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SEGMENT REPORTING | 9 Months Ended
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Sep. 30, 2023
Segment Reporting [Abstract] |
SEGMENT REPORTING | SEGMENT REPORTING Our chief operating decision makers ("CODM") previously utilized the following three operating segments, "Acute Care EHR", "Post-acute Care EHR" and "TruBridge". However, in the fourth quarter of 2022, the Company made a number of changes to its organizational structure and management system to better align the Company's operating model to its strategic initiatives. As a result of these changes, the Company revised its operating segments. The new operating and reportable segments, based on our three distinct business units with unique market dynamics and opportunities, are "RCM", "EHR", and "Patient Engagement". These segments represent the components of the Company for which separate financial information is available that is utilized on a regular basis by the CODM in assessing segment performance and in allocating the Company's resources. Management evaluates the performance of the segments based on revenues and adjusted EBITDA. The Company previously evaluated the performance of the segments based on segment gross profit. Management believes adjusted EBITDA is a useful measure to assess the performance and liquidity of the Company as it provides meaningful operating results by excluding the effects of expenses that are not reflective of its operating business performance. Our CODM group is comprised of the Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer. Accounting policies for each of the reportable segments are the same as those used on a consolidated basis. The segment disclosures below for the three and nine months ended Septemberr 30, 2022 have been recast to conform to the current year presentation. Adjusted EBITDA consists of GAAP net income as reported and adjusts for (i) deferred revenue purchase accounting adjustments arising from purchase allocation adjustments related to business acquisitions; (ii) depreciation expense; (iii) amortization of software development costs; (iv) amortization of acquisition-related intangible assets; (v) stock-based compensation; (vi) severance and other non-recurring charges; (vii) interest expense and other, net; (viii) (gain) loss on contingent consideration; and (ix) the provision (benefit) for income taxes. There are no intersegment revenues to be eliminated in computing segment revenue. The CODM do not evaluate operating segments nor make decisions regarding operating segments based on assets. Consequently, we do not disclose total assets by reportable segment. The following table presents a summary of the revenues and adjusted EBITDA of our three operating segments for the three and nine months ended September 30, 2023 and 2022:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) | 2023 |  | 2022 |  | 2023 |  | 2022
Revenues by segment: |  |  |  |  |  |  |
RCM | $ | 46,582 |  |  | $ | 46,875 |  |  | $ | 142,973 |  |  | $ | 134,200 |
EHR |  |  |  |  |  |  |
Recurring revenue |  |  |  |  |  |  |
Acute EHR | 27,925 |  |  | 27,237 |  |  | 83,886 |  |  | 81,333 |
Post-acute EHR | 3,594 |  |  | 3,817 |  |  | 11,230 |  |  | 11,504 |
Total recurring EHR revenue | 31,519 |  |  | 31,054 |  |  | 95,116 |  |  | 92,837 |
Non-recurring revenue |  |  |  |  |  |  |
Acute EHR | 2,624 |  |  | 3,500 |  |  | 8,460 |  |  | 9,467 |
Post-acute EHR | 350 |  |  | 395 |  |  | 1,075 |  |  | 1,551 |
Total non-recurring EHR revenue | 2,974 |  |  | 3,895 |  |  | 9,535 |  |  | 11,018 |
Total EHR revenue | $ | 34,493 |  |  | $ | 34,949 |  |  | $ | 104,651 |  |  | $ | 103,855 |
Patient Engagement | 1,637 |  |  | 1,003 |  |  | 5,943 |  |  | 5,369 |
Total revenues | $ | 82,712 |  |  | $ | 82,827 |  |  | $ | 253,567 |  |  | $ | 243,424 |
Adjusted EBITDA by segment: |  |  |  |  |  |  |
RCM | $ | 4,623 |  |  | $ | 8,750 |  |  | $ | 18,205 |  |  | 26,395 |
EHR | 5,669 |  |  | 5,751 |  |  | 17,394 |  |  | 17,621 |
Patient Engagement | (570) |  |  | (1,152) |  |  | (6) |  |  | (1,345) |
Total adjusted EBITDA | $ | 9,722 |  |  | $ | 13,349 |  |  | $ | 35,593 |  |  | $ | 42,671 |
