TruBridge Q4 2025 Earnings Call - Strategic review, modest revenue growth and 200 bps EBITDA lift amid pipeline rebound

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

Chris Fowler, President and Chief Executive Officer, TruBridge: Thank you, John, and thank you, Drew, and thank you to everyone for joining us today to discuss our full year and fourth quarter. Before discussing our results, I would like to address two topics. First, we filed our 10-K with the SEC in compliance with the extension period. As we disclosed earlier this month, we identified certain out-of-period adjustments during final audit procedures with our new external auditor. As a reminder, this is our first year-end audit together. These adjustments are primarily related to revenue recognition and related costs, capitalized software development costs, and non-routine transactions. I want to emphasize that these adjustments are non-cash and not material to our fiscal 2025 financial statements or to our previously issued financials. While the delay was frustrating, this process reflects our commitment to strengthening our financial reporting standards and our internal controls.

Secondly, as you may have read in the 10-K, over the past several months, we have been engaged in a strategic review process considering a range of alternatives to maximize shareholder value. We will provide additional information as appropriate. As a result, we are not issuing formal guidance today, but we expect to achieve modest revenue growth in 2026 and anticipate approximately 200 basis points of improvement in Adjusted EBITDA margins. Turning now to an overview of the numbers for the fourth quarter and full year 2025. Total revenue for the quarter came in at $87.2 million, in line with the midpoint of the revised guidance we provided last quarter. Adjusted EBITDA of $19.2 million was at the high end of our guidance range and represented a slight expansion in margins compared to the prior year.

For the full year, our total revenue was $346.8 million, a 1.4% increase over 2024. Adjusted EBITDA was $68.7 million, up 23% year-over-year. In terms of free cash flow, we generated $20 million for the year, an increase of $5 million over 2024. Bookings of $19.8 million on a total contract value basis compared to $15.5 million sequentially at $14.3 million a year ago. In Q4, our bookings were supported by growing SaaS, strategic partners, including Microsoft and our exclusive Dragon Copilot integration with TruBridge EHR and continued demand for our comprehensive revenue cycle technology and services platform. The pipeline we see today is encouraging and gives us confidence that our market is an environment of healthy demand.

As a proof point, the dollar value of our overall sales pipeline is currently the highest it has been in 9 quarters and has increased 53% since the beginning of Q3. The increase we are seeing is diversified across our business. If I compare the pipeline today to earlier last year, approximately 14% was from opportunities greater than 100 beds, and that segment is 30% of the pipeline today. At the same time, we are improving the quality of the opportunities. The percentage of recurring deals represents greater than 70% of the pipeline compared to one-time projects, a noticeable improvement from approximately 57% last summer. Additionally, our higher margin encoder solutions continue to gain traction. During this period, encoder pipeline growth increased 74%, driven primarily by strong performance in new business and our channel partner ecosystem.

We are confident that between our new leadership team and regionalized coverage model, we expect to see successful conversion of this growing pipeline and healthy demand environment. While we may be a quarter or two away from consistent quarterly performance, our commercial engine is on the right trajectory, and we expect to see continued improvements down the road. I’d like to take a minute to talk about customer retention, specifically Financial Health, and how it has acted as a headwind to us and the actions we’ve taken to begin to mitigate it. We started our global workforce transition in earnest in 2024. Now, over the course of the year, we saw a decrease in retention in our CBO customers as the onshore and offshore teams figured out how to work best together.

In 2025, we took several decisive actions to strengthen the process and simplify it for the customers. One key action was bringing in the necessary experience in managing global teams and executing successful transitions. Earlier last year, we implemented a more structured transition model with stronger oversight, better visibility into performance across the full transition cycle, and deeper collaboration with the customer. It is still early in the process, but we are seeing progress in the results so far and believe that the operational model is repeatable. Additionally, we opened our new Global Capacity Center, or GCC, in Chennai last month, which represents a significant milestone for our cross-shore global delivery model. With all this in mind, we will continue to monitor progress, and our transition initiatives will be interlocked to our continued performance improvements. We are also focused on our comprehensive AI strategy.

