TruBridge (TBRG) Stephens 26th Annual Investment Conference | NASH2024 summary

Market and demand trends

• Labor shortages, especially in rural healthcare and RCM, continue to drive demand for outsourced solutions.

• Regulatory changes like HTI-1 and HTI-2 are expected to create opportunities as smaller vendors struggle to comply.

• Shifts in Medicare Advantage and Medicaid funding are pushing hospitals to seek efficiency and smarter operations.

• Demand is rising for both EHR and RCM, with 60%-70% of EHR deals now including RCM components.

• Expansion into larger hospitals (100-400 beds) is gaining traction through consultative, relationship-driven approaches.

Bookings, revenue quality, and growth outlook

• Four consecutive quarters of $20M+ bookings achieved through diversified pipeline and improved sales leadership.

• Recurring revenue now at 96%, with 40%+ tied to collections, aligning client and company success.

• CBO revenue is growing at double digits, driven by faster conversion of bookings and focus on customer retention.

• Organic revenue growth is expected to move from flat to mid-to-high single digits, aided by stabilizing EHR and continued RCM momentum.

• Attrition management and new product offerings are key to sustaining growth and improving margins.

Operational transformation and margin improvement

• Offshoring to Viewgol is progressing, with 30% of business converted and another 30% targeted by end of 2025.

• High single-digit million-dollar savings expected from offshoring between early 2024 and end of 2025.

• Focus remains on balancing labor cost savings with customer satisfaction to minimize attrition.

• EBITDA margin targeted to rise from 16.5% to at least 20% by late 2025, driven by gross margin leverage, operating efficiency, and cost control.

• Capital allocation rigor increased, with CapEx as a percent of revenue targeted to fall to 4.5%.