The following table reconciles net income to adjusted EBITDA:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) | 2023 |  | 2022 |  | 2023 |  | 2022
Net income (loss), as reported | $ | (3,562) |  |  | $ | 2,161 |  |  | (3,315) |  |  | 13,350 |
Deferred revenue and other purchase accounting adjustments | — |  |  | — |  |  | — |  |  | 109 |
Depreciation expense | 297 |  |  | 622 |  |  | 1,392 |  |  | 1,890 |
Amortization of software development costs | 2,194 |  |  | 1,024 |  |  | 5,506 |  |  | 2,283 |
Amortization of acquisition-related intangibles | 4,014 |  |  | 4,486 |  |  | 12,043 |  |  | 12,917 |
Stock-based compensation | 1,038 |  |  | 1,864 |  |  | 2,162 |  |  | 5,284 |
Severance and other non-recurring charges | 7,392 |  |  | 410 |  |  | 15,313 |  |  | 1,671 |
Interest expense and other, net | 2,847 |  |  | 1,416 |  |  | 7,836 |  |  | 3,255 |
(Gain) loss on contingent consideration | — |  |  | 589 |  |  | — |  |  | (992) |
Provision (benefit) for income taxes | (4,498) |  |  | 777 |  |  | (5,344) |  |  | 2,904 |
Total adjusted EBITDA | $ | 9,722 |  |  | $ | 13,349 |  |  | $ | 35,593 |  |  | $ | 42,671 |
Certain of the items excluded or adjusted to arrive at adjusted EBITDA are described below: •Deferred revenue and other purchase accounting adjustments - Deferred revenue purchase accounting adjustments includes acquisition-related deferred revenue adjustments, which reflect the fair value adjustments to deferred revenues acquired in business acquisitions. The fair value of deferred revenue represents an amount equivalent to the estimated cost plus an appropriate profit margin, to perform services related to the acquiree's software and product support, which assumes a legal obligation to do so, based on the deferred revenue balance as of the acquisition date. We add back deferred revenue and other adjustments for adjusted EBITDA because we believe the inclusion of this amount directly correlates to the underlying performance of our operations. •Amortization of acquisition-related intangibles - Acquisition-related amortization expense is a non-cash expense arising primarily from the acquisition of intangibles in connection with acquisitions or investments. We exclude acquisition-related amortization expense from adjusted EBITDA because we believe (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired intangible assets. •Stock-based compensation - Stock-based compensation expense is a non-cash expense arising from the grant of stock-based awards. We exclude stock-based compensation expense from adjusted EBITDA because we believe (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of the timing and valuation of grants of new stock-based awards, including grants in connection with acquisitions. •Severance and other non-recurring charges - Non-recurring charges relate to certain severance and other charges incurred in connection with activities that are considered non-recurring. We exclude non-recurring expenses (primarily related to costs associated with our recent business transformation initiative and non-recurring lease termination costs) and transaction-related costs from adjusted EBITDA because we believe (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods. •(Gain) loss on contingent consideration - The purchase agreement for our acquisition of TruCode in 2021 contained contingent consideration, or "earnout," provisions whereby the previous shareholders of TruCode would receive additional consideration at the conclusion of a one-year period beginning on the acquisition date and ending on the first anniversary of the acquisition date, depending on the achievement of certain profitability targets. After the initial measurement period, U.S. GAAP requires that any adjustments to the estimated fair value of this contingent liability, including upon final determination of amounts due, should be recorded in the relevant period's earnings. We exclude gains on contingent consideration from adjusted EBITDA because we believe (i) the amount of such gains in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such gains can vary between periods.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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