Douglas Elliman 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 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 Experian. 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 Chapitas, 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?

Thanks, Chris, and welcome, everyone. Today, I will begin by providing an update on our key financial initiatives, review fourth quarter results, share the 2024 full-year highlights, and close by providing color on our initial 2025 outlook. Overall, we had a great 2024, ending the year on solid footing with a strong Q4. I'm also very pleased with the progress we made on each of our key initiatives, which I will share. Starting with our priority to improve cash flows and working capital management, Q4 was another... improvements we have been making all year and our continued focus on accounts, receivables, and collections. In Q4, cash flow from operations was $10.3 million, up approximately $23 million compared to the prior year. Q4 accounts receivable balance was down 5% sequentially and down 10% versus the prior year, and DSOs improved 10 days over the last 12 months. For the full year, we generated $32.1 million in cash flow from operations compared to just $1 million in 2023. Free cash flow, which we defined as cash flow from operations less capex, was $15.5 million in 2024 compared to a negative $22 million a year ago, an improvement of $38 million year over year. The year-over-year growth is primarily from increased profitability, improved working capital management, and lower net capital expenditures. Free cash flow as a percent of adjusted EBITDA was 29% in 2024, up significantly from the negative percentage a year ago. While there is still some room for improvement, I'm pleased with the results we saw in 2024. As a result of these improvements, we were able to pay down an additional $4 million of principal on our debt, bringing the total year-to-date repayment to $23 million. Our net leverage ratio in Q4 improved to three times, down from over four times a year ago. While we are pleased with the progress to date, reduction of debt and capital expenditure spend remain a critical part of our capital allocation strategy as we continue to work towards our goal of being in the range of 2.5 times. In addition, we continue to see progress in our efforts to optimize the business and expand profitability. As discussed last quarter, we saw a meaningful impact on margins from a continued focus on expense management, including the cost rationalization actions we completed in Q3 that provided slightly better than expected cost savings with approximately $6 million in year and over $8 million in run rate savings. In addition, we tightened our process on hiring and vendor management to further optimize our expenses, both of which we expect to provide further saving opportunities in 2025. Finally, we saw a positive impact on margins in Q4 from the Global Workforce Initiative as we transitioned the first wave of clients this year and started to see the cost savings flow through. As a result, Q4 adjusted EBITDA margins increased to 19.7% this quarter, an improvement of approximately 580 basis points compared to the prior year and 325 basis points sequentially. Throughout 2024, we remain committed to improving the quality of our reported earnings. We implemented additional reviews on all our major investments with an increased focus on ROI and worked diligently to clean up our balance sheet and rationalize our real estate footprint. While CapEx remains a key driver for our organic growth strategy, we have taken steps to rationalize our spend and sunset projects with a low ROI. To that end, capitalized software as a percent of total revenue was 4.3% in Q4, down 150 basis points compared to the previous year, and down 84 basis points sequentially. On the year, total capitalized software of $17.5 million down $5.6 million versus prior year, primarily driven by sunsetting Centric and other lower ROI projects. Full year capitalized software represented 5.1% of total revenue and improvement of approximately 160 basis points compared to 6.8% a year ago. As mentioned last quarter, in October 2024, we rationalized our real estate footprint in Mobile, Alabama, and received net proceeds of $2.5 million. Finally, I would like to highlight the progress we have made in 2024 to improve our forecasting and accounting processes. Over the course of 2024, we strengthened our finance and accounting teams and continued implementing more robust processes and controls. While our financials are getting more predictable, for 2025, there could be a couple of million dollars of non-recurring items relating to short-term projects, the impact of collections of age receivable, and other items that can trickle in any quarter. We have also increased accountability and rigor of our monthly reviews of results, leading to greater predictability and more effective controls on paths to remediation of the control weaknesses. As a result, we were able to set achievable and meaningful guidance expectations, and looking back, we met or exceeded those goals. Forecast accuracy and building predictability remains a key initiative in 2025, as there is still some room to grow on our accuracy, estimating expenses, and further strengthening our processes and controls. Now turning to the fourth quarter review. We delivered another strong quarter that exceeded our prior guidance estimates due to solid performance across both business units. The quarter also benefited from some one-time revenue in patient care and labor cost timings, as well as additional seasonality in G&A. As Chris mentioned, bookings in the fourth quarter was $14 million, down $7 million sequentially, primarily due to the timing of closing a few large deals worth a combined $6 million that is expected to close by the first half of 2025. The decline impacted mainly new business sales in both financial health and patient care. Fourth quarter revenue was $87.4 million, up approximately 2% compared to the prior