We are currently pursuing four pillars that span our entire organization. Financial health, patient care, customer service, and internal development. On the financial health side, we are working on a solution to predict claims denials earlier and more accurately, and taking the corrective action to get the claims approved on the first pass. In patient care, we are leveraging ambient technology through partnerships with Microsoft. In a pilot that we are running at a regional hospital, we are already seeing results with providers spending more time interacting with patients and meaningfully less time documenting the interactions. We are pleased with the response from HIMSS attendees a few weeks ago and are excited to showcase this next week at our national client conference.

In terms of customer service and satisfaction, on a previous call, I mentioned an internal AI-driven support bot, which has already demonstrated improved support consistency and faster turnaround. We are developing a customer-facing release that will enable clients to directly engage with the chatbot experience through an expanded and improved knowledge base. This enhancement is aimed at significantly increasing self-service efficiency and improving overall customer experience. We will, however, continue to offer live customer support for those that choose that route for their customer experience. Finally, in terms of our tech stack, we are leveraging AI tools for development to modernize our underlying technology, which should lead to rapid innovations, faster delivery of applications to the customer, and simplify new customer implementations and continue to drive margin expansion.

In conclusion, as we continue to make the necessary changes in the business, we see positive progress and remain on the right forward trajectory. Given our targeted AI strategy, strong cash position, and net leverage ratio of approximately 2x, we are well-positioned to compete and will continue evaluating all available strategies to drive shareholder value. Now I’ll turn the call over to Vinay to review our financials. Vinay?

Vinay, Chief Financial Officer, TruBridge: Thanks, Chris, and good afternoon, everyone. I will begin by noting that we filed a 10-K today. As Chris mentioned earlier, during the preparation of the financial statements and through our continuous process improvement efforts, we identified some material non-cash misstatements primarily related to the timing of revenue for some products and associated contract costs, capitalized software, and certain other non-routine items. We have revised these prior period financials to reflect them in the appropriate period, and these adjustments can be found in the 10-K filed today. While this resulted in a slight delay in our earnings timings, we believe it was the prudent step and reflects our continued focus on strengthening our financial reporting and controls.

Today, I will provide update on our 2025 strategic finance priorities, review our fourth quarter and full-year financial results, provide additional insights into segment performance and profitability trends, discuss our cash flow generation and balance sheet progress. First, an update on our financial initiatives and overall progress in 2025. This year marked meaningful operational and financial improvement in the health of the business. As Chris mentioned, it was highlighted by the continued margin expansion and strong free cash flow generation in 2025 and over the last two years. Firstly, I’d like to highlight the investments we are making in improving our finance function. Over the past two years, we have been strengthening the finance team and continuing to improve our processes and controls. Further, mid last year, as part of our ongoing commitments to governance and financial rigor, we appointed a new external auditor.

As a result of this partnership, we are accelerating process improvements in many areas, including progress towards remediation of the material weaknesses. As an example, we are already seeing the benefits from the investments we have made in building our in-house code to cash centers of excellence team and continue to further strengthen processes with additional internal and external resources. Next, a core focus throughout the year has been improving cash flow from operations. For the full year 2025, cash flow from operations was $37 million, an increase of 19% year-over-year, driven by stronger profitability, improved working capital management, and continued discipline around expenses. Further, we have also maintained a disciplined approach to capital allocation during the year.

By prioritizing investments with highest returns and carefully balancing growth opportunities, we were able to reduce gross CapEx in 2025 while continuing to support strategic needs of the business. Free cash flow, as defined as cash flows from operations adjusted for CapEx, was $20 million, an increase of approximately $5 million year-over-year. As a result, we ended the period with a solid liquidity position, providing additional flexibility to continue investing in the business while also supporting balance sheet objectives. Further, we also strengthened our financial position through disciplined debt reduction, lowering net debt by approximately $19.5 million year to date and improving our net leverage ratio to 2x.

This marks the fourth consecutive quarter with net leverage below 2.5x and a significant improvement from over 2x in Q4 2023, underscoring our consistent improvement in balance sheet improvement and capital efficiency. Further, as cash generation continues to build, our approach to capital allocations remains disciplined. We are constantly evaluating the best users of capital, including share buybacks and organic investments in order to drive value for all stakeholders. We are also very excited to announce that in November 2025, we entered into an amended and restated credit agreement with our syndicated lending partners. The new agreements include the 5-year term that expires in 2030 with up to $250 million in credit facilities. This financing extends our maturity profile, provides very attractive overall cost of capital, and provides additional liquidity to support both our ongoing operations and strategic priorities.

