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TI

TruBridge, Inc. (CPSI)·Q4 2023 Earnings Summary

Executive Summary

  • Q4 revenue grew year over year to $85.9M, driven by RCM strength; GAAP diluted EPS was $(2.92) on goodwill ($35.9M) and trademark ($2.3M) impairments, while non-GAAP EPS was $0.36 .
  • Mix continued to shift toward RCM: RCM revenue was $51.0M (59.3% of total), while EHR declined year over year; bookings improved to $26.0M .
  • Management initiated 2024 guidance: revenue $340–$350M and adjusted EBITDA $45–$50M; Q1 2024 revenue $82–$84M and adjusted EBITDA $8.5–$9.5M .
  • Credit agreement amended with a one-time waiver for Q4 FCCR non-compliance and temporary covenant relief in 2024; rebrand to TruBridge (ticker change on Mar 4) positions the story around a unified financial health platform .

What Went Well and What Went Wrong

  • What Went Well
    • RCM momentum: “RCM excluding Viewgol, showed growth of 3.3% compared to Q4 '22,” underscoring core demand resilience even before acquired contribution .
    • Margin execution: “gross margin of 49.1% compared to 46.5% a year ago,” with drivers from the voluntary early retirement program and lower bonus accruals .
    • Bookings improved: total bookings rose to $26.0M vs $24.7M in Q4’22, reflecting healthier pipeline conversion into 2024 .
  • What Went Wrong
    • Large non-cash charges: GAAP loss driven by goodwill impairment ($35.9M) and trademark impairment ($2.3M), resetting the balance sheet and masking underlying operating progress .
    • EHR headwinds: “EHR showed a decline, primarily due to the impact of sunsetting the Centriq platform,” pressuring segment revenues year over year .
    • Elevated opex mix: management noted operating expenses (ex-impairments) as a percent of revenue increased year over year on severance and M&A-related fees, weighing on adjusted profitability in the quarter .

Financial Results

Quarterly summary – revenue, EPS, adjusted EBITDA

MetricQ2 2023Q3 2023Q4 2023
Revenue ($M)$84.622 $82.712 $85.868
GAAP Diluted EPS ($)$(0.20) $(0.24) $(2.92)
Non-GAAP EPS ($)$0.40 $0.45 $0.36
Adjusted EBITDA ($M)$11.227 $9.722 $11.984

Segment breakdown – Q4 year over year

Segment Revenues ($M)Q4 2022Q4 2023
RCM$45.670 $50.956
EHR$35.968 $33.412
Patient Engagement$1.586 $1.500
Total Revenue$83.224 $85.868

KPIs and mix (Q4 focus)

KPIQ4 2022Q4 2023
Bookings ($M)$24.671 $26.015
Adjusted EBITDA ($M)$13.228 $11.984
Gross Margin (%)46.5% 49.1%
RCM as % of Total Revenue—59.3%
Non-GAAP EPS ($)$0.61 $0.36

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ1 2024—$82–$84M New (initial)
Adjusted EBITDAQ1 2024—$8.5–$9.5M New (initial)
RevenueFY 2024—$340–$350M New (initial)
Adjusted EBITDAFY 2024—$45–$50M New (initial)
RevenueFY 2023$340–$350M $337–$342M Lowered
Adjusted EBITDAFY 2023$52.5–$54.5M $47–$49M Lowered
Non-GAAP Net IncomeFY 2023$25.6–$27.6M $24.5–$26.5M Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2023)Trend
Rebrand & ticker—“On Monday, March the 4th, we will officially transition to TruBridge… [ticker TBRG]” New identity; brand unification
RCM growth & ViewgolQ3: Offshoring build-out via Viewgol; plan for 400→800 global resources by 2024 to improve scalability/margins RCM excluding Viewgol up 3.3% YoY; RCM mix 59.3% of total revenue RCM stabilizing/growing; mix shift continues
EHR trajectoryQ3 press release showed stable recurring, softer nonrecurring EHR decline “primarily due to sunsetting the Centriq platform” Ongoing headwind from product sunset
Cost actions & marginsQ2–Q3: elevated severance/one-time costs impacted EBITDA Q4 gross margin improved to 49.1% on VERP savings and lower bonus accruals; opex % elevated on severance/M&A fees Margin drivers identified; opex still elevated near-term
Capital structure & covenants—Credit amendment reduced 2024 FCCR minimum to 1.15x and waived Dec-23 breach once Temporary covenant relief; monitoring required
Impairments—Goodwill ($35.9M) and trademark ($2.3M) impairments recorded Balance-sheet reset; non-cash

