Computer Programs and Systems, Inc. (NASDAQ:CPSI) Q2 2023 Earnings Call Transcript

As we continue to feel the same pressure that’s creating the opportunity for us with the new business, and we’re looking at how can we potentially accelerate that opportunity, while not deteriorating the service that we’re creating. And so we will continue to be very thoughtful about making sure that the service is high level, while seeing what levers we have to be able to put our foot on the gas, for lack of a better term, about seeing this conversion happen sooner rather than later. And on the first question, come back to – if you don’t mind helping me out again, you said it an opportunity to take more price from the customer.

Jeff Garro: Yes. Maybe a bit of a concern that labor pressures are causing demand for your services, but they’re also pressuring your profitability. So if you could speak to your ability to deliver these offerings more efficiently – these services more efficiently than your customers can and not just kind of take on their labor pressures.

Chris Fowler: Yes, absolutely. And so I think that speaks right into the heart of the globalization and then also automation. I would say, those are the two main levers we have the opportunity to pull from a providing this at a more efficient rate than our customers can. One dynamic that we’ve really another learning of the year is we were anticipating the ability to start with a higher offshore model from the beginning with our customers. And what we’re seeing is that as we take their employees on. That ramp is taking a little bit longer than we maybe had thought it would. So for an example of that, if we take on a customer that’s got 20 employees in their business office, we will take those employees on our own – as our employees and either continue to keep them on the account, find opportunities to up train them and place them throughout the organization.

And that just creates another dynamic for us to continue to keep that right-size of the percentage of onshore to offshore of cut of employees. But again, I think that’s a big part to our future success is again remember in these small, mid-size towns that they’re a crucial part of the employment process in the community, big part of the economic development. And so we’ve got to continue to be mindful of that to some extent. And so as have learned more of what that looks like, I think we’ve refined the approach of what the ramp to get to that maximum utilization is. And while it may take a little longer than we thought, I think over the long-term, as we sign three and five-year contracts, we’re going to be better, better down the road.

Jeff Garro: Got it. That helps. I’ll jump back into queue.

Operator: Thank you. [Operator Instructions] The next question is from the line of George Hill, Deutsche Bank. Please proceed with your question.

George Hill: Hey, good evening, guys, and thanks for taking the questions. I’ll say, Chris and Matt, you guys talk faster than I can take notes. So some of this might be a little bit repetitive. On the impact of the sale, that was a license sale that you guys thought was going to be a license sale that went SaaS, was that EMR or TruBridge, and I missed if you talked about what the revenue impact was I guess for both the quarter and the expectation for the year.

Matt Chambless: Yes. So as far as the license mix impact, you are calling out an important nuance here and that these were not EHR contracts. EHR contracts have been 100% SaaS. That’s all we’ve signed and probably the last three years. Instead these were large TruBridge contracts, specifically the True Code product, large True Code deals that frankly were a lot bigger than our average deal size that we see in total. Average deal size, average contract value for True Code arrangements is fairly small in the grand scheme of things. So these were kind of outliers. But that’s the context between these couple of sites that we were talking about. And sorry, what was the back half of that question, George?