Finally, margin expansions remain central to our long-term strategy, and we continue to see expansion of Adjusted EBITDA margins in 2025 by 350 basis points, driven by cost optimization initiatives and disciplined expense management across the organization. The improvements were primarily realized across IT, cloud operation, vendor optimization, and Patient Care support, where we applied a strong return on investment framework and leverage automation to streamline workflows and improve efficiency. Over the last two years, Adjusted EBITDA margins have expanded by more than 650 basis points from the combination of global workforce transition, targeted cost optimization actions and efficient revenue growth. Now turning to our fourth quarter results in more detail.

Bookings in the fourth quarter were $19.8 million on a TCV basis, up $6 million compared to prior year and up $4 million sequentially, providing continued commercial momentum as we head into 2026. Fourth quarter revenue was $87.2 million, a decrease of approximately 1% compared to a year ago. As a reminder, the year-over-year decline in Q4 2025 included approximately $1 million from the sunset of Centriq product in the Patient Care business. Normalizing for this total revenue growth would have been about a percentage point higher with revenue roughly flat to prior year. Financial Health revenue totaled $56.2 million and approximately 65% of the total company revenue represented an increase of 2% year-over-year, primarily due to strong growth in the Encoder business.

Patient Care revenue was $31 million, reflecting a 6.6% year-over-year decline, primarily due to the sunset of the Centriq product. Total gross margins in the quarter were 53%, flat versus prior year and up 120 basis points sequentially. Financial Health gross margins improved to 50%, an increase of 65 basis points compared to the prior period, driven by the continued impact from our offshore transition as well as other labor efficiencies and ongoing process improvements. Patient Care gross margin was 59%, down 75 basis points compared to last year, primarily due to revenue mix and timing. Adjusted EBITDA for the quarter was $19.2 million, with a margin expansion of 160 basis points from 20.4% in the fourth quarter of 2024 to 22% margin this quarter.

The consistent quarter-over-quarter improvement reflects both stronger gross profit performance and continued execution against our cost optimization initiatives. As these structural improvements continue to scale, we believe there remains opportunity for additional margin expansion going forward. Now I’d like to provide a few full year highlights. Total bookings for the year was $82.9 million on TCV basis, up 1% compared to the prior year. On ACV basis, total bookings were $70.9 million. Our full year revenue of $346.8 million increased 1.4%. Financial Health revenue was $221.7 million, was up 2% compared to the prior year as growth in CBO and Encoder businesses from revenue generated from bookings was partially offset by client attrition and slower growth in other products. Patient Care revenue was $125.2 million roughly flat versus prior year.

Excluding the impact of Centriq Patient Care revenue growth would have been about 4% driven by SaaS bookings and new customer implementations. Adjusted 2025 Adjusted EBITDA of $68.7 million increased 23% year-over-year with margin expansion of 350 basis points, reflecting gross margin improvement through improved productivity and cost actions with disciplined cost management. Moving to the balance sheet, we ended the quarter with $24.9 million in cash, more than double the $12.3 million we exited 2024, driven by improved earnings conversion and disciplined working capital management. Net debt was reduced to approximately $139.8 million, and our net leverage improved to 2x, marking our strongest leverage position in several years. With accelerating free cash flow generation and a strengthened liquidity profile, we are well positioned to continue deleveraging and enhancing financial flexibility into 2026.

As Chris mentioned, while we are not providing formal guidance due to our strategic review process, we remain confident that we can achieve modest revenue growth in 2026 along with continued Adjusted EBITDA margin expansion of approximately 200 basis points.

Chris Fowler, President and Chief Executive Officer, TruBridge: In conclusion, I’m pleased with the operational and financial progress that we have made across the organization over the past year and look forward to keeping you up to date on our continued progress. Thank you. I will now turn the call over to John for questions.

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you’d 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 comes from the line of Sean Dodge with BMO Capital Markets. Please proceed with your question.

Sean Dodge, Analyst, BMO Capital Markets: Yeah, thanks. Good afternoon. Vinay, you mentioned the outlook for the year being modest revenue growth. I guess just in context of the new bookings metric you’re providing with the annual contract value, could you give us just a quick tutorial on how to use that to kind of better understand your visibility there? Do we take, like, recurring revenue from 2025, is that the baseline? Then we assume some type of client churn and then layer in the ACV bookings? Is that the right order or am I missing a step or an assumption in there?

