TruBridge Inc, formerly known as Computer Programs and Systems, Inc., is a leading provider of healthcare technology and services for hospitals and medical practices across the United States. With a focus on revenue cycle management (RCM), electronic health records (EHR), and patient engagement solutions, TruBridge has established itself as a trusted partner for over 1,500 healthcare organizations.

Company History and Evolution

The company's history dates back to 1979 when it was founded as a software development firm serving the healthcare industry. Over the decades, TruBridge has evolved, expanding its product offerings and geographic reach through both organic growth and strategic acquisitions. In 2016, the company acquired Healthland Holding Inc., strengthening its foothold in the post-acute care market and expanding its acute care customer base. This acquisition also added post-acute care capabilities through Healthland's American HealthTech subsidiary. However, the integration of Healthland proved to be a significant challenge for the company in the years following the acquisition.

In 2020, TruBridge faced additional challenges as the COVID-19 pandemic impacted its hospital customers and led to delayed purchasing decisions. The company responded by implementing cost-cutting measures and shifting more of its workforce to remote work. Despite these headwinds, TruBridge was able to maintain profitability through the pandemic.

In 2023, TruBridge made another key acquisition when it bought Viewgol, LLC, a provider of RCM analytics and outsourcing services. This acquisition strengthened TruBridge's RCM capabilities and offshore presence. The integration of Viewgol has been an ongoing focus for the company.

Throughout its history, TruBridge has faced competition from larger healthcare IT vendors as well as ongoing challenges related to the complex and ever-changing regulatory environment in the healthcare industry. However, the company has demonstrated resilience and an ability to adapt to industry changes. TruBridge has maintained a strong customer base of rural and community hospitals by providing tailored solutions and services to meet their unique needs.

Rebranding and Reorganization

In 2024, TruBridge underwent a rebranding effort, changing its name to TruBridge Inc. to better reflect its focus on delivering comprehensive healthcare solutions. This rebranding coincided with a reorganization of the company's operating and reporting segments, consolidating its operations into two primary business units: Financial Health and Patient Care.

Financial Health Segment

The Financial Health segment, which accounts for approximately 65% of TruBridge's revenue, provides RCM technology and services for acute and ambulatory healthcare settings. This business unit has seen strong organic growth, driven by the increasing complexity of medical billing and the rising demand for outsourced RCM solutions. The company's acquisition of Viewgol, LLC in 2023 further bolstered its Financial Health offerings, adding advanced analytics and complementary outsourcing services.

In the third quarter of 2024, the Financial Health segment's recurring revenues were $53.1 million, representing 98% of total Financial Health revenues. The acquisition of Viewgol in October 2023 contributed $5.2 million to Financial Health revenues in this quarter. Excluding the Viewgol acquisition, Financial Health revenues increased by $2.5 million, or 5%, compared to the third quarter of 2023, driven by new contract wins partially offset by decreased revenues due to customer attrition. The segment's adjusted EBITDA increased by $4.9 million, or 107%, in the third quarter of 2024 compared to the same period in 2023, primarily due to the increased revenues and margin growth from the Viewgol acquisition.

Patient Care Segment

The Patient Care segment focuses on delivering comprehensive acute care EHR solutions and related services to hospitals, primarily those with fewer than 100 beds. While this segment has faced some headwinds, including the divestiture of the American HealthTech (AHT) post-acute care business in 2024, TruBridge remains committed to driving growth through new product offerings, such as its Multiview ERP solution and advanced analytics tools.

Patient Care revenues decreased by $6.6 million, or 18%, in the third quarter of 2024 compared to the third quarter of 2023. Recurring Patient Care revenues, which include support and maintenance, third-party subscriptions, and SaaS revenues, decreased by $6.1 million, or 19%, primarily due to the sale of AHT and a decline in support revenues from customer attrition and migration to SaaS arrangements. Non-recurring Patient Care revenues, which include installation revenues from the sale of acute and post-acute care solutions, decreased by $0.5 million, or 14%, also due to the sale of AHT. The Patient Care segment's adjusted EBITDA decreased by $0.8 million, or 16%, in the third quarter of 2024 compared to the same period in 2023, driven by the decline in revenues.