year, driven by the growth in our core RCM product line in Bugle, partially offset by the divestiture of AST in January 2024 and the impact from sunset in Centric. Excluding Bugle, AST, and Centric, Q4 revenue was notably higher compared to the prior year. Financial health revenue of $54.7 million was up 7.3% compared to the prior year and represented approximately 63% of the total revenue. This revenue growth was primarily driven by a core CBO offering and approximately 2% of the financial health revenue growth came from Bugle. Patient care revenue of $32.7 million decreased 6.3% compared to Q4 of last year, driven by the impact of revenues from AST and Centric in the fourth quarter of 2023. Excluding AST and Centric, patient care revenue was meaningfully higher year over year, partially driven by one-time contract settlement and an uptick in non-recurring revenue in Q4, both of which accounted for just over $1 million combined. Total gross margins in the quarter were 53%, up 390 basis points versus the prior year and up 355 basis points sequentially. Financial health gross margins of 49.1% increased 545 basis points versus prior year, driven by viewable core revenue growth and a combination of permanent savings from cost rationalization actions and the first wave of global offshore initiative discussed earlier and some timing of labor hiring. Patient care gross margin of 59.6% were also up approximately 250 basis points year over year, primarily due to the cost rationalization actions and the uptick in one-time and non-recurring revenue. Total reported operating expenses of $40.6 million in the fourth quarter represented 46.5% of total revenue, down 670 basis points from 53.2% in prior year, excluding goodwill and intangible impairment in 2023. The decrease is driven by reductions in product development, primarily from the divestiture of AFC and lower non-recurring expenses, including severance, partially offset by the increased expenses from Google. Q4 adjusted EBITDA of 17.2 million increased 44% compared to the prior year, with a margin expansion of 580 basis points from 14% in Q4 2023 to 19.7% this quarter. As expected, we saw consistent improvement in our adjusted EBITDA margin each quarter throughout 2024, from 11.4% in Q1, 14.8% in Q2, and 16.5% in Q3, primarily driven by increased revenue in financial health, cost optimization action, and global offshore savings and one-time benefits. Normalizing for the one-time revenue in patient care and labor cost saving I previously mentioned and some seasonality in GNA, which together accounted for a couple of million dollars net impact in Q4, adjusted EBITDA margin would have been slightly more than the Q3 2024. As we head in 2025, we look to build on this momentum by continuing to find areas of efficiency, both people and non-people, and maximizing the value of the global offshore initiatives. Next, I'd like to provide a few full-year highlights. Total bookings for the year were $82.1 million, up 2.3% compared to the prior year. This reflects the decline in bookings from divestiture of AFC in January 2024 was partially offset from the full-year impact of bookings from Google. Financial health bookings of $49 million were roughly flat to the prior year, and patient care bookings of $33 million were up 6%, driven by a mix of both add-on sales and new businesses. Full-year revenue of $339.2 million were roughly flat to prior year, as growth in both financial health core revenue and vehicle was offset by the impact from AST divestitures and sunsetting centric. Excluding Bugle, ASD, and Centric, revenue would have been up moderately. Financial health revenue of $216 million was up 11.4% compared to the prior year driven by Bugle and growth in core products. Patient care revenue was 2%. $123 million, down 15.4% versus prior year. Excluding AHC and Centric, patient care revenue would have been almost flat on the year. 2024 adjusted EBITDA of $53.1 million increased 12% year-over-year with margin expansion of 164 basis points. Moving to the balance sheet, we ended the quarter with $12.3 million in cash, up $8.5 million versus the prior year, and up $3.7 million sequentially. Net debt at the end of the quarter was $159 million with a net leverage ratio of approximately three times. Finally, turning to guidance for the full year 2025, we expect Revenue to be between $345 and $360 million, and adjusted EBITDA to be between $59 and $66 million. With this guidance range, we reiterate our previously shared goal of mid-single-digit top-line growth with approximately 200 basis points of margin expansion in 2025. The 4% year-over-year revenue growth implied with the midpoint of this guidance range is driven by growth in our financial health business primarily in CBO and new offerings in patient care. For the first quarter, we expect revenue to be between $85 and $88 million and adjusted EBITDA to be between $14 and $16 million. The midpoint of the Q1 guidance range implies 4% revenue growth and 600 basis points of margin expansion versus the prior year. When comparing Q1 guidance to Q4-24 actual results, I'd like to once again point out that the fourth quarter adjusted EBITDA benefited from a couple of million dollars of one-time non-recurring items. Similar to 2024, we expect margins to step down sequentially in Q2 because of our annual client conference and merit increases with an uptick in the second half from improved operational and financial performance. In conclusion, as I reflect on my first year with TrueBridge, I'm very pleased with the 2024 results and the many improvements we implemented in 2024. In 2025, I look forward to the work we have ahead of us and continue building on this momentum, and I'm excited about the financial outlook, particularly the return to growth. Thank you all again for joining us today, and we'll now open the line for questions. Sachi, please open the line for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. The first question is from Sarah James from Cantor Fitzgerald. Please go ahead.

