know, those are really the two biggest things that we're seeing, you know, we're seeing that momentum on the EHR side with the continued investment in the product.

Chris Fowler: At the end of Q2, 43% of our CBO and EBO operation is offshore compared to 25% at the end of Q1. During the conversion, we are maintaining overlapping staff to ensure a smooth transformation of service. In addition, we tend to staff new opportunities ahead of the anticipated contracts and expect these savings to ramp over the next few quarters. For these reasons, we remain confident in our long-term margin expansion, but believe that will be muted in the near term.

Chris Fowler: And I think the fact that it's all at a contingent based on, so their EHR is no longer a flat fee or a license purchase, it's based on the utilization of their hospital; it's based on our performance from a collection standpoint. So our initiatives are aligned as well as they can possibly be, and that our definitions of success match up. So I think those are really the two biggest things that we're seeing. We're seeing that momentum on the EHR side with the continued investment in the product. We're seeing the ability to sell the two together to really kind of drive that opportunity for interest going forward.

Chris Fowler: So our initiatives are aligned as well as they can possibly be, and our definitions of success match up. So I think those are really the two biggest things that we're seeing. We're seeing that momentum on the EHR side with the continued investment in the product. And we're seeing the ability to sell the two together to really kind of drive that opportunity for interest.

Chris Fowler: As we stated last year, we did see some hiccups with our offshore partner, which spurred us all into the acquisition of our own captive offshore operation with Google. But some of last year's challenges with that offshore partner has translated into slightly lower retention this year. To counter this, we're doubling down on our client retention efforts and being more proactive by leveraging Google's extensive experience and best-in-class approach to customer management, specifically getting the domestic client management teams and offshore production teams aligned quickly and as smoothly as possible.

Speaker Change: We're seeing the ability to sell the two together to really kind of drive that opportunity for interest going forward.

Chris Fowler: Excellent, I appreciate those comments.

Chris Fowler: Excellent! I appreciate those comments. And last one for me, I do want to make sure to hit the demand side a little bit more on RCM. Last quarter, you told a nice story of the combination with Bugle being cited by one of the prospects that you were dialoguing with. So I'm curious whether that combination specifically, or maybe your efforts on automation more generally, are not just a margin driver but are also helping fuel the pipeline for future demand on the RCM side.

Chris Fowler: And last one for me, do I make sure to hit the demand side a little bit more on RCM. You told a nice story of the combination with Google being cited by one of the prospects that you're dialoguing with. So I'm curious whether that combination specifically or maybe your efforts on automation more generally are not just a margin driver, but are also helping fuel the pipeline for future demand on the RCM side. There's no doubt that our ability to deliver the service at a lower price point is absolutely getting us into more opportunities and also giving us a better right to win.

Speaker Change: Excellent. I appreciate those comments. And last one from me, do want to make sure to hit the...

Speaker Change: Demand side a little bit more on RCM. Last quarter you told a nice story of

Speaker Change: The combination with Bugle being cited by one of the prospects that you were dialoguing with. So I'm curious whether...

Speaker Change: That combination specifically, or maybe your efforts on automation more generally, are not just a margin driver, but are also helping fuel the pipeline for future demand on the RCM side.

Chris Fowler: We look to end the year on stable footing and continue to be optimistic about the delivery of the offshore staff. But they will provide an update on the progress he continues to make on our financial initiatives, but I would be remiss not to mention how pleased I am with the improvements he and his team have made thus far. Overall, this was a solid first half to our year and I believe we're delivering sustainable results.

Chris Fowler: There's no doubt that our ability to deliver the service at a lower price point is absolutely getting us into more opportunities and also giving us a better right to win. We're just short of a 20% increase in our winning percentage year over year, and I think that's directly attributable to our ability to be, you know, while not every deal that we're in is competitive, when they are competitive, it helps for us to be able to be at or better than the competition from a price standpoint, knowing that our delivery is going to be there.

Speaker Change: There's no doubt that our ability to deliver the service at a lower price point.

Speaker Change: absolutely getting us into more opportunities and also giving us a better right to win.

Chris Fowler: We're just short of a 20% increase on our winning percentage year after year. And I think that's directly attributable to our ability to be, you know, while not every deal that we're in is competitive, when they are competitive, you know, it helps for us to be at or better than the competition from a price standpoint, knowing that our delivery is going to be there. So, yeah, I still continue to be very optimistic about what that means for us going forward. I think, you know, we talked about in the past, we're just scratching the surface still on the automation and how that shows up and translates into margin expansion.

Speaker Change: We're just short of a 20% increase on our winning percentage year over year, and I think that's directly attributable to our ability to be, you know, while not every deal that we're in is competitive, when they are competitive, you know, it helps for us to be able to be at or better than the competition from a price standpoint, knowing that our delivery is going to be there. So, yeah, I still continue to be very optimistic about, you know, what that means for us going forward. I think, you know, we talked about in the past, we're just scratching the surface still on the automation and how that shows up and translates into.

Chris Fowler: While our transformation is still underway, we are pleased with the progress we have made in both of our business units. The rural and community market is still our focus and we will continue to advance our products and services to keep care local.

Vinay Bassi: With that, I'll turn the call over to the next. Thank you Chris and thank you all for joining us today to discuss our second quarter result. In addition to the strong operational performance that Chris just highlighted, we also made improvements to our financial operations. As Chris mentioned, we are working diligently to enhance our financial quality controls and forecasting. In the second quarter, we saw some early indicators that are efforts are paying off.

Chris Fowler: So, yeah, I still continue to be very optimistic about what that means for us going forward. I think, as we talked about in the past, we're just scratching the surface on automation and how that shows up and translates into margin expansion. I think the fact that we're delivering quality analytics and insights to our customers today gives them confidence that we're going to be able to actually execute on meaningful leverage of artificial intelligence.

Chris Fowler: I think the fact that we're delivering quality analytics and insights to our customers today gives them belief that we're going to be able to actually execute on meaningful leverage of the artificial intelligence.

Speaker Change: Margin Expansion. I think that the fact that we're delivering quality analytics and insights to our customers today gives them belief that that we're going to be able to actually execute on meaningful leverage of the of the artificial intelligence.