Vinay, Chief Financial Officer, TruBridge: No, I think you’re on the right track. Like you said, the recurring revenues and some assumption of bookings at conversion. Because as you know, bookings have the same, you can apply some formulaic view of how bookings translate into revenue and attrition. I think that’s the right way of doing it.

Sean Dodge, Analyst, BMO Capital Markets: Okay. The comments on customer retention on the RCM, the CBO side, Chris, you mentioned making some improvements to that process. Did your retention rate in Q4 continue to improve? If you could just frame the number of renewals that you had in 2025 for the full year, how will 2026 compare? Do you have a similar number of contracts renewing this year as you did last? Or is it more or less?

Chris Fowler, President and Chief Executive Officer, TruBridge: It’s not quite as many that we have kind of in the target of as it relates to the transition and then, you know, where we’re paying that close attention to make sure that we’re not putting ourselves in a spot of bother. What I would say is that, you know, going back to your first question, that it’s the continuation of some of the attrition from 2025 that’s playing into 2026. You know, a modest improvement to flattish improvement over that number. That’s where we come back to with the bookings performance and with that continued kind of muted success on the retention side, then that we see that modest growth year-over-year.

Again, we’re focused on making sure that we’ve got the process right and making sure that as we continue to transition customers, that we’re paying attention to the metrics that matter the most, the cash in the door, the communication with the customers, that we have not impaired their operations as well, just not just from a cash perspective, but also the day-to-day operations. Let that kind of be our guide as the throttle for the transitions going forward. Again, we feel good about the progress we’re making, but we want to continue to make sure we’re measuring as we go.

Sean Dodge, Analyst, BMO Capital Markets: Okay, great. On the strategic review, I know there’s a lot you can’t talk about with that, and I know there’s a wide range of outcomes there. I guess just any indication you can give us on timelines. It sounds like it’s been underway for a while. Is there a point in time or date you expect to communicate to us what you decide to do or not to do?

Chris Fowler, President and Chief Executive Officer, TruBridge: I’m gonna do my best to not be tongue in cheek here, Sean, but you kind of answered the question at the top. Very limited. What I would say is right now, we do not have a timeline on this, to your point. I think the board’s being super thoughtful about this. Again, you know, with the focus of shareholder value as the guiding light to the process and making sure that it’s more about getting to the right outcome as it is about hitting a certain deadline.

Sean Dodge, Analyst, BMO Capital Markets: Okay. Great. Thanks again for the time.

Chris Fowler, President and Chief Executive Officer, TruBridge: Thanks, Sean.

Operator: The next question comes from the line of George Hill with Deutsche Bank. Please proceed with your question.

Maxine, Analyst, Deutsche Bank: Yeah. Hi, it’s Maxine for George. Thanks for taking the question. So we’re seeing a lot of volatility in bookings and annual contract value over the past few quarters, and you talked about more larger deals in the pipeline. How should we think about the conversion timing into revenue, and how has implementation duration or client ramp changed? Are there any capacity constraints at this point? Thank you.

Chris Fowler, President and Chief Executive Officer, TruBridge: Hey, thank you, Maxine. There are no capacity constraints. You know, we still are in a situation where our bookings, we’re a little bit at the mercy of the customer for the timing. The capacity is typically not on our side. We’re typically looking for ways to accelerate that with the customer and making the entry into the service or the technology more efficient. You know, as a basis, typically the technology that we’re putting in, if it’s a replacement technology, then there is a contract term that the customer is working out of that they’re not gonna wanna double pay for something. We are, again, sort of at the mercy of what those contracts are.

On the services aspect of things, typically it gets down to sometimes it’s politics at the facility of how the onboarding and off-boarding of the staff that’s doing the current work at the facility plays out. We continue to be mindful of how we can do a better job of representing the bookings impact into the run rate and how we can be more thoughtful for you guys to understand how that plays out. I would say as we continue to work through this year, that’s something that we may try to get better at.

Maxine, Analyst, Deutsche Bank: Got it. That’s very helpful. I just have a quick follow-up. Given margin expansion is primarily cost driven, how much incremental opportunity remains versus what’s already being realized? Are we getting close to peak margin after achieving the 200 basis points improvement target this year?