Management Commentary

  • CEO framing: “Despite the challenges we faced in 2023, we were able to finish out the year with a strong fourth quarter in terms of revenue performance, and we kicked off 2024 with the exciting news announcing our imminent rebrand to TruBridge… Unifying our identity under this brand reflects our transformation as an organization…” .
  • RCM/ex-Viewgol growth: “RCM excluding Viewgol, showed growth of 3.3% compared to Q4 '22” .
  • Margin drivers: “gross margin of 49.1%… The improvement… came primarily from savings associated with our voluntary employment retirement program and lower bonus accruals due to the 2023 performance” .
  • Product mix: “EHR showed a decline, primarily due to the impact of sunsetting the Centriq platform” .

Q&A Highlights

  • Guidance clarifications: Management reiterated initial Q1 2024 revenue of $82–$84M and FY 2024 revenue of $340–$350M; adjusted EBITDA outlook at $8.5–$9.5M (Q1) and $45–$50M (FY) .
  • Profitability levers: Management emphasized Q4 gross margin improvement (49.1%) tied to VERP savings and lower bonus accruals, and acknowledged elevated opex from severance/M&A fees .
  • Segment trajectory: RCM excluding Viewgol grew 3.3% YoY, while EHR decline reflected Centriq sunset impacts .
  • Corporate actions: Timing of rebrand/ticker change to TBRG (Mar 4) discussed as part of strategic repositioning .

Estimates Context

  • S&P Global consensus (revenue, EPS) for Q4 2023 was unavailable via our S&P Global tool due to a mapping issue (unable to retrieve CIQ company mapping for CPSI); therefore, we do not present SPGI-based estimate comparisons here.
  • Third-party sites reported modest beats (e.g., non-GAAP EPS $0.36 beat by ~$0.01; revenue $85.87M beat by ~$0.60M), but these are not S&P Global and are provided for context only .

Key Takeaways for Investors

  • Non-cash impairments (goodwill/trademark) drove the GAAP loss and “clean the slate” entering 2024; underlying operations showed sequential EBITDA stabilization and higher gross margins .
  • RCM remains the growth engine with ex-Viewgol growth and rising mix (59.3% of total revenue), while EHR faces headwinds from the Centriq sunset; stock narrative should focus on RCM pipeline conversion and Viewgol synergy capture .
  • 2024 guide (revenue $340–$350M; adjusted EBITDA $45–$50M) sets a pragmatic bar; watch Q1 execution ($82–$84M revenue; $8.5–$9.5M adjusted EBITDA) for early confirmation of cost and mix improvements .
  • Credit amendment and one-time waiver reduce near-term covenant risk but keep leverage discipline in focus through 2024; progress on cash generation and EBITDA trajectory are key de-riskers .
  • Rebrand to TruBridge and unified positioning around financial health services could be a multiple catalyst if paired with consistent RCM growth and margin expansion .
  • Near-term trading implication: headlines around impairment and covenant waiver may create volatility; constructive setup if Q1 meets guide and RCM bookings remain firm .
  • Medium-term thesis: pivot to a higher-mix, services-led model (RCM + offshore scale via Viewgol) supports margin rebuild; monitoring: EHR attrition cadence, synergy realization, and capital structure flexibility .

Supporting Detail and Sources

  • Q4 2023 8-K and press release with full financials, guidance, bookings and non-GAAP reconciliations .
  • Credit agreement amendment, FCCR relief and one-time waiver (filed same day) .
  • Q3 2023 results press release (trend context) .
  • Q2 2023 results press release (trend context) .
  • Q4 2023 call transcript excerpts (rebrand timing, RCM ex-Viewgol growth, gross margin drivers, EHR sunset) .
  • Rebrand and ticker change background (effective Mar 4) .
  • Viewgol acquisition context and offshoring strategy (Q3 call and company communications) .