Vinay Bassi: One of my first priorities was to improve our cash collection and management. To that end, as I mentioned last quarter, we added additional headcount and implemented a process of daily AR and weekly payables review. Although these are early results, the metrics are moving in the right direction. Accounts receivable is down 7.2 percent sequentially. Days sales outstanding are down approximately six days from Q1. At the same time, accounts payable increase just over 4 million, as we are becoming more regimented, aligning with the terms of the contract.

Chris Fowler: Thank you.

Jeff Garro: Excellent. Great to hear that data point on the win rate. Thanks again for taking the questions.

Chris Fowler: Great to hear that data point on the win rate.

Chris Fowler: Thanks again for taking the questions.

Speaker Change: Great to hear that data point on the wind rate. Thanks again for taking the questions.

Mark: You bet.

Mark: Thanks, Joe.

Stephanie Davis: Your next question comes from DeLine of Stephanie Davis with Barclays.

Operator: Your next question comes from the line of Stephanie Davis with Barclays. Stephanie, your line is now open. Hey guys.

Jeff Garrow: You bet. Thanks, Jeff.

Stephanie Davis: Stephanie, your line is now open. Hey guys, thanks for taking my question. Congrats on the quarter. So first off, I was hoping you can tell us about some broader trends. We've seen a lot of movement in the revenue cycle space across the past few months with my POs and takeouts, but I get you have a little bit of a different competitive backdrop. So could you give us a refresh or seeing anything different or any changes on the backdrop and how it could be impacting us forward.

Speaker Change: Your next question comes from the line of Stephanie Davis with Barclays. Stephanie, your line is now open.

Stephanie Davis: Hey guys, thanks for taking my question. Congratulations on the quarter. So first off, I was hoping you could tell us about some broader trends. We've seen a lot of movement in the revenue cycle space over the past few months with some IPOs, some takeouts, but I understand you have a little bit of a different competitive backdrop. So could you give us a refresher if you're seeing anything different or any changes in the backdrop, and how that could be impacting you going forward?

Stephanie Davis: Hey guys, thanks for taking my question. Congrats on the quarter.

Stephanie Davis: So first off, I was hoping you can tell us about some broader trends. We've seen a lot of movement in the revenue cycle space.

Speaker Change: across the past few months with my POs and takeouts, but I get you have a little bit of a different competitive backdrop. So could you give us a refresh, you're seeing anything different or any changes on the backdrop and how it could be impacting us forward?

Vinay Bassi: The next priority was getting the business to free cash flow from operations positive. In the second quarter, we delivered positive 13.8 million of cash flow from operations, primarily from improved working capital management and improved profitability. Looking forward, it is our goal to remain free cash flow positive. On year today, cash flow from operations is 11.7 million compared to 10.2 million in corresponding six months in 2023. On the P&L, we are focused on identifying efficiencies and an effort to improve profitability.

Chris Fowler: Thanks for joining. Thanks for the nice comments.

Chris Fowler: Thanks for joining us. Thanks for the nice comments.

Chris Fowler: I would say, and again, said this in the remarks, you know what we're seeing is the market continuing to come closer to us, meaning that we're not having to knock the door down, for lack of a better term, when it relates to explaining why our hospitals need to be evaluating the outsourced model. You know, we do have a different market. We are our customers are the, if they're not the number one, they're in the top three employers in the community that they serve. And so there are some dynamics from an employee's headcount standpoint and economic development in the community, which has traditionally been a barrier for us.

Speaker Change: Thanks for joining. Thanks for the nice comments.

Chris Fowler: I would say, and I again said this in the remarks, what we're seeing is the market continuing to come closer to us, meaning that we don't have to knock on the door, for lack of a better term, when it relates to explaining why our hospitals need to be evaluating the outsource model. You know, we do have a different market. We are, our customers are the, if they're not number one, they're in the top three employers in the community that they serve.

Speaker Change: I would say, and again, said this in the remarks.

Speaker Change: You know, what we're seeing is the market continuing to come closer to us, meaning that

Speaker Change: We're not having to...

Speaker Change: knocked the door down, for lack of a better term.

Speaker Change: when it relates to explaining why our hospitals need to be evaluating.

Speaker Change: the outsourced model.

Speaker Change: You know, we do have a different market. We are, our customers are the, if they're not the number one, they're in the top three employers in the community that they serve. And so there are some dynamics from an employee headcount standpoint and economic development in the community.

Chris Fowler: And so there are some dynamics from an employee headcount standpoint and economic development in the community, which has traditionally been a barrier for us. I would say that if there was one thing that I've watched in either the onsite meetings that I've gone to, or as I watch our sales team and see the feedback that they're getting on the opportunities, it's that those barriers and the willingness for our customers to have meaningful conversations about moving to an outsource model just continue to grow.

Vinay Bassi: We are on track to deliver the 5 million dollar cost savings mentioned in the last earnings call in the year. The majority of actions have been initiated. We are continuously looking for areas to drive more efficiency in operations. In terms of improving the quality of our reported earnings, the percent of capitalized software in the quarter was 5.2 percent of revenue and down 50 basis points from last quarter. You will also see on our cash flow statement that our investments in software development has come in three million lower in the first two quarters this year compared to 2023.

Chris Fowler: I would say that if there was one thing that I've watched in the onsite meetings that I've gone to or as I watch our sales team and see the feedback that they're getting on the opportunities, if that those barriers and the willingness for our customers to have meaningful conversations about moving to an outsourced model just continue to grow. So I do think that, you know, as the months and quarters go on, we're just going to continue to see that expand. And so for us, it's about how do we make sure that we're built in a manner to capture that demand as it comes along, but I think that's the big trend is, you know, our hospitals, very similar to the larger market, are seeing this as a business decision that they've got to do so that they can be viable, financially viable.

Speaker Change: which has traditionally been a barrier for us.

Speaker Change: I would say that if there was one thing that I've watched in either of the on-site meetings that I've gone to or as I watch our sales team and see the feedback that they're getting on the opportunities, it's that those barriers and the...

Speaker Change: The willingness for our customers to have meaningful conversations about moving to an outsourced model just continue to grow.