Chris Fowler, President and Chief Executive Officer, TruBridge: You know, I hate to kind of be a little bit futuristic with this, but I think that we’re. You know, you heard me talk a little bit about AI in the prepared comments, and what I would say is we’re continuing to look for opportunities for efficiency and better outcomes based on the availability of AI in the different pillars that we discussed. From a development standpoint, us being able to accelerate our roadmap and be able to deliver our products faster to our customers, which drives revenue, which drives margin. Also being able to use it on our RCM services side to be able to return cash faster to our customers. You know, I don’t think we’re at the end when we hit that 200.

You know, I don’t know where the ceiling is. We’re gonna continue to keep pushing and leveraging both the staff that we have and also the technology that’s available, and we’ll continue to keep updated, keep you updated on the progress there.

Vinay, Chief Financial Officer, TruBridge: I’ll just add one more thing. While cost is obviously the biggest driver, vaccine revenue mixes also will play as technology solutions like Encoder keeps picking up. Those are at very higher margins than our services business. While the big needle mover in the past has been cost, but we keep a close eye on the revenue mix because that could be a big contributor as we keep going. As Chris said, we still have more room to grow here.

Maxine, Analyst, Deutsche Bank: Got it. That’s very helpful. I’ll hop back in the queue.

Chris Fowler, President and Chief Executive Officer, TruBridge: Thank you.

Operator: The next question comes from the line of Jeff Garro with Stephens. Please proceed with your question.

Jeff Garro, Analyst, Stephens: Yeah, good afternoon, and thanks for taking the questions. Wanna start with a strategic question and ask if you could give some comments on how you currently see the strength of the business from combining Patient Care and Financial Health and opportunities or synergies that you see from that combination beyond just having the overhead scale of having both of them under one roof.

Chris Fowler, President and Chief Executive Officer, TruBridge: I’ll take a stab at that, Jeff. First of all, condolences on the heartbreaker with Duke. That was an unbelievable shot. To get to your question, to me, you know, we’ve talked about this in the past. I think there is such an interconnectivity between the relationship and the foundation that we have built with the rural community customer base, with the EHR, and how we’re able to use that as really kind of the platform that we can grow from. You know, I think as we continue to advance the technology in the EHR, you know, we are focused on that hundred beds and under space. I think that there’s room for us to expand there, and I think there’s natural expansion in that customer base for the RCM services as well.

When we look at this strategically, I think it is about how those two pieces together can continue to fuel the growth in the rural and community market going forward.

Jeff Garro, Analyst, Stephens: Excellent. I appreciate that and appreciate the condolences. It’s gonna be a multi-month mourning period here. Wanna go to the forward view, and you understand the lack of formal guidance, but wanna see if there’s anything that, Vinay, you would wanna call out from FY 2025 that won’t repeat, as well as ask about whether there are items from Q4 that you would call out as appropriate to annualize as we look forward into 2026. Then just lastly, the catch-all. Any general comments on visibility that you see for the business relative to prior years as we look ahead?

Vinay, Chief Financial Officer, TruBridge: That’s a great question. I like, I’m bound a little bit on not giving too much on the guidance and all, but what I would say is you know this business better than I do also, Jeff. We will continue to have some seasonality of some of the revenue streams and the timing of bookings. That part will keep on, might be more there. I think as what Sean mentioned, looking at our bookings and attrition, I think modest revenue growth is what we have factored in. I won’t say like there would be significant changes from the past. Yeah, some seasonality will play obviously quarter to quarter.

Jeff Garro, Analyst, Stephens: Great. I appreciate that. One last one, if I could sneak it in. You know, so some really helpful commentary around the pipeline and some of the metrics you gave there. Really great to see that. Want to ask about kind of your plan for pipeline to bookings conversion and specifically around the impact of your new commercial leader. Given the growth in the pipeline, you know, some of that pipeline building must predate him, but he has a great set of experience and probably has some good plans on converting that pipeline to bookings. Wanted to ask you to dive into the weeds a little bit there. Thanks.

Chris Fowler, President and Chief Executive Officer, TruBridge: Yeah. Good question again. You know, what I would say is, you know, the pipeline growth that we have seen really is attributable to the new team that we have in place now, right? And their new approach to the process. The first step is really making sure that we’ve got that pipeline built so that we have more shots on goal to make sure that we flatten out the consistency of the bookings quarter over quarter.

