TruBridge - Earnings Call - Q2 2025

Executive Summary

• Q2 2025 delivered resilient execution: revenue of $85.7M was roughly flat YoY (-$1.1M below consensus), while non-GAAP EPS of $0.54 materially beat Street ($0.29), and adjusted EBITDA of $13.7M was slightly ahead of the prior-year midpoint; consensus comparisons marked with asterisks and sourced from S&P Global*.
• Bookings remained strong: $25.6M TCV (+10% YoY) and $19.6M ACV (+13% QoQ), with recurring revenue at 95% of total, reinforcing visibility and mix quality.
• Guidance recalibration: FY25 revenue range narrowed to $345–$350M (lowered upper bound), while FY25 adjusted EBITDA raised to $62–$67M (midpoint implies ~18.5% margin); Q3 guide set at $85–$87M revenue and $14–$16M adjusted EBITDA.
• Key stock-reaction catalysts: significant EPS beat versus consensus, improved margin trajectory (gross margin and offshoring efficiencies), encoder outperformance, and Microsoft Dragon Copilot integration slated for fall launch; near-term revenue growth tempered by CBO attrition and longer implementation cycles deferring larger deal revenue into 2026.

What Went Well and What Went Wrong

What Went Well

• Strong bookings and mix: Q2 TCV bookings of $25.6M (+10% YoY) and ACV bookings of $19.6M (+13% QoQ), with balanced contributions across Financial Health and Patient Care.
• Margin execution and product outperformance: FH gross margin at 46% (+150 bps YoY) and Patient Care gross margin at 62% (+400 bps YoY); encoder solution cited as “overperforming and delivering higher gross margins,” supporting favorable revenue mix.
• Management conviction and actions: “we are also raising our Adjusted EBITDA range to incorporate the efficiencies realized by our offshoring initiative, our refinement of resource management, and cost optimization,” underscoring sustainable margin improvement.

What Went Wrong

• Top-line at the lower end and below consensus: Q2 revenue of $85.7M came in towards the low end and was ~$1.0M below Street; management attributed to slightly lower CBO retention and delayed revenue recognition from larger, more complex deals.
• Near-term operating cost timing: Q2 adjusted EBITDA down sequentially vs Q1 due to seasonal costs (user conference and rescheduled sales kickoff), Q1-to-Q2 revenue timing reversal (~$1M), and annual COLA plus investments in Financial Health.
• Policy uncertainty and potential demand headwinds: hospitals cautious amid “OB3” legislation and tariffs/macro, with possible second-half headwinds as budgeting shifts; management working with clients on Medicaid eligibility impacts and rural fund avenues.

Transcript

Speaker 5

Greetings and welcome to the TruBridge Q2 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press *0 on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Dru Anderson. Please go ahead.

Speaker 2

Thank you. Good morning and welcome to the TruBridge second quarter 2025 earnings conference call. Leading today's call are Chris Fowler, President and Chief Executive Officer, and Vinay Bassi, Chief Financial Officer. This call may include statements regarding future operating plans, expectations, and performance that constitute forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The company cautions you that any such forward-looking statements only reflect management expectations and predictions based upon currently available information and are not guarantees of future results or performance. Actual results might differ materially from those expressed or implied by such forward-looking statements as a result of known and unknown risks, uncertainties, and other factors, including those described in public releases and reports filed with the Securities and Exchange Commission, including but not limited to the most recent annual report on Form 10-K.

The company also cautions investors that the forward-looking information provided in this call represents their outlook only as of this date, and they undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this call. At this time, I will now turn the call over to Mr. Chris Fowler, President and Chief Executive Officer. Please go ahead, sir.

Speaker 6

Thank you, Dru, and thank you to everyone for joining us this morning to discuss our Q2 results. We've made steady progress towards our long-term goals, with bookings, profitability, and cash flow standing out as bright spots in the quarter. Before I dive into the results, I'm excited to share that last week I had the honor of representing TruBridge at the White House for the CMS HealthTech Ecosystem event, where we officially signed the CMS Interoperability Framework Pledge. This is an important milestone for us, and it really speaks to our ongoing commitment to empowering rural and community healthcare providers to keep care local. For over 45 years, TruBridge has delivered solutions designed to help providers remain independent and focus on what matters most: their patients.