Chris Fowler: So I do think that, as the months and quarters go on, we're just going to continue to see that expand. And so for us, it's about how we make sure that we're built in a manner to capture that demand as it comes along. But I think that's the big trend is, you know, our hospitals, very similar to the larger market, are seeing this as a business decision that they've got to do so that they can be financially viable, keep the doors open, and keep care in their community.

Speaker Change: So, I do think that, you know, as the months and quarters go on, we're just going to continue to see that expand. And so, for us, it's about how do we make sure that we're built in a manner to capture that demand as it comes along. But I think that's the big trend is, you know.

Vinay Bassi: We are investing wisely with an ROI focus and decline was primarily driven by some setting centric and other low ROI projects. Lastly, looking forward, we are focused on improving our forecasting processes. We have been working to strengthen the partnership between the finance team and each business leader and we have added a few experienced people to our SPN 18. We are building a monthly cadence of reviewing results, improving on key drivers for revenue and costs to help improving the forecasting process.

Speaker Change: Our hospitals, very similar to the larger market, is seeing this as a business decision that they've got to do so that they can be financially viable, keep the doors open, and keep the care in their communities.

Chris Fowler: And we'll keep the doors open and keep the care in their communities.

Stephanie Davis: So I guess a bit related one then for the name because you are calling out kind of an improving demand improving backdrop. But I think about this print and guidance versus the first few out of the gate, how much of this positivity is a function of improving demand and improving macro versus improvement and execution and getting a better handle on numbers going forward.

Stephanie Davis: So I guess a bit related one, then, for Vinay, because you are calling out kind of an improving demand and improving backdrop. When I think about this print and guidance versus the first few out of the gate, how much of this positivity is a function of improving demand and improving macro versus improvement in execution and getting a better handle on numbers going forward?

Speaker Change: So I guess a bit related one then for Vinay, because you are calling out kind of an improving demand and improving backdrop.

Vinay Bassi: When I think about this print and guidance versus the first few out of the gate, how much of this positivity is a function of improving demand, improving macro, versus improvement in execution and getting a better handle on numbers going forward?

Vinay Bassi: I want to note that this won't be a quick fix and I view it as an interactive multi-quarter journey. While all of these truth points are promising, there is still more room for improvement in these areas. Yes.

Vinay Bassi: And Stephanie, thanks for giving me the question. I just wanted to make sure I understood. Feel free to take all the credit. No, no. Just to make sure I answered it right, so your question is more about how does the strong momentum in bookings translate into guidance?

Vinay Bassi: And Stephanie, thanks for giving me the question. I just want to make sure I understand. You'll free and take all the questions. No, no, just to make sure I answer it right. So your question is more about how does the strong momentum in booking strong space into guidance? Well, how has the strong momentum, how much of that is a function of improving backdrop versus done the actions you guys have taken? So I would say it's a function of both, but because one is controllable, one is non controllable. The controllable part that we have done is the focus on making sure the need for from a customer delight customer focus is there.

Vinay Bassi: Moving on to our second quarter results starting from the softest bookings. Total bookings of 23.3 million in the second quarter was approximately 11% higher than last year, mainly from vehicle increases in EHR by slightly offset by RCN. In this quarter, RCN had a bookings of 13.5 million including vehicle with about 50% coming from our existing EHR's install base, demonstrating the progress we are making on a cross-selling goal. EHR generated 9.8 million in bookings with over two-thirds coming from existing customers.

Vinay Bassi: And Stephanie, thanks for giving me the question. I just wanted to make sure I understand the question. Feel free to take all the credit. No, no. Just to make sure I answered it right, so your question is more about how does the strong momentum in bookings translate into guidance?

Stephanie Davis: Well, how much of that strong momentum is a function of an improving backdrop versus some of the actions you guys are taking?

Speaker Change: Well, how has the strong momentum, how much of that is a function of an improving backdrop versus some of the actions you guys have taken?

Vinay Bassi: So, I would say it's a function of both, but because one is controllable, one is non-controllable. The controllable part that we have done is the focus on making sure the need for, from a customer delight perspective, customer focus is there. And it is not about, growth in financial terms is not about just winning new bookings. It is stemming attrition.

Speaker Change: So, I would say it's a function of both, but because one is controllable, one is non-controllable.

Vinay Bassi: The controllable part that we have done is the focus on making sure the need for, from a customer delight, customer focus is there and it is not about, see growth for financial terms is not about just winning new bookings.

Vinay Bassi: We've viewed this as a good sign that the customers are happy with the solutions and are willing to buy more from us. Revenue of 84.7 in the quarter was essentially flat compared to last year. The last year, an impact from sunsetting centric by EHR was offset by the positive contributions from vehicle which we acquired in the fourth quarter of last year. RCN revenue of 54.1 million dollars accounted for approximately 64% of total revenue.

Vinay Bassi: James. It is stemming attrition. So it's that focus and making sure that touching the customer and especially when they are going through the global workforce thing is ensuring that that customer delight remains the focus. So that to some extent is factored is also is reflected in the revenues that we see and the non-controllable of the market demand certainly is a tailwind that I expect to see in the near future and continued because as you know we win a booking in a certain quarter and depending upon the complexities of the deal in the in the future quarters I read those benefits.

Vinay Bassi: So it's that focus and making sure that touching the customer and, especially when we are going through the global workforce thing, ensuring that customer delight remains the focus. So that, to some extent, is factored in and reflected in the revenues that we see. And the non-controllable of market demand certainly is a tailwind that I expect to see in the near future and continue because, as you know, we win a booking in a certain quarter, and depending upon the complexities of the deal in the future quarters, I read those benefits.

Vinay Bassi: It is stemming attrition.

Vinay Bassi: So it's that focus and making sure that...

Vinay Bassi: Touching the customer and especially when we are going through the global workforce thing is ensuring that that customer delight remains the focus.

Vinay Bassi: to some extent is factored, is also is reflected in the in the revenues that we see and the

Vinay Bassi: Vehicle performed in line with expectations. Total gross margin of 48.8% increased 100 basis points year over year. RCN growth margins of 44.1% in the quarter improved approximately 84 basis points compared to the prior year, primary due to revenue seasonality and vehicle. This margin expansion was partially muted by efforts to seamlessly transition to our global workforce. Additionally, EHR gross margins of 57.3% increased 350 basis points year over year driven by internal cost actions.

