Release Date: May 10, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- TruBridge Inc (TBRG, Financial) reported strong bookings in the first quarter, totaling $23 million, demonstrating robust sales execution and market demand.
- The company successfully onboarded a large ambulatory network deal, showcasing its ability to expand into new customer segments and markets.
- TruBridge Inc (TBRG) launched TruBridge Analytics, enhancing its capabilities to provide clients with better insights and data analytics.
- The company announced strategic partnerships with Microsoft for new Australian speech recognition technology and MultiView for financial management applications, aiming to enhance product offerings and generate additional revenue.
- TruBridge Inc (TBRG) maintained its adjusted EBITDA guidance at $45 million to $50 million, reflecting confidence in operational efficiency and cost management.
Negative Points
- TruBridge Inc (TBRG) revised its 2024 revenue guidance downwards from $340 million-$350 million to $330 million-$340 million due to longer implementation times for large deals.
- The company experienced a decrease in total revenue by approximately 3.5% year-over-year in the first quarter, primarily due to divestitures and product sunsetting.
- Implementation timelines for contracts have doubled compared to historical averages, impacting revenue recognition and forecasting accuracy.
- TruBridge Inc (TBRG) reported a loss in operating cash flow of $2 million in the quarter, a significant decline from a positive $9.5 million in the previous year.
- The company faced challenges with service disruptions and customer satisfaction, which they are actively addressing to improve service quality.
Q & A Highlights
Q: Congratulations on the strong start to the year. Can you discuss the bookings and whether you expect to maintain the Q1 pace throughout the year? Are there opportunities to elevate that?
A: (Christopher Fowler - President, CEO) We are optimistic about our sales pipeline and the momentum we've built. While we are cautious, we are set up to execute and understand the dynamics of larger deals. These deals take longer but have a significant impact on bookings and revenue. We aim to continue exceeding our expectations quarter over quarter.
Q: Regarding the guidance adjustment, can you elaborate on the cost actions taken to keep the EBITDA target unchanged despite lower revenue projections?
A: (Vinay Bassi - CFO) We've initiated cost-saving measures, including project shutdowns and headcount reductions, which have already identified $2 million in permanent quarterly savings. These actions, along with rightsizing and optimizing cloud expenses, contribute to maintaining our EBITDA outlook.
Q: Can you provide more details on the revenue side of the guidance and the sequential decline from Q1 to Q2?
A: (Christopher Fowler - President, CEO) The decline is primarily due to the timing of bookings to revenue conversion and natural attrition. We expect to see a pickup in the latter half of the year as new implementations begin to contribute more significantly to revenue.
Q: How do the implementation timelines for 2024 compare with historical averages, and why are they being elongated?
A: (Christopher Fowler - President, CEO) Historically, implementation timelines averaged around 90 days, but we've seen this almost double recently. This is partly due to internal opportunities for improvement and contractual obligations from clients' previous vendors. We are focused on enhancing our internal processes to expedite revenue realization.
Q: Could you discuss the impact of the change in clearinghouse providers and whether it has created additional sales opportunities?
A: (Christopher Fowler - President, CEO) The change has indeed created opportunities. We quickly implemented a fast-track conversion service for providers needing a new clearinghouse, which has led to an uptick in business. We anticipate more opportunities over the next 12 months as the market continues to adjust.
Q: With the partnership with Nuance for speech recognition, considering the high cost, how do you justify this for your client base, and why choose Nuance over lower-cost alternatives?
A: (Christopher Fowler - President, CEO) Many of our customers already use Nuance, which was a significant factor in our decision. While we acknowledge the need for cost-effective solutions, especially for smaller providers, we are exploring additional partnerships to offer more options tailored to varying needs across our customer base.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
