📣 CPSI rebrands as TruBridge, officially transitioning on March 4, 2024. 🌈 📈 The company finished strong in Q4 with $26M in bookings, driven by RCM and EHR growth. 🚀 💻 The integration of Viewgol is on track, with the goal of a 70% offshore, 30% U.S.-based workforce. 💡 💰 CPSI is focused on capital allocation and technology investments to return to growth and operational leverage. 💪 🔮 For Q1, revenue is expected to be $82-$84M and adjusted EBITDA $8.5-$9.5M, with full-year revenue at $340-$350M and adjusted EBITDA at $45-$50M. 🔮
In the healthcare technology and services sector, CPSI, now rebranding as TruBridge, has been making strides in delivering comprehensive financial and clinical solutions to small to midsized hospitals. Their core offerings include Revenue Cycle Management (RCM) and Electronic Health Records (EHR) solutions.
Recently, the company reported impressive financial results for the year 2023, with revenue coming in at $339 million and adjusted EBITDA at $48 million. In the final quarter of the year, CPSI signed $26 million in bookings, representing a 5.5% increase from the same period in 2022. This growth was predominantly driven by a 5.9% increase in RCM bookings.
The reasons behind the uptick in RCM bookings include the local labor market for community hospitals being unable to meet all their needs, the complexity of RCM growing day by day, and the diminishing stigma surrounding outsourcing billing efforts. These factors have contributed to the increasing demand for outsourced RCM solutions.
Additionally, CPSI recently announced the acquisition of Viewgol, with the primary goal of bringing the globalized workforce in-house and ending their reliance on third-party outsourcing. The integration of Viewgol is progressing as planned, with the company aiming to achieve a workforce comprised of 70% offshore and 30% U.S.-based employees. Although there may be some initial margin pressure as the global capacity is ramped up, the long-term goal is to reap the benefits of having an in-house global workforce.
As the company continues its transformation, it remains committed to embracing technology and modernizing its infrastructure. This dedication to technology is evident in their use of AI to automate the RCM process and the cloud to improve capabilities and enhance services. By doing so, TruBridge aims to consistently deliver best-in-class solutions to their customers.
Overall, the recent product and service developments at CPSI have demonstrated a strong focus on the evolving needs of the healthcare industry, with a commitment to leveraging technology to provide innovative solutions to their clients. The successful execution of their strategy has contributed to the company’s solid financial results and the ongoing confidence of their customers.
CPSI, soon to be TruBridge, is embarking on an exciting transformation with a clear long-term vision to return to growth and realize the operational leverage that their global workforce can achieve. The company plans to accomplish this by focusing on capital allocation, ensuring technology investments have a sharp focus on ROI, and continuing to embrace technology and modernize their infrastructure.
In the medium-to-long term, the company’s key financial goals include achieving revenue of $340 million to $350 million and adjusted EBITDA of $45 million to $50 million in 2024. Additionally, they aim to achieve a workforce comprised of 70% offshore and 30% U.S.-based employees while maintaining the same quality of service for all customers.
However, there are also risks that the company may face in the future. These include the economic impact on the communities they serve, regulatory changes, and the increasing complexity of reimbursements. To mitigate these risks, CPSI plans to continue investing in their people, technology, and services, and by staying on top of the changing landscape of healthcare.
Looking ahead, CPSI’s major upcoming milestones include the completion of the Viewgol integration, the transition to the TruBridge brand, and the continued expansion of their offerings to existing markets. The company is not currently planning to enter new markets or offer new products/services in the future, but they remain committed to investing in their technology and services to meet the evolving needs of their clients.
In summary, CPSI is focused on returning to growth, achieving operational efficiency, and maintaining a competitive edge in the healthcare technology and services market. Despite the challenges that lie ahead, the company remains optimistic and committed to delivering high-quality solutions and services to their clients and the communities they serve.
Questions:
Answers:
Vinay Bassi: “The flat margins in 2024 are due to a full-year budget with full bonus accrual and the smaller increases from the full-time hirings in the second half of 2023. The benefits from vendor savings and the offshore workforce ramping up will be realized in the second half of the year.”
Chris Fowler: “The customer feedback has been positive about the rebranding, making it easier to understand our offerings. The demand revolved around insights and improving efficiencies, which aligns with our analytics platform. My past experiences at Nielsen and Avaya have taught me the importance of focus on controllable costs, CapEx, and revenue forecasting.”
Vinay Bassi: “From my past experiences, I’ve learned the importance of having a partnership with the business, understanding that revenue is the key indicator of success, and being focused on improving free cash flow.”
Buying Argument: CPSI, soon to be TruBridge, is a company with over 20 years of experience in delivering financial and clinical solutions for their clients and communities. Their expertise and resources, including bodies and specialized skills, enable them to help clients navigate the increasingly complex reimbursement landscape and provide consistency and success in delivery. With a proven track record, they have the ability to sell their success to prospective clients, making them a strong contender in the market.
Selling Argument: While CPSI’s expertise and resources are valuable, the market for outsourcing solutions in the healthcare industry is still largely made up of in-house solutions. The economic impact of the jobs in the community and the concept of outsourcing continue to present challenges. Additionally, the labor market specific to the communities they serve is not expanding enough to meet all of their needs, making it difficult to scale. These factors, combined with the lack of regulatory push to drive to the outsourcing model, may make it a riskier investment for those looking for immediate returns.