Vinay Bassi: The

Vinay Bassi: Non-controllable of the market demand certainly is a tailwind that I expect to see in the near future and continue because as you know, we win a booking.

Vinay Bassi: all of them are doing a great job. And I think that's one of the reasons why, as we move forward, we're going to see more and more of these in a certain quarter. And depending upon the complexities of the deal in the future quarters, I read those benefits. So that's why I'm more hopeful and that whatever is in our controllable continue to make wise investments, whether it's in the sales, in marketing, and investments that can help us increase our customer delight

Chris Fowler: So that's why I'm more hopeful and that whatever is in our controllable continue to make wise investments, whether it's in the sales in marketing and investments that can help us increase our customer delight and yield that benefits than that revenue show up in the coming quarters.

Vinay Bassi: So that's why I'm more hopeful and that whatever is in our controllable, we should continue to make wise investments, whether it's in sales and marketing or investments that can help us increase our customer delight and yield those benefits whenever the revenues show up in the coming quarter. Yeah, and I'll give you a great example just from this week. So earlier this week, I was in Arizona and California for some sales opportunities.

Chris Fowler: Yeah, and I'll give you a great example just from this week. So earlier earlier this week I was in Arizona and California at some sales opportunities and the California California site. The catalyst was you know less than less than stellar operations but also some regulatory changes in California around wage increases a minimum wage and what the impacts can be for them. But before we were there, before we had given them any customer reference. They had already unsolicited made three or four calls to our customers to see how we were doing. And so to your point, our execution is always going to play a huge part in our ability to convert because, as great as we can sell and have the best story and marketing material and sales staff, if we're not executing, if we don't have a reference will customer base, then they're going to go somewhere else.

Vinay Bassi: And the California, California site, what the catalyst was, you know, less than stellar operations, but also some regulatory changes in California around wage increases and minimum wages and what the impact was going to be for them. But before we were there, before we had given them any customer reference, they had already unsolicited made three or four calls to our customers to see how we were doing. And so to your point, our execution is always going to play a huge part in our ability to convert because as great as we can sell and have the best story and marketing material and sales staff, if we're not executing, if we don't have a referenceable customer base, then they're going to go somewhere else.

Vinay Bassi: Yeah, and I'll give you a great example just from this week, so earlier this week I was in Arizona in California at some sales opportunities and the California side, the catalyst was, you know.

Vinay Bassi: Moving down the income statement reported operating expenses represented 52.4% of total revenue in the quarter compared to 50.1% a year ago. While product development sales and marketing and GNA are all down versus prior year, the increase in operating expense was primarily driven by an accelerated amortization of capitalized software costs associated with our financial management application product in EHR which was shut down in Q2 as part of cost efficiency efforts. All of these items led to an adjusted EBITDA of 12.6 million in the quarter, a 12% increase year over year and 33% increase sequentially.

Speaker Change: Less than stellar operations.

Speaker Change: but also some regulatory changes in California around a wage, increases in minimum wage and what the impacts can be for them.

Vinay Bassi: But before we were there, before we had given them any customer reference.

Vinay Bassi: They had already unsolicited made three or four calls.

Vinay Bassi: to our customers to see how we were doing.

Speaker Change: And so, to your point, our execution...

Vinay Bassi: is always going to play a huge part in our ability to convert, because as great as we can sell and have the best story and marketing material in sales staff, if we're not executing, if we don't have a referenceable customer base, then they're going to go somewhere else. So I think it's a little bit about, I think there are the...

Vinay Bassi: Likewise, adjusted EBITDA margin of 14.8% in the quarter increased 150 basis points year over year and about 350 basis points sequentially. Some of the outperformance in the quarter can be attributed to revenue seasonality and timing of annual license revenue recognition. Sequentially, when combined, these factors accounted for about 2 million dollars in revenue. Turning to the balance sheet, we ended the quarter with 7.7 million of cash and a net debt of 172.3 million, of India.

Chris Fowler: So I think it's a little bit about I think there are the factors in the macro that are driving people to the market. But I definitely think our performance is going to be the thing that determines whether they pick us or not.

Vinay Bassi: So I think it's a little bit of both. I think there are factors in the macro that are driving people to the market, but I definitely think our performance is going to be the thing that determines whether they pick us or not.

Vinay Bassi: The factors in the macro that are driving people to the market, but I definitely think our performance is going to be the thing that determines whether they pick us or not.

Stephanie Davis: Looking forward to seeing the application. Thanks, guys.

Mark: Welcome for the application. Thank you. You bet. Thanks, Stephanie.

Operator: You bet. Thanks, Stephanie.

Speaker Change: Welcome for receiving the application. Thanks guys.

George Hill: Here, next question comes from the line of George Hill with Disha Bank. George, your lane is now open. Hey, good evening, guys. Thanks for taking the question. I guess Chris on the EMR started the business. I'd ask you quickly. Like how's the legacy base holding up because you talked about the sales pipeline and the see growth is interesting, but like I guess what I'm kind of interested in when they kind of made the comment on like holding on to the legacy base. Versus kind of what's new and available. I guess I just like to hear you talk about the competitive environment and the base.

George Hill: Your next question comes from the line of George Hill with Disha Bank. George, your line is now open.

Stephanie Davis: You bet. Thanks, Stephanie.

Speaker Change: Your next question comes from the line of George Hill with the Chibank. George, your line is now open.

George Hill: Hey, good evening, guys. Thanks for taking the time to answer the question. I guess, Chris, on the EMR side of the business, I'd ask you quickly, like, how's the legacy base holding up? Because you talked about the sales pipeline and the seed growth there, which is interesting, but like, I guess what I'm kind of interested in, Vinay kind of made the comment on, like, holding on to the legacy base versus kind of what's new and available.

George Hill: Hey, good evening, guys. Thanks for taking the question. I guess Chris, on the EMR's part of the business, I'd ask you quickly.