Hi, guys. This is Gabby on for Sarah. Can you speak to the visibility you have on closing the remaining deals that were expected to close in the end of 2024? I know you mentioned one has already confirmed for the first quarter of 2025, but just the remaining other visibility.

Yeah. Hey, Gabby, how are you? Thanks for joining. So again, we've given ourselves a little bit of runway here and said first half of the year because there's a, you know, it's not about whether or not the customers made the decision to go forward with the opportunity. There's a bit of uncontrollable aspect to it from their side that we're just kind of waiting to see what happens. You know, for instance, There's an acquisition of hospitals making another acquisition that, you know, based on some administration changes in their state government, that it's delayed the situation. So we've got just a couple of things like that happening that, again, we're outside of our control, outside of the customer's control, but still feel very positive that we expect them to close in the first half of this year. And obviously, you know, as we sit here almost through the first quarter, we wanted to give ourselves a little bit more room from that respect.

Okay, awesome. That's very helpful. Thank you. And then the sales and marketing initiatives that you mentioned, anything to call out there particularly, or do you expect those to increase in tandem with revenue increases? So where you were at in 2024 for that sales and marketing ratio looks similar in 2025.

Yeah, so obviously we're making a substantial investment in the sales and marketing front and probably more on the marketing than on the sales side. And, again, that's to increase exposure with the brand. You know, obviously in our installed customer base, so if you look at it from where we're trying to grow, the cross-sell opportunities, obviously our customers already have a great – We have a great relationship and they know what it is that we're doing. They know who we are. What we're really trying to make sure that we're doing is getting our name out in front of that 100 to 400 bed hospitals that don't run our EHR or some of our technology so that when there's opportunities, we're top of mind. Obviously, that'll be a leading indicator to the success of that initiative. will be an indicator into future revenue, probably into 2026, to be quite honest, if we're thinking about lead generation starting in the first half of the year, leading to sales in the second half of the year, which would lead to revenue expansion into 2026.

Okay, great. Thank you.

Thanks so much, Gabby.

The next question is from Sean Dodge from RBC Capital Markets. Please go ahead.

Yeah, thanks. Good afternoon and congratulations on just a great, strong finish to the year. Going back to the guidance in the bookings, Chris, you mentioned some of the deal that slipped out of Q4. If we just set those aside, if we look at what you've signed and the pipeline you've established thus far and the proportion of recurring revenue you all now have, is there any way to, from that kind of frame or quantify the visibility you have at this point in the 25 revenue guidance and then With Vinay now having been in the seat for a full rotation, the way you've established those targets, have you made any kind of change in the way those have been constructed versus years past?

Well, I'll say a couple of things, and I'll let Vinay kind of chime in on the backside of that. Obviously, the slippage of those deals in Q4 is already baked into our guidance for 2025, right? Because if we decided in Q4, we'd have gotten a little more goodness from them in this year, but obviously that's going to push out. And so, you know, the true value of those deals we'll probably see in the back half of the year and into 2026. With that said, and I think this proved out through the year 2024, our continued focus on just visibility and understanding of the puts and the takes into the business, understanding that bookings don't have a direct line to revenue as far as there's not a 90 day assumption that we can always make. There's a lot of exceptions to the rules. So I think that there is a very close marriage internally between our operations and our sales team and finance to be able to have great visibility and understanding as to when the bookings come in, how they actually translate into revenue and what the impact is on this year. I think in the past, we probably got ourselves hung up a little too much on that bookings just having a blind conversion of X days to revenue where that's just not the case. And so Vinay and team, and by team, meaning into the business units, have done a tremendous amount of work over the last year to really have a tight interlock there to have good visibility. So I think our guidance reflects both the learnings of 2024 and also the execution of the end of the year. Vinay?

