TruBridge, Inc. (TBRG)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 revenue was $87.4M (+2% y/y) with adjusted EBITDA of $17.2M and 19.7% margin, capping a year of steady quarterly margin expansion; GAAP EPS was $(0.38) and non-GAAP EPS was $0.05 .
• Mix improved in Financial Health (RCM): FH revenue rose to $54.7M (+7.3% y/y), 62.6% of total; Patient Care declined to $32.7M (−6.3% y/y) but benefited from >$1M in one-time/non-recurring items; total recurring revenue was 93.6% .
• Bookings slowed to $14.3M (vs. $24.4M y/y) as several larger deals slipped into 1H25; management cited policy uncertainty and deal-timing frictions, but said one has already closed in Q1 and others are expected to close in 1H25 .
• Initial 2025 guidance: revenue $345–$360M and adjusted EBITDA $59–$66M; Q1 2025 revenue $85–$88M and adjusted EBITDA $14–$16M; management targets mid‑single‑digit growth and ~200 bps margin expansion in 2025, with Q2 margin seasonality step-down then 2H uptick .
• Cash from operations improved sharply ($10.3M in Q4; $32.1M FY), net leverage fell to ~3x, with deleveraging and offshore execution (30% of CBO clients transitioned; 60% target for 2025) as key catalysts .

What Went Well and What Went Wrong

• What Went Well

  • Steady margin expansion and strong exit rate: Q4 adjusted EBITDA margin reached 19.7%, up ~580 bps y/y (14.0% in Q4’23) and up ~325 bps q/q from 16.5% in Q3’24, helped by cost actions and offshore savings. “Margins improved steadily each quarter in 2024 starting at 11.4% in Q1 and growing to 20% by Q4.”
  • Financial Health momentum: FH revenue grew 7.3% y/y to $54.7M and comprised 62.6% of revenue; CFO cited core CBO growth and Viewgol contribution (~2% of FH growth) .
  • Cash generation and deleveraging: Q4 CFFO $10.3M (up ~$23M y/y), FY CFFO $32.1M; net leverage improved to ~3x with $23M of principal repaid in 2024 .

• What Went Wrong

  • Bookings softness and timing: Q4 bookings fell to $14.3M (vs. $24.4M y/y and $21.0M in Q3’24) as several large deals slipped; management expects closure in 1H25 but flagged ongoing timing volatility .
  • Patient Care contraction: PC revenue declined 6.3% y/y to $32.7M (AHT divestiture, Centriq sunset headwinds) with ~$1M+ of one-time/non-recurring revenue inflating Q4; management guides PC to low-single-digit growth in 2025 on analytics/ERP/SaaS .
  • Policy/macro uncertainty: Management pointed to Washington policy uncertainty as elongating some decision cycles, raising near-term bookings timing risk despite stable demand interest (“no decision” often the reason deals don’t close) .

Financial Results

• YoY/Sequential context: Q4’24 revenue +2% y/y; adjusted EBITDA +44% y/y; management emphasized sequential margin progression through 2024 (11.4% → 14.8% → 16.5% → ~20%) .
• Versus estimates: Wall Street consensus from S&P Global was unavailable via our feed at time of analysis (data access limit). We therefore cannot quantify beat/miss vs. consensus for revenue/EPS this quarter. Note: One analyst on the call characterized FY25 EBITDA guidance as “pretty strong above consensus” while revenue guidance bracketed consensus .

Segment revenue mix

Additional operating KPIs

Notes:

• Patient Care Q4 included >$1M combined from one-time contract settlement and non-recurring revenue; FH growth included an estimated ~2% contribution from Viewgol .
• Operating income in Q4’24 was $5.688M vs. $(41.781)M in Q4’23 (impairments in prior year) .

Guidance Changes

• Color: Q4 included a “couple of million dollars” of non-recurring benefits (patient care one-time revenue, labor timing, seasonal G&A); Q1’25 guide embeds a step-down from Q4’s elevated exit margin. Expect Q2 margin step-down (client conference, merit cycle), then improvement in 2H’25. Management reiterates mid‑single‑digit revenue growth and ~200 bps margin expansion in 2025 .