Vinay Bassi: Operating cash flow was a positive $13.8 million in the quarter compared to a positive $0.7 million last year and a loss of $2 million in the first quarter of this year. In the quarter, we also paid an incremental $4 million of principle on our debt, bringing our first half repayment to $17 million. We reattraid our goal of getting it down to a range of $2.5 to 3 times, mainly from improving adjusted EBITDA and potential debt repayments.

George Hill: Like how's the legacy base holding up because you talked about the sales pipeline and the seed growth there is interesting, but like, I guess what I'm kind of interested in, Vinay kind of made the comment on like holding on to the legacy base.

Speaker Change: versus kind of what's new and available. I guess I would just like to hear you talk about the competitive environment and the bass.

George Hill: I guess I would just like to hear you talk about the competitive environment and the base. And then a quick follow-up would just be, as it relates to the provider side of the business, we're seeing a lot of, or the rev cycle side of the business, we're seeing a lot of growth in utilization in a lot of provider categories. Are you guys seeing the utilization strength flow through to both kinds of volume and pricing growth on the RCM side of the business? Thanks. Okay.

Chris Fowler: And then a quick follow-up would just be as it relates to the provider side of the business. We're seeing a lot of or the rough cycle side of the business. We're seeing a lot of growth in utilization and a lot of provider categories. Are you guys seeing the utilization strength flow through to both kind of volume and pricing growth on the RCM side of the business. Thanks. Okay, great. I'll try to. I may have to ask you to help me come back to some of that. But let me start with the first one. Around the EHR business.

Speaker Change: And then a quick follow-up would just be, as it relates to the provider side of the business, we're seeing a lot of, or the RevCycle side of the business, we're seeing a lot of growth in utilization in a lot of provider categories. Are you guys seeing the utilization strength?

Vinay Bassi: My final topic is guidance. We are providing an outlook for the third quarter and maintaining our full year ranges. For the third quarter, we expect revenue between $82 and $85 million and adjusted EBITDA between $11.5 million to $13.5 million.

Speaker Change: flow through to both kind of volume and pricing growth on the RCM side of the business. Thanks.

Chris Fowler: Okay, great. I'll try to, I may have to ask you to help me come back to some of that, but let me start with the first one, around the EHR business. I would say our retention, you know, outside of the centric customer base, we're very pleased with how our retention, our stickiness, and our customer base is holding up. We continue to make investments into the product to keep those customers happy and on the EHR and also... Um, so we are, you know, from a competitive standpoint, you know, I think I've said this in calls past, um, it seems like there is still a bit of a hangover as it relates to, you know, EHR spend, and especially in our end of the market, um, you know, if it's not on fire, they're probably looking to invest that money elsewhere, whether it be the facility, whether it be in additional services, or something there in the community, um, but we are, you know, there are drivers, HDI-1 was something that we thought would be a catalyst for us, uh, in this year, it obviously got delayed into 2025, um, as there are regulatory, uh, impacts like that, we tend to see a pickup in our opportunities for EHR win, so a couple of our retention rates that we've had this year with how we see kind of a favorable market going in next year, um, you know, we continue to be optimistic about that part of the business, um, on the second side as it relates to, see if I make sure I get this right, the provider volumes and utilization, uh, going up, um, what I would say is, is that, you know, we're seeing our, our hospitals that are thriving are really starting to expand the services that they're providing, uh, through their positions and seeing that utilization go up, um, I don't think it's any surprise to anybody that, that care is moving, you know, sort of outside of the four walls of the hospitals, and so I think the smart hospitals are really making sure that they've got a strong physician network that's able to capture that, um, which again goes back to one of the rationales for us making the acquisition of Bugle last year was that we, we, you know, we see the winds changing to where I think that there's going to be a big market and opportunity for us in the RCM space there, um, and, and we're seeing that kind of to, to, to play out through, um, our customers today. Thank you. That's helpful. You bet. Thank you, George.

Speaker Change: Okay, great. I'll try to, I may have to ask you to help me come back to some of that, but let me start with the first one.

Operator: There are no further questions at this time. I will now turn the conference back to Chris for closing remarks. Chris? Thank you, Mark. And thanks again.

Chris Fowler: I would say our retention outside of the centric customer base. We're very pleased with how our retention, our stickiness, and our customer base is holding up. We continue to make investments into the product to keep those customers happy and on the EHR, and also. So we are from a competitive standpoint. I think I've said this in calls past. It seems like there is still a bit of a hangover as it relates to EHR spend, especially in our end of the market. If it's not on fire, they're probably looking to invest that money elsewhere, whether it be the facility, whether it be in additional services, or something there in the community.

Speaker Change: Around the EHR business.

Vinay Bassi: I'd like to highlight that the third quarter that adjusted EBITDA benefits from the additional cost savings and lower than expected annual conference costs mentioned in the last earnings call, offsets from some revenue seasonality and timing of license revenue recognition mentioned earlier. For the full year, we are re-itrating our ranges and expect revenue to be between $3.30 million to $3.40 million and adjusted EBITDA to be between $45 million and $50 million.

Chris Fowler: And thanks again to everybody for joining us today, and thanks for your continued interest in TruBridge. I'd also like to thank all of our employees who work hard every day to make our clients successful and deliver quality healthcare to our communities. It's our privilege to work with some really wonderful clients and the amazing things that they do in the challenging environments that they're in. Everybody have a great evening. Talk to everyone soon. Bye-bye.

Speaker Change: I would say our retention, you know, outside of the centric.

Speaker Change: Customer Bass, we're very pleased with how our retention, our stiginess and our customer bass is holding up.

Speaker Change: We continue to make investments into the product to keep those customers happy and on the EHR and also...

Speaker Change: So, we are, you know, from a competitive standpoint, you know, I think I've said this in calls past.

Speaker Change: It seems like there is still a bit of a hangover as it relates to, you know, EHR spend, especially on our end of the market. You know, if it's not on fire, they're probably looking to invest that money elsewhere, whether it be the facility, whether it be in additional services or something there in the community. But we are, you know, there are drivers. HCI-1 was something we thought would be a catalyst for us in this year. It obviously got delayed into 2025.

Operator: Gentlemen, that concludes today's call. Thank you all for joining us. You may now disconnect.