By reinforcing our focus on interoperability and modern data infrastructure, we're working to make real-time, secure patient data accessible anytime and anywhere it's needed. This not only protects patient privacy, but it also gives patients and providers the tools they need to improve outcomes and enhance the healthcare experience. I'm proud of the impact that our work is having in the communities we serve, and I'm encouraged about what we can achieve together as we work to move healthcare technology innovation forward. As we continue to advance through our transformation, progress isn't always a straight line and can sometimes involve delays, but we remain confident in achieving our long-term objectives.

A key factor contributing to our confidence is our work with a third-party consultant, building upon our existing efforts to enhance on three main areas across the enterprise: one, improvement of operations; two, driving efficiencies; and three, unlocking the value of our existing customer base. We will elaborate a bit on these initiatives today and keep you updated on our progress going forward. With that, let's move on to our review of the quarter and outlook for the remainder of the year. Bookings came in at $25.6 million on a TCV basis, compared to $22 million sequentially and $23 million year-over-year. Revenue of $85.7 million came in towards the lower end of expectations, while adjusted EBITDA of $13.7 million came in slightly ahead of the midpoint.

Now that we are halfway through the year and with more visibility into the second half, we are taking a refreshed look at our guidance. We're lowering the top end of our revenue range and raising our adjusted EBITDA range as well. On the revenue side, there are two key factors driving our adjustment to guidance: CBO client retention and delayed revenue recognition from bookings. First, client retention in the CBO side of our Financial Health business was slightly lower than we had originally forecasted at the start of the year. Our North Star remains client delight, and we continue to take steps to improve client satisfaction back to our historical levels and beyond. At the beginning of the year, we identified 60 of our CBO clients up for renewal to use as a proxy for these efforts.

In the quarter, we signed 12 of 15, bringing our year-to-date total to 21 of 26. With respect to this group of clients, we expect renewals to remain in this range in the back half of 2025, but with significant improvement in 2026 based on our performance. The first half of this year has been used to build a thorough and strategic plan, and now in the second half of the year, we will turn our attention to operationalizing this plan, fully recognizing that this is going to be a multi-quarter journey. To that end, I'd like to walk you through some of the steps. First, we have significantly enhanced our resource management efforts for CBO, primarily by aligning people and work through a refined resource model that corrects misalignments, ensures the right resources are in the right place, and allows us to prioritize client work more efficiently.

As a result, we instituted a temporary pause in Q2 in our global hiring efforts to right-size staffing needs while continuing to invest in our people through training programs that enhance our acute RCM talent. We were able to offset the savings impact of this decision with savings from other efficiencies in the Financial Health business unit associated with resource management and productivity. Second, to supplement our remote workforce strategy, we are moving forward with establishing a physical presence in India to standardize our workflow, align with industry best practices, and ensure capacity to ramp at our desired pace. We are in the final stages of planning and are targeting an opening in 2026. Once operational, enhanced training and greater accountability through in-office presence will drive continued improvements in productivity, quality, client satisfaction, and retention.

Our plans include increasing the global workforce for this office, with the initial focus on the CBO and EBO businesses. This is another testament to our commitment to streamlining operations and strengthening our team dynamics, both of which we believe will benefit meaningfully from a physical location in India. Third, we completed several leadership hires focused on offshore service levels. First, our new Head of Services for Financial Health brings 15 years of experience in the healthcare outsourcing services in the RCM industry. This new role will ensure our services successfully support our clients' financial health through the delivery of consistent revenue cycle operations. We also brought on a new Head of India who joins us with more than 25 years of leadership experience in the U.S. healthcare sector, specializing in RCM operations, data analytics, and business translation. With our new leaders on board, we have lifted the temporary pause.

