TruBridge, Inc.

Greetings and welcome to the TrueBridge Q4 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. Should anyone require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Drew Anderson. Thank you. You may begin.

Thank you. Good afternoon, and welcome to the True Bridge fourth quarter 2024 earnings conference call. Leading today's call are Chris Fowler, President and Chief Executive Officer, and Vinay Bassey, 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 guaranteed the 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. 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.

Hey, thanks, Drew. And thanks to everyone for joining us today. I would categorize 2024 as a year of constant improvement, highlighted by a rebranded TrueBridge, acceleration in our global workforce strategy, and dramatic improvement to our financial operations. Today, I'll provide you with updates on the progress we've made on the initiatives we started in 2024 and discuss new areas of focus as we move into 2025. While we're very proud of our team's execution in both the quarter and for the year overall, we are equally excited about the opportunity we have in front of us for 2025 and beyond. In the fourth quarter, we saw revenue of $87.4 million, an increase of 2%. and adjusted EBITDA of 17.2 million, which was an increase of 44% over last year. Margins improved steadily each quarter in 2024, starting at 11.4% in Q1 and growing to 20% by Q4. However, there are a few one-time items included in Q4 that Vinay will cover in just a few minutes. Lastly, cash flow from operations of $10.3 million was a $23 million improvement compared to a year ago. Turning now to our full-year highlights, revenue for the year came in at $339 million with an adjusted EBITDA of $53 million, exceeding the high ends of our guidance ranges. As a result of our focus on increasing operating efficiency and fiscal prudence, We were able to grow cash flow from operations to $32 million from just over $1 million last year. We deployed capital effectively through judicious use of capital expenditures and reduced our leverage ratio from four to three times. And we will continue to focus on delivering going forward. We remain on track with the integration of UGLE, our ambulatory offering that we acquired in Q4 of 2023, and are currently working through our second wave of customer transitions. Bookings for the full year were in line with expectations at $82 million. For the fourth quarter, we saw $14.3 million in bookings, as the few deals we had hoped would be signed in the fourth quarter have taken longer to finalize. One of those deals has already signed in the first quarter, and the rest we expect to be completed in the first half of 2025. While I am a bit disappointed by our fourth quarter bookings performance, I'm still pleased with the strength of the first three quarters and with where we landed for the full year. Going forward though, there are two things to keep in mind that could present continued lumpiness in bookings. First, while I ultimately believe the changes in Washington will be a net positive for our space, there is uncertainty associated with how this administration will address the funding of healthcare, which could have a slight impact on the timing of deals. And secondly, as we scale up and see deals getting larger, the concentrations of bookings in those specific contracts could provide an increase in short-term volatility. That said, we are already learning from this and being proactive by making tweaks to our Salesforce incentive structure that we believe will continue to drive bookings execution. And I'll touch base on that more in detail in a bit. The past few quarters, I've talked about how our Entrust offering, our integrated financial health and patient care solution, is critical to our long-term success and share my confidence that this is gaining traction in the market. With 2024 behind us, we are now able to add a new data point to demonstrate that claim. In 2024, I'm sorry, in 2022, Entrust had 14 unique wins. In 2023, we had 18, and this past year, we reached 24 interest deals. A recent proof point of the value interest delivers is seen in the announcement we made after Lady of the Sea General Hospital from Louisiana selected TrueBridge. Lady of the Sea was a longtime customer that left in 2018. However, in 2024, they decided a change was needed. After a competitive evaluation, TrueBridge stood out to them based on our reliability of our RCM service and the progress we have made on modernizing our EHR solution. Along with cross-sell success, part of our long-term growth strategy is our plan to use our financial health offerings to build a larger presence in 100 to 400 bed hospitals. From 2023 to 2024, this part of the market grew from 5% of the financial health opportunities in our pipeline to just over 20%. And we intend to capitalize on that. As reimbursement and billing become ever more complex, most hospitals still operate their own RCM efforts internally. I still believe there are great opportunities for growth ahead of us. In fact, 75% of the time, no decision remains the reason we don't close the deal, not a loss to a competitor. Looking ahead to 2025, we have no intention of slowing down the progress we have made with the plan we set forth in 2024. We will continue to focus on fine tuning our operations across the board. Our top priorities for the organization are improving customer satisfaction and retention and increased profitability and growth. In that spirit, we recognize that to see long-term success, our financial health business unit must operate seamlessly. So in January, we brought in new leadership to build on the work being delivered by the team. Meredith Wilson brings over 25 years of healthcare technology leadership experience to the TrueBridge team, including 20 years with experience. Experience, she held several roles, including heading up their revenue