Vinay Bassi: In conclusion, I'm pleased with our second quarter results and the progress we have made in the first half of this year, enhancing and improving our financial acumen. Based on the recent results, the improving quality of our financials and our pipeline, I feel increasingly confident that we have a clear line of size to achieve our 2024 targets and return to growth in the out years.

Chris Fowler: But we are, you know, there are drivers. HTI-1 was something that we thought would be a catalyst for us in this year. It obviously got delayed in the 2025 as there are regulatory impacts like that. We tend to see a pickup in our opportunities for EHR, and so a couple of our retention rates that we've had this year with how we see kind of a favorable market going in next year. We continue to be optimistic about that part of the business. On the second side, as it relates to, see if I make sure I get this right, the provider volumes and utilization going up.

Mark: With that, we'll open the question. We will now begin the question and answer session. If you have dialed in, would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your questions, press star one again. Thank you.

Speaker Change: As there are regulatory impacts like that, we tend to see a pick-up in our opportunities for EHR wins, so a couple of our retention rates that we've had this year, with how we see kind of a favorable market going in next year, we continue to be optimistic about that part of the business.

Sarah James: Your first question comes from the line of Sarah James with Counter-Physierald, Sarah, her line is now open. Thank you and congrats on a great quarter. It's nice to see the balance sheet improve on so many metrics. Can you talk a little bit about margin progression? So if we look at the 3Q guide and the implied 4Q, it looks like your EBITDA margins taking up at about 20 to 40 basis points a quarter. Is that a fair pacing of how we can think of improvement going forward?

Speaker Change: On the second side as it relates to, see if I make sure I get this right, the provider volumes and utilization going up, what I would say is that, you know, we're seeing our hospitals that are thriving,

Chris Fowler: What I would say is that, you know, we're seeing our hospitals that are thriving are really starting to expand the services that they're providing through their positions and seeing that utilization go up. I don't think it's any surprise to anybody that care is moving, you know, sort of outside of the four walls of the hospitals. And so I think the smart hospitals are really making sure that they've got a strong position network that's able to capture that, which again goes back to one of the rationales for us making the acquisition of Hugo last year, was that we, you know, we see the winds changing to where I think there's going to be a big market and opportunity for us in the RCM space there.

Speaker Change: are really starting to expand the services that they're providing.

Speaker Change: through their positions and seeing that utilization go up. I don't think it's any surprise to anybody that care is moving, you know, sort of outside of the four walls of the hospitals. And so I think the smart hospitals are really making sure that they've got a strong physician network that's able to capture that.

Sarah James: Or are there certain initiatives that could make it more lumpy as the company progresses towards their long-term guidance?

Chris Fowler: Yeah, Sarah, this is Chris. I'll start and let Venet kind of fill in behind me. I think the big thing for us right now, and I called this out in my comments, was how we're thinking about the conversion to our offshore staff for our CBO operations and making sure that we are being very intentional to protect the service and keep our retention levels at or above where they need to be.

Speaker Change: which again goes back to one of the rationales for us making the acquisition of Bugle last year.

Speaker Change: was that we, you know, we see the winds changing to where I think that there's going to be a big mark at an opportunity for us in the RCM space there. And we're seeing that kind of to play out through our customers today.

George Hill: And we're seeing that kind of to play out through our customers today. Thank you. That's helpful. You bet. Thank you, George.

Speaker Change: Thank you. That's helpful.

Speaker Change: You bet. Thank you, George.

Mark: There are no further questions at this time.

Chris Fowler: I will now turn the conference back to Chris for closing remarks. Press. Thank you, Mark. And thanks again to everybody for joining today. And thanks for your continued interest and true bridge. I'd also like to thank all of our employees who work hard every day to make our clients successful and deliver quality healthcare to our communities. It's our privilege to work with some really wonderful clients and the amazing things that they do and the challenging environments that they're in.

Speaker Change: There are no further questions at this time. I will now turn the conference back to Chris for closing remarks.

Vinay Bassi: And so this year may see a little bit of a muted margin gain based on where we expect things to go forward. And with that, while we're pleased with what we're seeing, we're still want to make sure that we're giving ourselves a little bit of grace to be able to get through the year to make sure that, again, customers are satisfied with this big step in our change and the way that we're delivering the service before we really kind of push the gas pedal on that.

Speaker Change: Chris? Thank you, Mark. And thanks again to everybody for joining today, and thanks for your continued interest in TruBridge. I'd also like to thank all of our employees who work hard every day to make our clients successful and deliver quality healthcare to our communities.

Speaker Change: It's our privilege to work with some really wonderful clients and the amazing things that they do in the challenging environments that they're in. Everybody have a great evening. Talk to everyone soon. Bye-bye.

Chris Fowler: Everybody has a great evening. Talk to everyone soon. Bye-bye.

Mark: Gentlemen, that concludes today's call. Thank you all for joining.

Operator: You may now disconnect.

Vinay Bassi: So I would say, I would give us probably the next quarter or so to really kind of get a good sense of as we see that continue to accelerate what that's going to be. But again, along with that and Venet can jump in here as well, there are the continued savings initiatives that we continue to see really paying off and making sure that we are intentional about every dollar that we spend and making sure that it's going to the betterment of our customers or the betterment of our employees.

Speaker Change: Gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Speaker Change: and others. Thank you for watching. I hope you enjoyed this video. If you did, please click the like button and subscribe to my channel. I'll see you in the next video.

Vinay Bassi: Yeah, and I would add echo that, and that's a great question. Especially, as I mentioned, there was some seasonality and timing between Q3 and Q2 and Q3, but by Q4, we expect margin to improve a little bit more with incremental revenues which takes the benefit of last two, three quarters that has been great for us. But longer term, as Chris mentioned, once I have a few more quarters, understand the full drivers and have the process a little more, I do expect our margins to continue improving because that's our goal.

Vinay Bassi: So and it's a very simple way for me, a very laser focused tighter control on cost and giving all the support needed to generate the white space as well as our home turf of rural health care to get increased bookings. So that benefit should start falling in. So my goal will be to once like Chris said, have this quarter, a one more quarter behind us and start seeing the regular improvement in margins.