Yeah. And, Sean, that's a great question. That was a lot of work that we put in last year. And as I have updated you guys on the – on the forecasting, just as a data point I'll give you, our so-called contracted revenue, contracted revenue, obviously, as you know, is, although we have a contract, these are driven with volume-based, is in the low 90s. So low 90% of revenue at the beginning of the year, I have a contract and hopefully that will play out to us. So it's the balance part that we have to go after through bookings and some short-term wins like we get. So I feel in the range that we have given, we have tried our best to capture because Now it is no longer just a finance input. We have tied up with the business to give that because that visibility helps us too. And the same is if I look at from a total recurring revenues also in the, I would say in the mid 90s. So for us, I feel tying up with what Chris said, there is a controllable aspect and a non-controllable aspect. The controllable aspect is where we are laser focused to get to the maximum, which is, Every customer delight is important. Every client has to be. That's why we identified 60 clients. key CBO clients over the next 24 months and retaining them. So far, it has been great, almost 100% in the first few months that we have had. So we just want controllable to be done at its peak. And obviously, with the scenario that Chris maintained, bookings translated into revenue will happen. But to the best of our ability, I feel we have tried to capture it in our guidance.

Yeah, and one last thing there, Sean, and by the way, thank you for the nice comments about the year and the quarter. But also, I think, you know, as we are continuing to provide guidance quarter in front, I think that that's giving, you know, as we understand the translation of those bookings, it gives us a little more, you know, comfort in how we're seeing that layout. And I think that'll be something that we definitely plan to continue so that, you know, we're still, there is still, like I said, just some volatility. And when we sign something and when we're able to turn it on and, you know, If it's an EHR customer, obviously they're already in a system that's got a contract end date on it that is going to, you know, we're a little bit held captive by that. And, you know, on the flip side, on the RCM business, you know, there could be something that's not quite as cut and dry as it just being 90 days from when we sign the contract. So I think for us to continue to provide that 90-day look I think is the best practice right now for us to continue to keep you guys on the front page of how we're seeing the year unfold.

Okay. That's great. Thanks for all the detail there. So on the 25 targets, and if we think about the revenue growth that's implied there, is there anything you can share on how we should be thinking about kind of growth among the two state or the, excuse me, the two segments? Is financial health expected to be the primary contributor? And then if we think about the patient care side, is that kind of, maybe flat up low single digits. Is that kind of directionally the way you see things playing out for the year?

Yeah, I'll try. I know that Sean, you would have asked this question, so I'll try my best to answer it in my prepared. So this is, you're absolutely right. Financial health, we expect to have higher growth than the one average that we have presented on both. But we do expect to see a low single-digit growth in patient care, too, primarily from some of the new products that we introduced last year, like the multi-view that we mentioned. We have seen some good traction on that. And then the analytics one. So if you take the average of it, RCN or financial health would be higher, and patient care would have low single digits, lower than that average.

Okay. Sounds good. Thanks, and congratulations again.

Thank you. Thanks, Sean.

The next question is from Jeff Garrow from Stevens, Inc. Please go ahead.

Yeah, good afternoon. Thanks for taking the question. Maybe start a little bit more on the bookings number and the demand environment. I was hoping you could tell us a little bit more about some of the secondary metrics like pipeline metrics length of sales cycle and win rate to put some more context on the current demand environment. And I appreciate all the transparency on the timing related issues that you saw in Q4.

Yeah. Hey, Jeff, how you doing? So what I would say, you know, from a pipeline standpoint, We see, I would say, maybe about 40% of our bookings in a quarter are opportunities that actually open and close in that quarter. So looking at it from the historical size of the pipeline, there's always an influx that comes in that we're seeing. you know, really kind of continue to play out. That's something that we've been tracking over the last several quarters and that continues to be something that, you know, is an aspect to it. You know, going back to the prepared comments when we talk about the no decision, I think that that's something that we're going to continue to focus on from a, you know, obviously there's interest. If we're getting to something where we call it a, you know, qualified lead that we have put into our pipeline, and then we close it as a loss, but we close it as a loss to no decision. You know, I think that just goes to the sentiment of people are deaf. And I would say the vast majority of those opportunities are in that CBO space, the full central business outsourcing opportunities. And it's just an opportunity for us to continue to push on the value that we're selling and making sure that we're doing our level best to get the customer comfortable with giving this piece of the business away. And that once they get comfortable with that, that we're the ones that they give it to. You know, I think it's consistent with what we continue to see is that, you know, regardless of what poll you look at, the business office remains to be one of the top priorities for hospital leadership and providers. It's just still something that, you know, we have this additional hurdle that we've just got to keep pushing to get them over, keep working with our sales team to really drive the value so that we see more of those no decisions turn into wins.