Earnings Call Themes & Trends

Management Commentary

• “Margins improved steadily each quarter in 2024 starting at 11.4% in Q1 and growing to 20% by Q4.” — Chris Fowler, CEO .
• “Global workforce remains a major lever for us to achieve our margin expansion goals… goal for 2025 is to double [CBO clients supported offshore] to 60%.” — Chris Fowler, CEO .
• “Q4 adjusted EBITDA margin increased to 19.7%… driven by cost rationalization actions, global offshore savings and one-time benefits.” — Vinay Bassi, CFO .
• “Contracted revenue… is in the low 90s percent of revenue at the beginning of the year… recurring revenues also in the mid-90s.” — Vinay Bassi, CFO .
• “We expect financial health to have higher growth… and low single digit growth in Patient Care [in 2025].” — Vinay Bassi, CFO .

Q&A Highlights

• Bookings slippage and visibility: Several large Q4 deals slipped due to customer-specific and policy timing factors; one has closed in Q1, others expected 1H25. Management emphasized improved interlock between sales/ops/finance to forecast bookings-to-revenue conversion without assuming a “blind” 90-day lag .
• Contracted/recurring revenue base: Contracted revenue at start of year in the “low 90s%” of revenue; total recurring revenues in the “mid‑90s%,” supporting guidance visibility .
• 2025 segment outlook: Financial Health expected to grow above company average; Patient Care low-single-digit, driven by analytics and partner ERP offerings .
• Renewals and concentration: ~60 key CBO customers up for renewal over 24 months; base is diversified (no outsized single client); renewals spread through the year with programs to maximize retention .
• Policy environment: Management sees policy uncertainty (potential healthcare funding shifts) elongating sales cycles but not halting demand; many losses are “no decision” rather than competitive displacements .

Estimates Context

• Consensus estimates (S&P Global) were unavailable via our data connection at the time of analysis due to an SPGI daily request limit error. As a result, we cannot quantify beat/miss versus consensus for Q4 revenue or EPS.
• On the call, one analyst characterized FY25 adjusted EBITDA guidance as “pretty strong above consensus,” while revenue guidance “bracketed consensus,” implying potential upward estimate revisions for profitability if execution continues .

Key Takeaways for Investors

• Mix shift and operating discipline are driving sustainable margin expansion; offshore execution (30% → 60% target) and cost controls underpin the 200 bps guided margin lift in 2025 .
• Financial Health remains the growth engine (FH +7.3% y/y in Q4; segment to outgrow company in 2025); Patient Care stabilizes with new analytics/ERP and SaaS migration, but likely below FH growth .
• Bookings volatility is the key near-term swing factor; slipped Q4 deals should convert in 1H25, but policy/timing risk persists; monitor Q1/Q2 bookings and renewal retention on ~60 CBO accounts .
• Cash generation inflecting: Q4 CFFO $10.3M; FY CFFO $32.1M; leverage down to ~3x with stated deleveraging goal (~2.5x), enhancing equity option value if growth resumes .
• 2025 guide calls for 4% revenue growth at midpoint and stronger EBITDA; expect Q2 margin seasonality dip before 2H acceleration—quarterly cadence matters for trading setups around Q1/Q2 prints .
• Watch KPI proof points: recurring revenue sustain (~94%), FH gross margin expansion from offshore, nTrust cross-sell wins (24 wins in 2024), and traction in 100–400 bed hospitals pipeline .

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Supplementary detail and cross-references

• Q4 detail: Total revenue $87.360M; FH $54.652M; PC $32.708M; GAAP diluted EPS $(0.38); non-GAAP EPS $0.05; adjusted EBITDA $17.240M (19.7%); recurring revenue 93.6%; bookings $14.265M .
• Gross margins: Total 53%; FH 49.1%; PC 59.6% (Q4’24) .
• FY 2024: Revenue $339.166M; adjusted EBITDA $53.090M; CFFO $32.135M; cash $12.324M at 12/31/24 .
• Guidance: Q1’25 revenue $85–$88M and adjusted EBITDA $14–$16M; FY’25 revenue $345–$360M and adjusted EBITDA $59–$66M .

Prior quarters used for trend analysis:

• Q3 2024: Revenue $83.830M; GAAP EPS $(0.66); non-GAAP EPS $(0.21); adjusted EBITDA $13.822M (16.5%); bookings $20.950M; FH mix 64.7% .
• We searched for Q2 2024 documents (8-K, press releases, transcripts) but did not find them in the available corpus for this analysis window [ListDocuments: 2024-04-01 to 2024-11-06 returned none].