They will focus on enhancing client service quality, driving operational efficiency, and establishing strong in-office capabilities and support long-term client retention. Now that we have identified client retention as our area of opportunity and laid out a tangible plan to tackle this head-on, I feel confident that we will begin to make headway on improving this metric. The second factor affecting our revenue outlook is our success in bookings and more sizable deals. We've mentioned in the past that as we move upstream into larger hospitals and as we sell more of our integrated interest solution, these larger-sized deals take much longer to implement than what we have seen historically with smaller hospitals. While this sort of positive improvement is encouraging, it doesn't come without growing pains.

In our experience, deals that were over $1 million in recurring revenue took approximately six months to go live, compared to deals under that $1 million mark, which went live in between one and two months. Said succinctly, some of the meaningful deals we've signed in Q1 and Q2 won't start contributing revenue until 2026. For example, we're incredibly pleased to share that we signed a large deal this quarter, which expanded an existing partnership through the addition of three interest agreements. Implementation is not scheduled to go live until next year, but their decision to add three hospitals following a competitive process was based on the positive experience they've had with us to date, as well as the risk-sharing model of our interest package.

Turning now to our profitability expectations for the year, our revised EBITDA outlook now reflects an EBITDA margin of 18.5% at the midpoint of the range, up from 17% in our previous guidance. This is driven by factors in both Financial Health and Patient Care. First, in Financial Health, we see further efficiencies in our global offshoring initiative. Since Meredith has come on board, she has taken a metrics-driven approach and implemented productivity enhancements and performance-based incentives, which we expect will yield incremental savings in the second half. Second, we have taken steps to improve our resource management process. Specifically, we have implemented a more robust model for tracking supply versus demand of resources by functional area, and as I mentioned above, have adjusted our hiring approach and incentive programs.

Not only does this make us more efficient, it provides opportunity for cost savings, but it also helps ensure we have the right levels of staffing to best serve our customers. Lastly, we are seeing a favorable revenue mix with our encoder solution overperforming and delivering higher gross margins. Lastly, in Patient Care, we are working to enhance and streamline our operations, particularly in client support. As a result, we expect some savings beginning in the fourth quarter. I want to close my comments today with some of the ways we're innovating, specifically leveraging AI, both internally to drive efficiency and externally to enhance the client experience we're able to deliver. Internally, we recently released an AI solution for our Patient Care client support team.

We believe that it will help our Patient Care support team respond in a timelier manner and, more importantly, with a standardized approach, ensuring all our clients receive the same high-quality experience. Externally, as we announced in May at our National Client Conference, we are collaborating with Microsoft to integrate Microsoft Dragon Copilot into our Electronic Health Record solution. Providers that use TruBridge will be empowered by advanced secure speech recognition and AI capabilities designed to support the unique needs of our rural and community healthcare clients. Our goal with this collaboration between our two technologies is to enhance care delivery, financial stability, and operational efficiency for thousands of hospitals and healthcare systems across the country.

I believe this collaboration will be welcomed by our clients when the integrated solution becomes available later this fall, and I'm thrilled for TruBridge to be partnering with Microsoft to bring cutting-edge solutions to our clients. As I hand the call over today, I'd like to reiterate that I am pleased with the progress we continue to make across the company. We feel that our bookings growth validates the value we offer clients, and our improving margin profile is a sign that we are on the right track. We will always continue to refine and optimize our approach, but I firmly believe that the actions we are taking today are the best way to set us up to deliver sustainable and durable growth down the road. Now, with that, I'll turn the call over to Vinay for a deeper dive into the financials. Vinay?

Speaker 3

Thank you, Chris, and good morning, everyone. Let me take a few minutes to walk through our second quarter financial results, share the progress we are making on key financial initiatives, and provide additional color to Chris's update on our outlook for the remainder of the year. We have made notable progress in working capital improvement and on increasing free cash flow conversion. For the first half of 2025, we generated $14.5 million in cash flow from operations, an increase of $2.8 million compared to the first six months of the prior year. Year to date, free cash flow, which we define as cash flow from operations less CapEx, was $5.5 million, up $3.4 million compared to the first six months of 2024. Accounts receivable in the second quarter improved 5%, and DSO improved by four days compared to the prior year.