Appreciate it. And just to follow up there, you speak to the win rate and the no decision being the kind of most frequent unfavorable decision, but maybe you could speak to win rate when there is a decision made with others involved.

Yeah, so that number is north of 50% when we removed that, when we removed the no decision. So when we're, and again, that's either they made the decision to keep it in the house or that, and that's an affirmed decision versus just no decision and pushing it down the road. or that there was a loss to a competitor. So I still feel like we've got a really good batting average. We'd always like to see that go up. But I also think that it's as much about the at-bats, right? And so that's why we talk about the investment that we're making on the marketing front. to continue to get our name out there and to be very pointed at the marketing efforts that we're making, a more account-based marketing approach so that we're getting our team more at bats. And so, you know, that five to 600%, you know, winning percentage that we'd like to see that, you know, play out over 200 at bats versus 100 at bats. And that way we have two opportunities to win.

Makes sense. I appreciate that detail. And then I want to ask one more about the renewals looming here in 2025. How does that number of 60 compare to a typical year? And then I need kind of outsized larger clients in that 60 and just the pacing of those decisions. Anything you can tell us about kind of seasonality back half year? versus first half of the year as we think about potential for those decisions to impact your financial performance here in 2025.

Yeah, so I'll start. And just as a reminder, I think we said this, the 60 that we put kind of a box around is actually going to play out over the next 24 months. So they're all not making a decision this year. But, you know, we landed on that number based on either there was a renewal date this year or they're a strategic customer that we wanted to make sure that was in that box. First wave of global transition that we're making sure that we're focused on client delight for that level of customer. What was the second part of the question?

Sorry, Sean, I got lost there. You're all good. You're a multi-parter. I want to ask if there's any kind of outsized larger clients in that 16. You just referenced the strategic customers. And then kind of the pacing of decisions over the next 24 months, any particular weighting we should be aware of?

Yeah, so on the first answer, there's no real, you know, we did lose a customer a few years ago that was outsized as it related to the rest of the base. You know, the good and bad news is that we don't really have that high concentration, high volume now, obviously. As we're pushing into the 100, 400 bed deals, we may see that start to pop up. But right now, I would say they're all kind of equally laid out.

Go ahead. So there is no outsized customer like last time. It's a very diversified base that we have. And secondly, from timing of these renewals, they are, like, reasonably spread out during the year. It's not like... like in one quarter, most of them, it's all throughout the year. So that's why we have put this together with the team to make sure we bring the customer delight to where it actually matters with making sure these renewals are taken care of and then upsize as we go up forward.

Great. Thanks for taking the questions. You bet. Thanks, Jeff.

The next question is from George Hill from Deutsche Bank. Please go ahead.

Hey, good afternoon, guys. Chris, you gave me a lot of things to lead into. I guess, Chris, I have three, if you guys will give me that much leash to hang myself. First is on the bookings slipping out of the quarter, do you feel like they were deals that just slipped out of the quarter? Or my macro question is, are you seeing something as it relates to the lengthening of sales cycles, do you feel like?

You know, it's a good question, George. And I would say, you know, putting this into the prepared comments, I do think that there is a bit of uncertainty right now about what's going to happen. You know, you can't turn on the TV right now without seeing, you know, what's going on in Washington. And, you know, if you just look at it from a numbers standpoint, you've got to think that health care is on the radar of, you know, the potential cuts that they're going to make. And so I do think that there is a bit of a slowdown that's happening. I don't think it's causing a stop, but I do think it's causing a bit of a slowdown. As it relates to those three deals, again, they're very specific reasons why they slipped. So I don't think there's like a global slash macro environment that we're seeing play out from that respect. It's encouraging for us to continue to, as much as I hate to say it, it's encouraging to hear that there's continued pain. But there's continued pain at the provider and hospital level from a, you know, just reliability and stability from a collection standpoint. And just making sure that those dollars are coming in, that they've got staff able to do it, and that they can do it at a cost that they can work with. So I do think that we're still on the right topic. We've just got to keep driving to what's going to push them over the line. So, you know, we're going to be patient this first year or the first half of this year is, you know, kind of whatever happens in Washington plays out. But that doesn't mean that we won't still be out there pushing on our team to make sure that we're getting in front of the opportunities that are there and making sure that we can get to a number that we feel good about to deliver on the 25 guidance.