We’ve done that we’ve seen the pipeline increase, and now I think over the next quarter or two, we should start to see the size of the pipeline also smooth out through the top to the bottom of the pipeline really so that the funnel is kinda evenly scattered so that we have the ability to make sure that we’re putting up those consistent numbers quarter-over-quarter versus what you’ve seen, you know, over the last several years, where we have good quarters, down quarters, and you kinda see that yo-yo. The goal is that we’re trending up, but that we’re also smoothening it out just a little bit, which allows for us to be a little bit more predictable kinda in all parts of the business. I think that that’s the second phase from the commercial team transformation.

First getting that pipeline built, now it’s about making sure that we’re pushing it all the way through. I’ve been real pleased with how they’ve worked through making sure that the integrity of the opportunities in the pipeline is there, and that also, and I think we called this out on the script, that the quality of the pipeline has also improved so that we’ve got much more recurring revenue, and also focused on some of those larger opportunities. We’re starting to see those pop. Again, the credibility of the story that we’ve had from the beginning of we think that there is a tremendous market and opportunity in this space for the services that we provide, now we just need to see the pipeline pay off in the coming quarters.

Jeff Garro, Analyst, Stephens: Excellent. Appreciate all that context. Thanks again for taking the questions.

Chris Fowler, President and Chief Executive Officer, TruBridge: Thanks, Jeff.

Operator: The next question comes from the line of Sarah James from Cantor Fitzgerald. Please proceed with your question.

Sarah James, Analyst, Cantor Fitzgerald: Thank you. I wanted to go back to your earlier comment on the Financial Health products. You were talking about rolling out solutions that predict claims and claims denials earlier and more accurately than they have in the past. Can you tell us a little bit more about that? Any KPIs you can share, timelines of launches of waves of the product? Thanks.

Chris Fowler, President and Chief Executive Officer, TruBridge: Yeah, absolutely. Welcome back, Sarah, and glad to have you on the call.

Sarah James, Analyst, Cantor Fitzgerald: Thank you.

Chris Fowler, President and Chief Executive Officer, TruBridge: We have in a pilot format some of our technology in the field. I think it’s important to say this is homegrown. We have built this internally. We are experimenting, I would say. If we’re looking at it in the baseball parlance, I would say we’re in the very early innings on this initiative. The mindset is that because we have the full RCM technology suite, we have the remit information from 835s, we have the claim status information from the 276/277 transactions that go out. We have this not just for the customers we do the billing for, but for the customers that we do just the claim submissions for as well.

We have a great database of information to be able to train the models, and right now we’re in that training phase with a handful of code sets on a handful of customers. Right now we don’t have any KPIs because it’s still in a learning phase. The goal is that we continue to take the information that we have from the front-end edits, from the back-end remits, and continue to winnow that down so that on specific rejection codes that we receive, denial codes that we receive, that we’re flagging those early, with an opportunity to be able to really have an impact on the number of denials that we’re having to manage. You know, that’s really I think the opportunity.

You know, I would say in general, probably 80%-85% of claims are going through and getting paid once they go through our edits. Now there’s an opportunity for 15% of the claims to be improved. I think that’s the area that we’re looking to really kind of make an impact on. And the real part about it too is that the work to get those corrected and then back through the system is an arduous process because it can take hours on the call with the insurance payer and then work back with the customers to get the information, the documentation right, and it just creates this vicious cycle. We’ve let the claim go out the door, so it takes 30-45 days to find out that it was gonna get denied.

It’s definitely our priority from the RCM side that this is. It might be the most difficult, but I think it has the highest opportunity for return for us from an efficiency and satisfaction for our customers. More to come there.

Sarah James, Analyst, Cantor Fitzgerald: That’s great. One more. As hospital systems are trying to manage through eAPTC expiration and what that implies for margins, are you seeing the way they purchase products change or having conversations that over the next year or two it might, whether that’s wanting more integrated solutions and less point solutions, or if it’s focusing on faster ROI versus long-term ROI? Like, how are you seeing the demand change given the regulatory environment for providers?