We expect to continue to improve in this area, but this year, anecdotally, we are still seeing our clients holding cash given the ongoing external policy uncertainty. From a leverage standpoint, we ended the quarter at 2.4 times, an improvement from 3.9 times a year ago, and marking the second consecutive quarter net leverage has been below 2.5 times. During the quarter, we paid down $1 million in incremental principal, bringing the total debt payments to $32.5 million since January 2024, including $5 million in normal amortization payments. Our profitability profile continues to improve as we realize the efficiencies and leverage that are inherent in our business. In Q2, we delivered an adjusted EBITDA margin of 16% compared to 15.7% last year. This Q2 also carried expenses related to our annual user conference and the sales kickoff meeting that was rescheduled from Q1.

We continue to work on identifying additional areas of cost efficiency in client support and vendor relationship, as well as optimizing our global offshore initiatives. The midpoint of our revised guidance reflects an adjusted EBITDA margin of approximately 18.5%, which is up 200 basis points compared to the previous year, and we remain confident that we can end the year around 20%. Finally, we are making continuous progress on our financial stability, accounting processes, and forecasting accuracy. We are actively working on remediation and strengthening of our accounting processes and internal controls. We are also excited about the selection of KPMG as TruBridge's new independent registered public accountant and look forward to their partnership as we work to remediate and strengthen our key controls. Now, turning to our second quarter results.

Starting with bookings, as Chris mentioned, we reported $25.6 million on a TCV basis, an increase of 10% year over year. On an annual contract value or ACV basis, which we provide in our press release and 10-Q filing for better comparability and improved clarity on revenue potential, bookings were $19.6 million in Q2, up 13% sequentially. Revenue in the quarter of $85.7 million was roughly flat to prior year. However, I'd like to point out approximately $1 million of the year-over-year variance is primarily due to the sunsetting of the Centriq product last year. Normalizing for this, revenue would have been up 1% versus prior year. Financial Health revenue of $54.3 million was relatively flat and represented 63% of the total revenue.

This is largely due to slightly elevated levels of customer attrition, as well as the impact of timing of some revenue in Q1, as mentioned in last quarter's update. On a year-to-date basis, Financial Health revenue grew 2.3%. Patient Care revenue of $31.4 million increased approximately 1.1%. Excluding Centriq's contribution from last year's Q2, Patient Care would have grown almost 4%. Gross margins in the quarter of 52% increased 250 basis points over last year. Financial Health gross margins of 46% in Q2 increased 150 basis points compared to a year ago and benefited from our offshoring initiative, as well as run rate savings from the 2024 cost optimization actions. Patient Care gross margins reached a recent high of 62% in Q2, increasing 400 basis points year over year, driven primarily by cost optimization actions from 2024 and 2025.

Moving down the P&L, total operating expenses of $40.8 million primarily represented 48% of total revenue and compared favorably to Q2 of last year at 52% of total revenue due to cost optimization effort of the previous year. All of this resulted in Q2 adjusted EBITDA of $13.7 million with a 16% margin compared to $13.4 million at a 15.7% margin in Q2 of 2024. From a cash and cash equivalent standpoint, we ended Q2 with $12.3 million, up $2.2 million sequentially, and $4.6 million year over year. Turning to guidance for the third quarter, we expect revenue to be in the range of $85 million to $87 million and adjusted EBITDA to be in the range of $14 million to $16 million. For the full year, we are lowering the top end of our revenue range and raising our adjusted EBITDA range as follows.

Revenue will be between $345 million and $350 million at the lower end of our previous range of $345 million to $360 million, and adjusted EBITDA will be between $62 million and $67 million, up from our previous range of $60 million to $66 million. Despite the revision in full year revenue guidance, as Chris discussed, we have increased the adjusted EBITDA guidance through prudent expense management, labor cost optimization, and resource management. We have made meaningful improvements in several areas during the first half. I believe we are well positioned in the multi-billion dollar market we are with plenty of room to run. With that, operator, let's open the call to questions.

Speaker 5

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press *2 if you would 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 * keys. Again, that is *1 to ask a question. Our first question comes from Sarah James with Cantor Fitzgerald.