Okay. And then, Vinay, I would go in with one to you, which is, like, if we think about these 60 renewals in 2025, are we thinking about these – first thing, are we thinking about these renewals as kind of positive or negative pricing opportunities and kind of putting the renewals in the context of, like, the lengthening sales cycles question I just asked Chris is, like, how do we think about which part of those come due in 2025, contribute in 2025, And if there's slippage, risk to 25?

So we have, it's a great question, George. Let me compliment you. Because there are some parts of it which are due during the year. And how we normally take is when it's something which is under contract, it has very high probability that we'll get the revenue, obviously. it's a volume based it can go up or down a little bit but once that are once it comes due and then it's up for renewal um there is a i would say a larger chunk is for 26 a smaller part but dollar value wise, we have tried to not assume almost 100% will come in. So we have assumed our own best guesstimates at this time to just make sure we can cover some of the slippage if happens. But to answer your question, after because these contracts comes anytime during the year, post that, that's where if the renewals doesn't happen, it will carry a risk and to the best of our ability, we have captured that in our guidance.

Okay, that's helpful. I have more long-winded questions that I guess are not as smart as that last one, so I'll circle back with you guys. Thank you.

Thanks, George.

The next question is from Jean Manheimer from Freedom Capital Markets. Please go ahead.

Oh, thanks. Congrats on the quarter of the year, gentlemen. I had just two. When you think about your EBITDA guidance, You know, it's pretty strong above consensus while your revenue guidance bracketed consensus. Where would you say the bulk of that over-attainment is coming from if you could rank it, say, in the top three? You have improved revenue. You have a view goal. You have your cost initiatives. How would you characterize it?

So the two parts, and Jean, so nice to hear from you too. So the two big parts is for us is the same one that we carried last time. We would, our post-rationalization initiatives will obviously kick in here. The global offshore will contribute. Patient care, slight growth will contribute, and then the overall piece that you look at from the financial health. So it's a mix of all that four, but the exit of 24, also the momentum helps us to carry that through. And what we tried to capture in the guidance, you're absolutely right that the analyst, that the consensus was reasonable on the revenue, but I think they were under on, but it was also at a time where we had not overperformed. So the overperformance of our Q4 gives us the momentum to carry it through. So that is some of it. Plus, we have tried our best to build enough maniacal focus on vendor and people that we would like to get maximum out of it. So that's why this range reflects higher than the consensus.

That's great. Nice job on that, Vinay. Thank you. And just on the revenue, HaitianCare, I think you mentioned that you're focusing on converting the balance of your clients to SaaS over time. And I'm wondering if that would create a meaningful drag on revenue growth as you convert from those license maintenance to pro rata revenue recognition.

Not too much because today we get support revenue from them. which is not lumpy. And tomorrow we will get a SAS revenue from them. So the only piece we just have to make sure the pricing and all because pricing as a lever is being trying, we are trying to bring it into our DNA. So I don't feel it will be a drag, but also it won't be a significant boost to our revenue. But what we expect is it gives longer term and more predictability. That's what we are looking for.

Yeah, and again, I think it's about, it is just that. And an example is, last year we had some products that were released on the patient care side that had some one-time benefits. And while that's great for the year, it obviously creates a step for us in 2025 to see growth off of that. And so I think as we're continuing to roll out new offerings, the idea of driving the customers to a SaaS model creates that very smooth revenue recognition and visibility into the future versus, you know, we get some nice one-time pops that then we've got to go figure out how to recreate that in the next year. So I'm excited about the investments that we've made in some of these new offerings and using that as kind of the leverage to keep pushing our customers to that SaaS model or even, you know, ideally having them go in the interest model where we're bringing in the financial health and RCM solutions as well.

That's great. That makes sense. Thanks a lot.

You bet. Thanks so much, Jane.

There are no further questions at this time. I would like to turn the floor back over to Chris Fowler for closing comments.

Thanks. And as always, thanks to all of you for your continued interest in TrueBridge. We look forward to sharing our progress and success with you throughout this year. Thanks and have a wonderful week.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.