Financials

Financially, TruBridge has demonstrated a commitment to improving its operating performance and cash flow generation. In 2024, the company reported revenue of $339.2 million and adjusted EBITDA of $53.1 million, representing year-over-year growth of 12%. This margin expansion was driven by the company's focus on cost optimization, including the expansion of its global workforce and ongoing process improvements.

For the most recent fiscal year, TruBridge reported annual revenue of $339.44 million, with a net loss of $45.79 million. The company generated annual operating cash flow of $1.06 million and negative free cash flow of $22.35 million.

In the most recent quarter, TruBridge reported revenue of $87.36 million, with a net loss of $5.71 million. Year-over-year revenue growth was 2%, driven by growth in the Financial Health segment partially offset by declines in the Patient Care segment due to the divestiture of American HealthTech, Inc. (AHT) and the sunsetting of the Centriq platform.

Overall, TruBridge generated total revenues of $83.8 million in the third quarter of 2024, an increase of $1.1 million, or 1%, compared to the third quarter of 2023. Net loss for the third quarter of 2024 was $9.8 million, or $0.66 per basic and diluted share, compared to a net loss of $3.6 million, or $0.24 per basic and diluted share, in the third quarter of 2023. The increase in net loss was primarily due to increased amortization of capitalized software development costs and higher interest expense.

Looking ahead, TruBridge is well-positioned to continue its growth trajectory. The company's initial 2025 guidance calls for revenue between $345 million and $360 million, with adjusted EBITDA in the range of $59 million to $66 million. This guidance reflects management's confidence in the company's ability to capitalize on the increasing demand for its integrated RCM and EHR solutions, as well as its ongoing efforts to enhance operational efficiency and customer satisfaction. For Q1 2025, TruBridge is guiding for revenue between $85 million and $88 million, and adjusted EBITDA between $14 million and $16 million. The Q1 2025 guidance midpoint implies 4% revenue growth and 600 basis points of margin expansion compared to Q4 2024.

It's worth noting that TruBridge exceeded the high end of their guidance ranges for revenue and adjusted EBITDA in 2024. The company has also improved its forecasting and accounting processes to provide more predictable and achievable guidance.

Liquidity

As of the most recent quarter, TruBridge's debt-to-equity ratio was 1.03. The company had cash and cash equivalents of $8.59 million, with $39.60 million available under its revolving credit facility. TruBridge has a $160 million revolving credit facility and a $70 million term loan facility. The company's current ratio was 1.70, and its quick ratio was 1.69, indicating a relatively healthy short-term liquidity position.

Risks and Challenges

TruBridge faces several risks that investors should be aware of. The healthcare industry is highly regulated, and changes in government policies or reimbursement models could impact the company's operations. Additionally, the company operates in a competitive landscape, with the need to continually innovate and differentiate its offerings to maintain its market position.

Furthermore, TruBridge's financial performance has been impacted by various one-time events, such as the divestiture of AHT and the sunsetting of its Centriq product line. While the company has taken steps to address these challenges, investors should closely monitor TruBridge's ability to execute on its strategic initiatives and maintain financial discipline.

Industry Trends

The healthcare industry has seen significant changes to provider reimbursement by the U.S. federal government, followed by commercial payers and state governments. There is increasing pressure on healthcare organizations to reduce costs and increase quality while transitioning from fee-for-service to value-based reimbursement models. This dynamic has increased demand for healthcare IT solutions and services like those provided by TruBridge.

Conclusion

Overall, TruBridge's transformation into a more focused, operationally efficient healthcare solutions provider positions the company for continued success. Its strong customer relationships, diversified product portfolio, and commitment to innovation make it an attractive investment opportunity for those seeking exposure to the growing healthcare technology sector. While challenges remain, the company's recent financial performance and forward-looking guidance suggest that TruBridge is on a path to sustained growth and improved profitability in the coming years.