Speaker 4

Thank you. You mentioned a number of savings and efficiency initiatives. Is there any additional color you can help us with scaling that or pacing of how that may come on board?

Speaker 3

Yeah, that's a great question, Sarah. I would say, I'll just take one step back to explain that. Last year, we did cost efficiencies. I would characterize that as the low-hanging fruit. That, if you remember, was $8 million to $9 million on a run rate basis. Some $4 million to $5 million came in in 2024. With the team settling in and getting now the benefit of our third-party consultant, we are now cracking a little more complex part of the puzzles. For example, one of the areas I mentioned was in client support. We are trying to modernize our client support organization. That is one of the areas where we were working in the first half on the planning part of it, and in the second half, most likely from quarter four onwards, start realizing some savings. That is one example there.

I would say to give you a sizing of it right now, from a run rate basis, I see a run rate basis meaning would be seeing in the low single-digit millions. Our goal is to find areas which are tougher, but help us get on a solid footing to our overarching goal or objective that we set up to be in the mid-20s EBITDA margin in a couple of years. As I had mentioned, some of these are now complex, which will help us, with that goal. The other part of these are, I would say, vendor optimization, which is, I would say, run of the mill every day, every week. The third part is the resource management initiatives, productivity initiative that will help us.

I would characterize the first target, like the client support, as one of the few that we are trying to tackle and hopefully add more in our journey to get to the mid-20s EBITDA margin.

Speaker 4

That's very helpful. Now that OB3, your one big beautiful bill, is passed, have you had a chance to check in with your client base and see how they're thinking about budgeting and if it has any impact on the pace of signing contracts or expanding contracts?

Speaker 6

Yeah, good morning, Sarah, and thank you for that question. We have obviously since January, knowing that this was in the air, been pulsing our clients. I would say I would characterize the first half of the year as where the uncertainty was, knowing where the bill would land or the act would finally come out. There was a little bit of pause there. I think now that there is, I'm going to put an air quote, "certainty," that this has been passed into law, we'll see how the implementation of it plays out. Now that there is certainty, our hospitals are starting to plan for that.

We are working with them and some additional resources to help them identify potential impact, specifically around the eligibility of the Medicaid population and what that impact for them will be, along with thinking about how we can work with their state agencies to be a part of the contribution from the government for the $50 billion rural healthcare fund inside of the plan. I would still say it's a little early, but we are absolutely heads down, both internally and with our customers, on trying to figure out exactly what the potential impact would be. To your second part of the question around impact on sales, I do suspect that it could have some potential headwind to the second half of the year. We haven't seen that manifest just yet, but you never know exactly how that's going to play out.

It is definitely something, as they're starting to get into their planning for 2026, that it'll be a way that they approach it. I think long-term for us, though, that we see it as an opportunity to take a bigger role in helping our customers kind of navigate through what the new landscape looks like and making sure that they are operating as efficiently as they can and delivering the right services for their patients.

Speaker 4

Great. Thank you.

Speaker 6

You bet. Thank you, Sarah.

Speaker 5

Our next question comes from Jeff Garro with Stephens.

Speaker 0

Good morning. Thanks for taking the questions. Maybe we'll follow up on the demand front and ask specifically about bookings and overall the last couple of years, an effort to deliver more consistent bookings. You guys have come through on that end for the most part, maybe one quarter a year with bookings slipping below $20 million. What are the leading indicators and the macro environment telling you right now about your ability to deliver that kind of consistent above $20 million bookings level for the rest of the year?

Speaker 6

Yeah, you know, it's a great question, and good morning, Jeff. We continue to feel good about our performance on the bookings front. The fact that, you know, if you look at it, it's a nice balance between the patient care and the financial health. When you go into the financial health, there's a nice balance between both the in our customer base and the net new market. You know, when you look at it, we're seeing some nice trends in all the area. I think the outlier for us is how the patient care net new market will continue to go forward. We had a nice win in this quarter, which got our number up to a really nice spot. We just don't have the at-bats that are in that space like we used to to win. We're winning when we get them.