Chris Fowler, President and Chief Executive Officer, TruBridge: You know, it’s a good question, Sarah. What I would say that people are definitely focused on impact, right? That they definitely want that return. I think that the world is clamoring for, you know, because you’re now using ChatGPT or Claude personally, I think that people are expecting to see that show up and provide them relief in their work world as well. You know, if you go back to the press release that we issued last week with our customer, the New Mexico Artesia, you know, what you’ll see is that it’s generating 50%-75% less time documenting for our providers, which is a huge number, right? It hits in a couple places from a return standpoint. It provides provider satisfaction.

It allows that provider to be more attentive to the patient and provide a better quality of care and hopefully a better outcome for that patient. It also frees up capacity for that provider to see more patients, which ultimately drives more revenue. I think those are the things that our customers are looking for and customers in general are looking for in healthcare. It’s about how do we build and partner with more opportunities to deliver something like that.

Sarah James, Analyst, Cantor Fitzgerald: That’s great. Thank you.

Chris Fowler, President and Chief Executive Officer, TruBridge: You bet. Thank you, Sarah.

Operator: The next question comes from the line of Ryan Halsted with RBC Capital Markets. Please proceed with your question.

Ryan Halsted, Analyst, RBC Capital Markets: Hello. Thanks for taking my questions. I guess, starting with, you know, the hospital end market and some of the regulatory changes that are impacting them. I think, you know, one of them is the Rural Health Fund that, you know, represents a potential opportunity for you guys. I’m just curious if you’ve had any, you know, better visibility into what that fund could mean for some of your customer bases, and if you’ve had any conversations about, you know, maybe even being a part of how that funding could be spent.

Chris Fowler, President and Chief Executive Officer, TruBridge: Absolutely, Ryan. Thank you for the question. So yeah, we are 100% locked in on helping our hospitals get into that $50 billion fund and make sure that it’s actually providing value for them. You know, the way we’ve kinda characterized this internally is that it’s a Meaningful Use opportunity again, yet that has a real impact to satisfaction and good outcome for the providers, for the patients and for the vendors as well. You know, we announced, I think you may have seen this a few weeks ago, that we were selected by SAIC to be their preferred partner for the EHR and RCM technology and their alliance around the rural healthcare, which, you know, is really helping hospitals and states tap into those funds.

I would still say this is early stages now. We’re starting to see RFPs go out, but each state really has their own latitude to kinda help decide, drive what are the initiatives inside of their state that they need to fix, which I think is actually pretty elegant because the needs of Mississippi and the needs of South Dakota aren’t necessarily the same. I think giving that latitude back to the states is great. Now, the challenge to some extent is that that gives us 50 different strategies that we’ve got to kinda line up with and see where we can play and be helpful. The good news is we are gonna see some commonalities across that.

We are definitely, as an organization, very much focused on making sure that we are at the table with our customers, at the table with the states, to be a part of shaping the use of that $50 billion and making sure that it’s providing a positive impact and a good outcome.

Ryan Halsted, Analyst, RBC Capital Markets: That’s great. That’s helpful. Then maybe turning to AI, I think it was helpful to hear how you’re deploying it both externally and internally. You know, but I know certainly a lot of attention is being paid to some of your competition, both across Financial Health and Patient Care. I’m just curious if you’re seeing any sort of changes in terms of your competitive landscape from, you know, larger incumbents maybe becoming a bit more nimble in terms of you know, making an entry into your markets.

Chris Fowler, President and Chief Executive Officer, TruBridge: We have not seen that yet. I, you know, I think that companies are all trying to figure out how this plays out for them. I think it’s one of those things where you gotta be pretty careful ’cause it’s expensive. I think I said this maybe on the last call. I think sometimes people assume that AI replaces people and then that you get to drop that straight to the bottom line. I think for us, the way that we have kind of modeled out where we think AI can be an improvement is about a 20, maybe 30% improvement from a bottom-line perspective. If you’re not careful, you can really start to layer in some costs pretty quickly.

We’re trying to be mindful of making sure that we pick projects that we think have impact and that we also believe that we can bring quickly, and that we’re not carrying a bunch of extra cost without being able to rationalize that as we go. That’s why when you look at the ambient technology and we’re seeing the sales that are being generated based on that, the pipeline continue to build based on that, you know, there’s a nice return that’s associated with that. We look at what we’re doing in the support area and how that’s improving the experience for our customers, which is improving retention, which improves their desire to want to buy from us going forward. Like, we’re making sure that there is ROI attached to the AI projects that we’re doing.

