Executive Summary

Q3 2023 underperformed: revenue was $82.7M (flat YoY), GAAP diluted EPS was $(0.24), non-GAAP EPS $0.45, and Adjusted EBITDA $9.7M; bookings fell to $16.2M, well below targets .
Guidance was lowered for FY 2023: revenue to $337–$342M (from $340–$350M), Adjusted EBITDA to $47–$49M (from $52.5–$54.5M), and non-GAAP net income to $24.5–$26.5M (from $25.6–$27.6M). The cut was driven by mixed revenue mix, bookings softness, and cost issues; management highlighted external pressures and prior budgeting missteps .
Segment mix: RCM revenue was $46.6M (56.3% of total), EHR $34.5M, and Patient Engagement $1.6M; RCM Adjusted EBITDA declined to $4.6M as mix and costs weighed on profitability .
Strategic catalyst: closed the Viewgol acquisition in October, adding offshore capacity (80%+ of Viewgol’s workforce offshore) to accelerate TruBridge offshoring and margin initiatives; purchase price $36M cash plus up to $31.5M earn-out .

What Went Well and What Went Wrong

What Went Well

EHR resilience: “Our electronic health record (EHR) business performed well with continued strength in existing customer retention,” signaling stable recurring EHR revenue base despite macro headwinds .
Strategic capacity expansion: “Our recent acquisition of Viewgol brings a massive global resource expansion and alleviates resource pressure we have faced in our RCM business,” positioning RCM for scaled offshoring and margin improvement .
Leadership focus: “We are also laser-focused internally, improving the efficiency of our operations, and bringing Vinay Bassi on board as our new chief financial officer,” highlighting operational rigor and governance upgrade .

What Went Wrong

Bookings softness and mix: Q3 bookings fell to $16.2M from $20.5M; RCM bookings declined YoY amid cross-sell weakness as the pace of prospective sales decisions slowed .
Profitability pressure: Adjusted EBITDA fell to $9.7M (from $13.3M YoY) as revenue mix, severance/nonrecurring charges, and elevated interest costs weighed; GAAP shifted to a $(3.6)M net loss .
Guidance cut: FY23 revenue, Adjusted EBITDA, and non-GAAP net income outlooks were lowered, reflecting operational and cost-structure issues in the near term .

Financial Results

Consolidated Performance vs Prior Quarters

Metric	Q1 2023	Q2 2023	Q3 2023
Revenue ($USD Millions)	$86.233	$84.622	$82.712
GAAP Diluted EPS ($USD)	$0.21	$(0.20)	$(0.24)
Non-GAAP Diluted EPS ($USD)	$0.58	$0.40	$0.45
Adjusted EBITDA ($USD Millions)	$14.643	$11.227	$9.722
Bookings ($USD Millions)	$20.894	$21.948	$16.248

Segment Revenue

Segment Revenue ($USD Millions)	Q1 2023	Q2 2023	Q3 2023
RCM	$48.631	$47.760	$46.582
EHR	$35.191	$34.967	$34.493
Patient Engagement	$2.411	$1.895	$1.637

Segment Adjusted EBITDA

Segment Adjusted EBITDA ($USD Millions)	Q1 2023	Q2 2023	Q3 2023
RCM	$7.898	$5.682	$4.623
EHR	$6.157	$5.568	$5.669
Patient Engagement	$0.588	$(0.023)	$(0.570)

KPIs

KPI	9/30/2022	12/31/2022	3/31/2023	6/30/2023	9/30/2023
Client Net Patient Revenue (NPR, $USD Millions)	$2,958	$2,991	$3,033	$3,205	$3,469

Notes: RCM revenue represented 58.2% of total recurring revenue and 56.3% of total revenue in Q3 2023 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2023	$340M–$350M	$337M–$342M	Lowered
Adjusted EBITDA	FY 2023	$52.5M–$54.5M	$47M–$49M	Lowered
Non-GAAP Net Income	FY 2023	$25.6M–$27.6M	$24.5M–$26.5M	Lowered