I think that's the macro factor on that side is that the hospitals are still somewhat dug in on the Electronic Health Record that they're in. We continue to remain excited about our ability to deliver innovation there, coupled with the services on the Revenue Cycle Management side to create a differentiating solution for our end of the market. The trends on the financial health remain the same or remain, you know, remotely the same in that, you know, we're still seeing the demand for the need to help solidify and stabilize the performance of the Revenue Cycle Management in the customer base. In this quarter, we also had some nice expansion deals on the net new side, which has been part of our strategy and how to tackle that part of the market.

Start with something small, get our name in, get a deal papered, over-execute on that deal, and then continue to expand the relationship that we have. With that said, you know, we don't know the future, but still feel pretty good about our ability to continue to perform at the consistent levels we have been.

Speaker 0

Excellent. I appreciate all that detail. Of course, another part of the growth story is retention. I would welcome any additional comments there on performance by segment. I really appreciate the transparency on Financial Health renewals. Of course, overall retention is likely much better than what we get if we do the math on those renewal conversions, as not all the book is up for renewal each quarter. A little more color there on how we should think about retention trends for the overall book of business by segment would be helpful.

Speaker 6

Yeah, absolutely. Vinay and I may tag team this one. I'll start with some color. Let's start with the patient care side. Obviously, really good news on that front, seeing the retention numbers continue to stay strong and the renewal rate as well. Happy with the way that team has delivered over the last several years. You remember we brought in a new GM there at the end of 2023. We're really seeing that transformation take hold, and the delivery into that customer base is obviously apparent. On the financial health, the story is the journey that we're on right now of making sure that we've got our offshore, our global operation buttoned up so that the delivery to our customers is what it always has been.

The trend is, if we look at the metrics, the performance-driven metrics, we are seeing improvement month over month for those customers, which is leading to better satisfaction, which is going to lead to retention. There were some bumps with the conversion from last year that we have backed up a little bit, remeasured, and cut again. Now feel more than confident in the approach that we have going forward to see that retention stabilize and eventually improve on the financial health side of the business. I do think it's important to call out that the main focus in the RCM business has been on the CBO, right? That's the area that we did transition offshore. That represents, let's call it a little less than half of the overall revenue for financial health. The rest of the business is as it was and continued to improve.

There is a bright spot in there. I'd say more than one, but there is a bright spot to call out the encoder business, which was previously TruCode. We have made some investments in that product that are really paying off. We're seeing some nice momentum both from a booking standpoint and implementation and revenue associated with that. All in all, as I've said in the beginning, we knew that this wouldn't be a super smooth road, that there wouldn't be some bumps in it. We see the bumps now, and I think we've got a really good plan to level this out and see the improvement as we go into 2026. Any additional?

Speaker 3

Yeah, so I can add a couple of colors. Starting from patient care, Jeff, that's a great question. Our retention rates, and you will see it in our 10-Qs coming out today, is in the very high 90%. It is a function of, like what Chris said, but also building operational and financial discipline, having pricing, cost of living adjustments like we get, getting that muscle helps us. That is in the high 90%. On the financial health side, like what Chris said, I'll start with the encoder piece. It was not a surprise that the bookings are going up because we greenlit an investment last year with an ROI metric, and that is panning out. We feel it now.

Obviously, nothing is like a straight line every quarter, but what we feel is, with Meredith coming in and with her technology background also, the momentum there with the reason I use financial discipline, nothing is passed without an ROI objective. If there are investments needed, we can see growth continuing in the technology side. On the CBO side, it's the operational piece that now we have resource management tools in to know how it works. Obviously, from a, I would say, like a net revenue retention, it's still in the low 90%, but a slight decline than what we were expecting. That is there. We expect that in 2026, with all this settling in and we get the momentum back, we should be able to cover that.

Speaker 0

Excellent. I appreciate all that detail as well. Maybe one follow-up on the Financial Health side of things. Just kind of trying to take a little bit of a step back and assess the Viewgol acquisition. My overall impression is that you're probably happy having the captive effort versus working with a third-party vendor, but maybe a few more issues to handle and tackle and remediate than you initially expected. We'd love to get your assessment on how that overall has performed relative to expectations and maybe an assessment on where you are in the duration of the journey to, I know there's never going to be a perfect endpoint, but get to a place where you feel comfortable accelerating your clientele moving to the offshore model. Thanks.