I think that that’s really the way that, you know, I think that if you’re being smart about it, you gotta pay attention, ’cause otherwise you can end up with a pretty big bill without a lot to show for it. We’re happy with the progress we’ve made. I guess like others, we hope to see that kind of accelerate. Back to your initial question, we’re today not seeing anything dramatically change from the competitive landscape on it, other than our customers ask questions a lot more about what’s happening, what we’re doing with AI. It’s nice that we have a thoughtful response to be able to share back and that we’re making meaningful progress on that.

Ryan Halsted, Analyst, RBC Capital Markets: Got it. That’s great. My last question, just a clarification question. In terms of the outlook and the 200 basis points of margin opportunity, are we to assume that that is specifically the margin expansion opportunity you’ve alluded to in the past from offshoring? Or is it from something different or a combination?

Vinay, Chief Financial Officer, TruBridge: It’s a combination. It’s the same one that I gave last time too. Obviously, you saw the EBITDA is much better than the consensus, so we still feel 200 basis points. It will come from a variety of factors. Obviously, global offshore transition will be a key part of it, plus some other benefits of cost optimization and obviously something with the revenue mix too.

Ryan Halsted, Analyst, RBC Capital Markets: Okay. Thanks for taking my questions.

Vinay, Chief Financial Officer, TruBridge: Thank you.

Chris Fowler, President and Chief Executive Officer, TruBridge: Thanks, Ryan.

Operator: The final question comes from the line of Gene Mannheimer with Freedom Capital Markets. Please proceed with your question.

Gene Mannheimer, Analyst, Freedom Capital Markets: Thanks, and congrats on a good finish to the year, gentlemen. Just building off that last comment, Vinay. The 200 basis points of EBITDA margin expansion. It’ll be probably most of it from the COGS line, but some SG&A too with maybe some of the AI you’re introducing. Is that how to think about it?

Vinay, Chief Financial Officer, TruBridge: You should think about it. It will go through all the major costs, cost of sales, product development, and will be the primary contributors of this. Obviously from sales in G&A, there might be a mix of investments needed as and when. I think it will not just be in COGS. It will be primarily, but also from product development piece where we constantly keep on looking at ROI driven, like what Chris said. We are working on these four initiatives. Some of it goes through product development, some of this go through cost of sales, but all are positive ROI projects.

Gene Mannheimer, Analyst, Freedom Capital Markets: Got it. Okay, thanks. Second, my follow-up would be just maybe talk a little bit about that partnership with RevSpring. You signed it about 3 months ago, and I’m just thinking about how you see that bringing value to your customers and if there would be anything incremental this year that could come from that. Thank you.

Chris Fowler, President and Chief Executive Officer, TruBridge: Hey, thanks, Gene, and thanks for the nice comments at the top as well. And Vinay is pulling it up real quickly. I don’t think there’s a meaningful impact this year. Again, I do think that, you know, as the changes on the regulatory winds continue to blow and, you know, there may be some challenges with eligibility and continued increase in deductibles and co-pays. I think it’s in our best interest to make sure that we have a best-in-class patient collections initiative. You know, so we have the service where we have the call center, and we’re making the outbound calls, we receive inbound calls, and also, you know, partnering with RevSpring to deliver the digital experience for how the patients interact with their bill pay.

I do think that it will have a material impact. I don’t expect that to play out in this year. I think we’ll start to see some traction there towards the back half of the year and then moving into 2027.

Vinay, Chief Financial Officer, TruBridge: Yeah. Gene, I think Chris is right. There will be some savings on the cost part as we go through the digital piece, and obviously they’re becoming much more strategic partners, yields more benefits across the board from next year onwards.

Gene Mannheimer, Analyst, Freedom Capital Markets: Got it. Thank you.

Chris Fowler, President and Chief Executive Officer, TruBridge: Thanks, Gene.

Operator: Thank you. This now concludes our question and answer session, and I would like to turn the floor back over to Chris Fowler for any closing comments.

Chris Fowler, President and Chief Executive Officer, TruBridge: Thanks, John, and thank you all for your continued support. As always, thank you to all of our TruBridge team members who wake up every day focused on delivering for our customers. Have a wonderful afternoon. Thanks, everybody.

Operator: Goodbye.

Ladies and gentlemen, thank you for your participation. This does conclude today’s teleconference. Please disconnect your lines and have a wonderful day.