Vinay Bassi: And I'll end with this with that Sarah. You know, we have said in quarters past our expectation or desire to be back at a 20% plus margin from an EBITDA perspective. And I still think that that is well within striking distance and hopefully a way point down the distance.

Chris Fowler: Foundation. That's great. And one more if I could. So we're starting to see a little bit of relief on hospital margins and some of your peers have started talking about how that flows into sales pipeline. Could you give us an update on the financial health of your customer base and how that translates into demand for product expansion next year? Yeah, you know, I would say our customer base is still a bit of a mixed bag, but has really felt the benefit, you know, still kind of carried over from some of the COVID relief over the last several years and have given them the opportunity to really to store some cash on hand.

Chris Fowler: I think for us, you know, because the vast majority of our customers, especially on the EHR side, really have the full suite of products that we have delivered. Whether that be through interest as they're going forward or through the past with meaningful use. And so what they're focused on right now is continued efficiency and operations. And I think that's where we're continuing to see the demand on the services side as much as we are from a product perspective.

Sarah James: Thank you. Thanks, Sarah.

Jeff Garrow: Your next question comes from the line of Jeff Garrow with Stephen Jeff.

Jeff Garrow: Your line is now open. Yeah, good afternoon. Thanks for taking the questions and looking at the bookings results year-to-date. We see momentum for both segments of the business. So one of the ask is you look out on the pipeline for the second half, whether you see the expectations for continued momentum by us towards one segment or the other in the back half of the year.

Chris Fowler: Hey, Jeff. Thanks for the question. It's a great one and something we obviously pay a lot of attention to. And if you go back to the end of last year, first of this year, maybe before that. And we talked about, you know, the RCM's out of the house really being where we saw the opportunity for growth, but to your point, you know, we're seeing a bit of a renaissance in the EHR opportunities.

Chris Fowler: I think it's, I think it might be a little early for us to say that we think that that's a trend. But we are seeing where there is opportunity, especially when we think about the interest, the ability to couple the EHR with the with the RCM service. And that being a differentiator that, you know, there's still some disparate are not the spirit. There's still some some vendors out there that we feel like are prime for replacement on the EHR side.

Chris Fowler: We continue to enhance the experience for our customers there and invest as they said, or being smarter about how we're spending those dollars to make sure that our customers are really getting the the outsize return for that. And I think it's leading to some promising opportunities for us there. But, you know, going forward, you know, I'd love to see both sides continue to compete for who's going to be the leader every quarter.

Chris Fowler: Because I think that's just a good thing for us. I do think that the world of opportunity is much bigger on the RCM side. So I think for us it's about how we think about that continuing to expand while we're continuing to see the EHR come all nice.

Chris Fowler: Jackson, great to hear. Maybe if I'll put a little bit on the momentum for interest.

Chris Fowler: Just curious if there's any particular driver you would call out there whether it's recent regulatory rules being put out in the public domain or you alluded a little bit to a competitive dynamic and then also whether there's any kind of tailwind from the final leg of trying to convert your own legacy EHR platforms to your more modern platform. Yeah, I think there's a little bit of everything in there. I think if you look at our existing customer base, so our customers are already on the EHR.

Chris Fowler: I think the first thing is they have to believe that we're going to continue to be the right partner for them on the EHR. So it's super important for them to see the value in that, which really allows us to have a good seat at the table from an RCM standpoint. Even though they could look at us stand alone if they were leaving us to go to another vendor, I do think that whenever we want to look at it, we're all TruBridge, right?

Chris Fowler: And so I think for that cohort that crossed out opportunity, then them seeing the value in the EHR is super important and so our investment in delivery there is top of the house. When we're thinking about the net new market, so a replacement more than likely, I do think it is a differentiating value that we are the long wolf out there that can provide both the EHR and the RCM service together.

Chris Fowler: And I think the fact that it's all at a contingent based on, so their EHR is no longer a flat fee or a license purchase, it's based on the utilization of their hospital, it's based on our performance from a collection standpoint. So our initiatives are aligned as well as they can possibly be and that our definitions of success match up. So I think those are really the two biggest things that we're seeing. We're seeing that momentum on the EHR side with the continued investment in the product. We're seeing the ability to sell the two together to really kind of drive that opportunity for interest going forward.

Chris Fowler: Excellent, I appreciate those comments. And last one for me, do I make sure to hit the demand side a little bit more on RCM. You told a nice story of the combination with Google being cited by one of the prospects that you're dialoguing with. So I'm curious whether that combination specifically or maybe your efforts on automation more generally are not just a margin driver, but are also helping fuel the pipeline for future demand on the RCM side.

Chris Fowler: There's no doubt that our ability to deliver the service at a lower price point is absolutely getting us into more opportunities and also giving us a better right to win. We're just short of a 20% increase on our winning percentage year every year. And I think that's directly attributable attributable to our ability to be, you know, while not every deal that we're in as competitive when they are competitive, you know, it helps for us to be able to be at or better than the competition from a price standpoint, knowing that our delivery is going to be there.

Chris Fowler: So yeah, I still continue to be very optimistic about what that means for us going forward. I think, you know, we talked about in the past, we're just scratching the surface still on the automation and how that how that shows up and translates into margin expansion. I think the fact that we're delivering quality analytics and insights to our customers today gives them belief that that we're going to be able to actually execute on meaningful leverage of the artificial intelligence.

Jeff Garrow: Thank you. Great to hear that data point on the win rate. Thanks again for taking the questions. You bet. Thanks, Joe.

Stephanie Davis: Your next question comes from DeLine of Stephanie Davis with Barclays. Stephanie, your line is now open. Hey guys, thanks for taking my question. Congrats on the quarter. So first off, I was hoping you can tell us about some broader trends. We've seen a lot of movement in the revenue cycle space across the past few months with my POs and takeouts, but I get you have a little bit of a different competitive backdrop. So could you give us a refresh or seeing anything different or any changes on the backdrop and how it could be impacting us forward. Thanks for joining. Thanks for the nice comments.