Speaker 6

Yeah, again, another good talking point for us. I would say overall still very pleased with that acquisition. To your point, you know, we knew that we would need a captive, and we still believe that this was a good solution for that. I will say, and obviously said this in the prepared remarks, I think the learning for us over the last year and a half is based on the pace that we want to go with the size of our installed customer base and the need to bring on new resources at a speed. There definitely was a gap in the fact that the remote workforce just doesn't necessarily lead to that, you know, in a perfect solution. It doesn't mean that it's a bad part of the business.

It just means it needs to have a complement to it, which is the academy that we're in the process of standing up. The other nuance in that as well is the difference between the ambulatory and the acute billing. You know, while I'll say, and I've argued this point internally with our team, the level of acuity of our hospitals is probably closer to an ambulatory setting than it is to some of the larger facilities. However, it is still different. That's something that we've got to make sure that our team in India is set up for success, understanding the nuance and the procedures associated with that.

The last part, I would say, is as we think about looking backwards to go forward, before we moved to India, we had a very bespoke service and we were client-centered on the work, which meant that we had 100 different processes and individuals for each client. As we look to the new global model, we realize that standardization is the path to scale and the path to what I think is ultimately higher performance and delivery for the customers. That has been part of the machine that's being built right now, making sure that we have that standardization, that we've gone back through, and that we've thoughtfully got all of our customers lined up right in the new workflows so that we're making sure that the delivery is there.

The connection being to the old model was that we also have a staff that we've built up that does represent client success, that is very focused on the impact and the relationship with the customer, married back to the performance that we're delivering with our global team. You look at all that, you look at the new leadership team that we brought in, kind of in all facets through this, both on the global side and here domestically, revisited the plan with them, with our outside help as well, and feel very confident that as we finish this year, and we're seeing that momentum continue, that we'll hit next year running and see that conversion turn back on at full speed in 2026.

Speaker 0

Excellent.

Speaker 6

Thank you, Jeff.

Speaker 5

Thank you. Our next question comes from Gene Mannheimer with Freedom Capital Markets.

Speaker 1

Thank you. Good morning. Thanks for taking the questions, Vinay, Chris. Two things from me. One would be, have you or would you disclose the name of that third-party consultant that you referenced in your prepared remark? Secondly, on the client attrition side, where are these clients going? In other words, are they going with alternative solutions or insourcing these capabilities? Maybe a little bit of color there. Thank you.

Speaker 6

Yeah, good morning, Gene. Early on the West Coast today, so I appreciate you waking up with us. The short answer to question one is no, we will not. Getting into the attrition side, I would say it's a mixed bag, but the vast majority are going back in-house. To be fair to our team, there is a little bit of a dynamic there that it's not always all about the numbers. Sometimes there can be new leadership that comes into a facility that has the desire to bring it in-house.

I do think that there still is, in our end of the market, a little bit of hesitation to the offshore model, which I think is where we've got to be, where we've been very intentional to make sure that the relationships with the customer are still U.S.-based and that we've got a contingent, and we'll always have a contingent of U.S. workforce that helps kind of bridge that gap. The vast majority has gone back to the hospital, which in my head leaves the door very much open for us to come back and get those customers again. Go ahead.

Speaker 3

Just on your first one, obviously, we cannot give the name, but let me tell you, Gene, it's not one-person army. It's a top-notch consultant with the expertise of helping us in the core pieces. Obviously, as you appreciate, naming is tough, but these are the best of the best that we could get their help.

Speaker 1

Okay, great. That's very helpful. Thank you, gentlemen.

Speaker 6

Thanks, Jean.

Speaker 5

This now concludes our question and answer session. I would like to turn the floor back over to Chris Fowler for closing comments.

Speaker 6

Thank you, Carrie. As always, thank you for everyone and their continued interest in TruBridge, and a special thank you to all of our TruBridge teammates. Without them, this journey would not be possible. Thank you to everyone and have a great weekend.

Speaker 5

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