TruBridge's Q1 2025: Navigating Contradictions in Offshore Strategy, Policy Impacts, and EHR Market Dynamics

Offshore expansion and staff conversion, impact of policy changes on customer decisions, offshore staffing and cost savings, EHR market and revenue model, and customer uncertainty and demand for TruBridge's solutions are the key contradictions discussed in TruBridge's latest 2025Q1 earnings call.



Financial Performance Improvement:
- TruBridge reported adjusted EBITDA of $18.2 million in Q1 2025, nearly doubling from the previous year's $10 million.
- The increase was driven by revenue of $87 million, which exceeded the high end of guidance, and improvements in working capital management and cash flow from operations.

Bookings and Customer Retention:
- The company reported Q1 bookings of $22 million, ahead of expectations despite a strong Q1 from the previous year.
- Customer retention in the Patient Care segment was at 98%, excluding Centriq, and Financial Health client renewal was high, with 9 out of 11 clients renewed.

Operational and Workforce Initiatives:
- TruBridge's Financial Health division plans to increase offshore support to 60% by the end of 2025, aiming to automate CBO workflows using AI.
- The company is investing in a centralized workplace to streamline operations and strengthen team dynamics, addressing customer satisfaction challenges.

Revenue Growth and Margin Expansion:
- Financial Health revenue increased by 5% year-over-year, contributing to 64% of total revenue.
- Gross margins improved to 54.7%, driven by revenue growth and labor cost reductions from offshore transitions.

Debt Repayment and Leverage Reduction:
- TruBridge paid down an additional $3 million of principal on its debt in Q1 2025, bringing the total repayments since January 2024 to $26 million.
- The net leverage ratio improved to 2.4x, down from 4x a year ago, reflecting the company's strong financial performance and debt reduction efforts.