Chris Fowler: I would say, and again, said this in the remarks, you know what we're seeing is the market continuing to come closer to us, meaning that we're not having to knock the door down for lack of a better term when it relates to explaining why our hospitals need to be evaluating the outsourced model. You know, we do have a different market. We are our customers are the, if they're not the number one, they're in the top three employers in the community that they serve.

Chris Fowler: And so there are some dynamics from an employees headcount standpoint and economic development in the community, which has traditionally been a barrier for us. I would say that that if there was one thing that I've watched in the, in either the onsite meetings that I've gone to or as I watch our sales team and see the feedback that they're getting on the opportunities, if that those barriers and the willingness for our customers to have meaningful conversations about moving to an outsourced model, just continue to grow.

Chris Fowler: So I do think that, you know, as the as the months and quarters go on, we're just going to continue to see that expand. And so for us, it's about how do we make sure that we're built in a manner to capture that demand as it comes along, but I think that's the big trend is, you know, our, our hospitals very similar to the larger market is seeing this as a business decision that they've got to do so that they can be viable financially viable. And we'll keep the doors open and keep the care in their communities.

Stephanie Davis: So I guess a bit related one then for the name because you are calling out kind of an improving demand improving backdrop. But I think about this print and guidance versus the first few out of the gate, how much of this positivity is a function of improving demand and improving macro versus improvement and execution and getting a better handle on numbers going forward.

Vinay Bassi: And Stephanie, thanks for giving me the question. I just want to make sure I understand. You'll free and take all the questions. No, no, just to make sure I answer it right. So your question is more about how does the strong momentum in booking strong space into guidance? Well, how has the strong momentum, how much of that is a function of improving backdrop versus done the actions you guys have taken? So I would say it's a function of both, but because one is controllable, one is non controllable.

Vinay Bassi: The controllable part that we have done is the focus on making sure the need for from a customer delight customer focus is there. James. It is stemming attrition. So it's that focus and making sure that touching the customer and especially when they are going through the global workforce thing is ensuring that that customer delight remains the focus. So that to some extent is factored is also is reflected in the in the revenues that we see and the the the non-controllable of the market demand certainly is a tailwind that I expect to see in the near future and continued because as you know we win a booking in a certain quarter and depending upon the complexities of the deal in the in the future quarters I read those benefits.

Vinay Bassi: So that's why I'm more hopeful and that whatever is in our controllable continue to make wise investments, whether it's in the sales in marketing and investments that can help us increase our customer delight and yield that benefits than that revenue show up in the coming quarters.

Chris Fowler: Yeah and I'll give you a great example just from this week. So earlier earlier this week I was in Arizona and California at some sales opportunities and the California California site. The catalyst was you know less than less than stellar operations but also some regulatory changes in California around wage increases a minimum wage and what what the impacts can be for them. But before we were there before we had given them any any customer reference.

Chris Fowler: They had already unsolicited made three or four calls to our customers to see how we were doing. And so to your point our execution is always going to play a huge part in our ability to convert because as great as we can sell and and have the best story and marketing material and sales staff if we're not executing if we don't have a reference will customer base then they're going to go somewhere else.

Chris Fowler: So I think it's a little bit about I think there are the factors in the macro that are driving people to the market. But I definitely think our performance is going to be the thing that determines whether they pick us or not.

Stephanie Davis: Welcome for the application. Thank you. You bet.

George Hill: Thanks, Stephanie. Here next question comes from the line of George Hill with Disha bank George your lane is now open. Hey, good evening guys. Thanks for taking the question. I guess Chris on the EMR started the business. I'd ask you quickly. Like how's the legacy base holding up because you talked about the sales pipeline and the see growth is interesting but like I guess what I'm kind of interested in when they kind of made the comment on like holding on to the legacy base.

George Hill: Versus kind of what's new and available. I guess I just like to hear you talk about the competitive environment and the base. And then a quick follow up would just be as it relates to the provider side of the business. We're seeing a lot of or the rough cycle side of the business. We're seeing a lot of growth in utilization and a lot of provider categories. Are you guys seeing the utilization strength flow through to both kind of volume and pricing growth on the RCM side of the business. Thanks. Okay, great. I'll try to I may have to ask you to help me come back to some of that.

Chris Fowler: But let me start with the first one. Around the EHR business. I would say our retention outside of the centric customer base. We're very pleased with how our retention our stickiness and our customer base is holding up. We continue to make investments into the product to keep those customers happy and on the EHR and also. So we are from a competitive standpoint. I think I've said this in calls past. It seems like there is still a bit of a hangover as it relates to EHR spend, especially in our end of the market.

Chris Fowler: If it's not on fire, they're probably looking to invest that money elsewhere, whether it be the facility, whether it be in additional services or something there in the community. But we are, you know, there are drivers. HTI-1 was something that we thought would be a catalyst for us in this year. It obviously got delayed in the 2025 as there are regulatory impacts like that. We tend to see a pickup in our opportunities for EHR and so a couple of our retention rates that we've had this year with how we see kind of a favorable market going in next year. We continue to be optimistic about that part of the business.

Chris Fowler: On the second side, as it relates to, see if I make sure I get this right, the provider volumes and utilization going up. What I would say is that, you know, we're seeing our hospitals that are thriving are really starting to expand the services that they're providing through their positions and seeing that utilization go up. I don't think it's any surprise to anybody that care is moving, you know, sort of outside of the four walls of the hospitals.

Chris Fowler: And so I think the smart hospitals are really making sure that they've got a strong position network that's able to capture that, which again goes back to one of the rationale for us making the acquisition of Hugo last year, was that we, you know, we see the winds changing to where I think there's going to be a big market and opportunity for us in the RCM space there. And we're seeing that kind of to play out through our customers today. Thank you. That's helpful. You bet. Thank you, George. There are no further questions at this time.

Chris Fowler: I will now turn to conference back to Chris for closing remarks. Press. Thank you, Mark. And thanks again to everybody for joining today. And thanks for your continued interest and true bridge. I'd also like to thank all of our employees who work hard every day to make our clients successful and deliver quality healthcare to our communities. It's our privilege to work with some really wonderful clients and the amazing things that they do and the challenging environments that they're in.

Mark: Everybody have a great evening. Talk to everyone soon. Bye-bye.

Operator: Gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.