cycle solution and leading their successful offshoring initiative. In addition, Meredith has extensive experience optimizing RCM solutions, regardless of hospital size. Her invaluable experience made us confident she was the right choice for her role, where she'll be focused on customer satisfaction retention, the global transition, pipeline expansion, and revenue growth. We welcome her leadership and look forward to benefiting from her wealth of experience. As a reminder, in 2024, we made the decision to elevate the role of general manager to report directly to me, increasing autonomy and accountability for both Meredith and David Horst. David's a 20-year veteran who joined us from Cerner two years ago to lead our patient care business unit. In February, we made additional corporate governance enhancements, further demonstrating continuous progress to enhance all aspects of the business. We are taking steps to declassify our board in an effort to align better with shareholder expectations, and we have expanded the board by adding two independent directors, Jerry Canada, the former group president of Harris Computers Healthcare Group, and Drew Shapias, who is the head of Ocho Capital, his family office, and who sits on the board of directors of several private companies. With these new additions, seven of the nine directors on our board are independent, and we look forward to benefiting from the unique skill set and new perspectives of the four board members that we have added in the last two years. When we began our journey last year, we were very transparent about our financial initiatives and provided you with updates on our progress each quarter. We'd like to take a similar approach this year with our operational initiatives. and they can be bucketed under three categories, financial health, patient care, and sales and marketing. Let's start with the business unit, financial health. Our global workforce execution will be a top priority in 2025. As of year end, 30% of our CBO clients are being supported by our global team. While our goal for 2025 is to double that number to 60%, we do not view that as the end of this process. global workforce remains a major level for us to achieve our margin expansion goals. And we are working hard to ensure that this transition is as smooth as possible from a customer perspective. Our first wave of customer transitions taught us a lot, and we have since been implementing best practices. From an employee ratio standpoint, we are committed to investing in stability and continuity for our customers early in the process, but expect it will show continued improvements and efficiency over time. Renewals are another focus for the Financial Health Business Unit this year. We have approximately 60 key CBO customers that are up for renewal in the next 24 months, and Meredith and her team are on top of this with plans and monitoring in place to ensure retention of these customers. And we intend to give you insight into our progress as the year unfolds. Now turning to our patient care operational initiatives. Our first patient care initiative is measuring client success by revenue retention. Except for Centric, we have over 95% client retention, but remain focused with a dedicated team to enhance customer satisfaction. The next area of focus is to expand the wallet share of our customer base by delivering new offerings. Excluding AHC and Centric, EHR was a flat business. However, we expect growth in the business from offerings such as our own analytics solutions and partner solutions like ERP for multi-viewing. We believe that the uptake of the new products are key to our long-term success. Lastly, leveraging the advent of these offerings, we will continue to focus on converting our customer base to one of our two SaaS solutions, our pure SaaS model or our Entrust. For the past few years, 100% of our new EHR system sales have been SaaS or volume-based Entrust offerings. Right now, only about a third of our customers are on one of those models, but we remain optimistic that with the continued investment in the EHR and the interest model, we will see meaningful movement to SaaS. Finally, I'll discuss our sales and marketing focus for 2025. While we have continually improved the sales team and processes to align with the gross needs of the business in recent quarters, evolved the commission structure to reward sales of newer product offerings and renewals, we still have plans to improve. This year, we intend to increase investments in brand and lead generation that are weighted toward financial health. This is aimed toward improving pipeline stability for consistent bookings and improved win rates. As you can see, we're proud of the headway we've made on the goals we set for ourselves in 2024 to kickstart this journey and now have a renewed determination to further this progress in 2025. For this year, through the priorities I have laid out for you, we are setting our sights on higher client retention, increased profitability, improved cash flow and capital allocation, and core business growth of 4%. Over the next few years, we will continue to achieve mid-single-digit revenue growth and EBITDA margins in the mid-20s. Our financial outcomes are directly related to the progress we make on these initiatives, and therefore, our rapid progress on each is imperative. Moving forward, we feel encouraged about our several tangible avenues to further growth. interest cross-selling, expanding our presence in larger 100 to 400 bed hospitals, and wallet expansion of our existing customers. We spent last year course correcting. Now we're able to shift our energy and resources towards execution, and we will continue to invest in our team to ensure we are in the best position possible to succeed. We're making meaningful progress on all fronts, and I look forward to seeing what's to come. With that, I'll turn the call over to Vinay for a deep dive in the financials. Vinay?