Management does not provide GAAP guidance for certain items due to the unpredictability of severance and other nonrecurring charges .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3 2023)	Trend
RCM strategy and offshoring	Emphasized RCM focus; Q1 noted strong pipeline and 41% bookings growth, driven by cross-sell; Q2 acknowledged transformation and pipeline growth despite headwinds .	Viewgol acquisition accelerates offshore capacity to alleviate resource pressure in RCM; intent to improve profitability at scale .	Improving capability; near-term margins pressured.
Bookings volatility	Q1 strong bookings ($20.9M) with cross-sell momentum; Q2 bookings $21.9M, slightly down YoY .	Q3 bookings fell to $16.2M; cross-sell softened as decision pace slowed .	Declining in Q3.
Cost discipline & leadership	Q2 recognized outsized expenses and reset EBITDA guidance; transformation initiatives underway .	Added CFO Vinay Bassi; focus on efficiency and profitability; lowered FY guidance reflecting cost structure and budgeting missteps .	Strengthening governance; guidance reset.
EHR customer retention	Q1–Q2: EHR stabilization and retention .	Continued strength in EHR retention, recurring base remains resilient .	Stable.
M&A integration (Viewgol)	—	Purchase price $36M cash + up to $31.5M earn-out; accelerates offshoring; 2024 contribution targeted (net income ~$1.5M, Adj. EBITDA ~$4.5M) .	Positive strategic lever; integration benefits to come.

Management Commentary

CEO Chris Fowler: “Unfortunately, our third quarter results came in below our expectations… our electronic health record (EHR) business performed well… we remain optimistic on the opportunity in RCM… Our recent acquisition of Viewgol brings a massive global resource expansion and alleviates resource pressure we have faced in our RCM business… improving the efficiency of our operations, and bringing Vinay Bassi on board as our new chief financial officer…” .
CEO tone: “This has been a challenging quarter… visibility into our pipeline… acute focus on improving profitability gives me optimism we will be well positioned to take advantage of all future potential opportunities” .
Call detail (CFO): Purchase price for Viewgol included $36M upfront cash and up to $31.5M earn-out; Viewgol expected to generate ~45% YoY revenue growth to ~$17M and ~$3M Adjusted EBITDA in 2023 (pre-synergies) .

Q&A Highlights

Viewgol transaction economics and strategic rationale: Management detailed cash consideration and earn-out terms and described offshore staffing capacity as a lever for RCM margins .
Bookings and pipeline: Management acknowledged bookings underperformance and decision delays on cross-sell, but indicated pipeline visibility and intent to convert .
Profitability drivers: Mix (lower-margin streams), out-of-period vendor expenses (~$0.5M), and higher interest expense contributed to light Adjusted EBITDA; leadership emphasized cost scrutiny going forward .
Guidance framework: FY23 guidance was lowered; the team highlighted operational excellence focus and integration of Viewgol to drive margin improvements .

Note: A third-party call transcript reported Q3 revenue of ~$84.7M; CPSI’s official 8‑K shows $82.7M. We anchor to the 8‑K as authoritative .

Estimates Context

We attempted to retrieve Wall Street consensus via S&P Global for Q3 2023, but the company mapping was unavailable at the time. As a result, estimate comparisons are omitted. Values would normally be retrieved from S&P Global.
Some third-party coverage indicated non-GAAP EPS of $0.45 vs expectations of ~$0.40; however, per guidelines we anchor estimate comparisons on S&P Global and therefore do not present non‑SPGI comparisons here .

Key Takeaways for Investors

Near-term reset: Guidance cuts and bookings softness suggest cautious near-term expectations; watch conversion of pipeline and the pace of cross-sell recovery .
Margin path via offshoring: Viewgol adds offshore capacity and analytics to TruBridge; monitor integration milestones and RCM margin mix over 2024–2025 .
EHR base stability: Solid EHR retention underpins recurring revenue despite lower nonrecurring EHR sales; this stabilizes cash generation while RCM is optimized .
Cash and leverage: Interest expense rose to $3.1M in Q3 and debt balances remain material; cost actions and free cash flow discipline are important into FY24 .
Operating cadence: Management acknowledged past budgeting missteps and is tightening execution under a new CFO; look for sequential improvement in Adjusted EBITDA and bookings as cost programs take hold .
Stock narrative: Catalyst path hinges on evidence of RCM margin improvement from offshoring and steady EHR recurring revenue; any acceleration in bookings conversion would be a positive narrative inflection .

Sources: CPSI Q3 2023 Form 8‑K and Exhibit 99.1, Q2 and Q1 2023 earnings 8‑Ks, and public call transcript sources and Viewgol transaction press releases as cited above .

TruBridge, Inc. (CPSI)·Q3 2023 Earnings Summary