Inventurus Knowledge Solutions Limited analyst Q&A

Thank you very much. We will now begin the question and answer session. We will take the first question from the line of Keyur Ladhawala from ValueQuest. Please go ahead.

Yes. Thanks for the comprehensive commentary and congratulations to Sachin and the management team on the acquisition. Sachin, my first question to you was, can you give us some color on the competitive intensity in the rural segment across both the EHR and RCM verticals? Can we leverage IKS's learnings and deep domain expertise to enhance TruBridge's right to win in the rural segment? And also if you could help us understand what is the existing overlap between the RCM and EHR clients?

Super. Thank you for the wishes, Keyur, and for the thoughtful question, I appreciate it. Saransh if you don't mind going to Slide 18 so that I can answer Keyur's question on the competitive intensity. So Keyur, as if you're able to see the slide, what we've done is we've laid out the key competitors across all of the key offerings that TruBridge has within the rural healthcare market. So let's first focus on the EHR, right in the middle. Like I was trying to say, the EHR market is already very mature for the rural healthcare setting. I think it's already more or less a two-player market with TruBridge and MEDITECH being the leading pairs and Oracle after some of the setbacks they've had in their traditional Cerner large health system market segment. They've been coming a little bit downstream to try and play in this rural market. So if you want, the way to think about it is TruBridge and MEDITECH are the two dominant incumbents and Oracle Cerner is a challenger. I couldn't tell you yet, I'm not smart enough or not close enough to say whether Oracle is a worthy challenger in this space or not, but they are certainly trying to make inroads from an EHR perspective. So I feel like that the EHR install base that they have is pretty stable, as it anyways mostly is in mature markets like this. And I think actually if we're able to modernize the EHR rapidly, we'll be able to perhaps even capture market share further. Second, if you look at the other big growth opportunities in the RCM stack, the RCM part of the platform system action and honestly Keyur really there, it is really like MEDITECH, for example, does not really have an RCM offering at all. In fact, prior to this transaction, MEDITECH was having conversations with us about whether we should combine our RCM capabilities and our RCM part of the platform system of action with their EHR. So they don't have an RCM offering. Oracle has formally exited the RCM space after trying it twice. And so what you have is what I call the sort of pure-play BPO vendors, if you would, Med-Metrix and CorroHealth, that are trying to focus on this small-to-mid rural hospital market. And so I would say that at least in the 700-odd hospitals where the TruBridge EHR is installed, it creates a very, very defensible and competitive right to win for TruBridge. And I think you also asked what is the penetration of TruBridge in their current EHR install base from an RCM perspective. And in that current install base like I was saying of a 650 million they're about$220 million, so about 30%. So about 230-240 hospitals of their 700 EHR install are today buying RCM from them. So it creates a pretty large white space from RCM. So in those 700, the right to win is dramatic, which is the lowest-hanging fruit growth opportunity for us. And where IKS will further bolster their right to win in that install base is that we have a much more efficient global delivery model. TruBridge has done its own attempts to build its own captive presence in India, but has really not had that much success. And one of the other complementary natures of this thesis is the fact that IKS already has an optimized offshore-enabled delivery model for the human-in-the-loop part of RCM. So I think in that RCM stack, the right to win in the balance 500-odd hospitals where the RCM doesn't exist is dramatic. And then even beyond the 700, which is another 1,500 hospitals in the rural setting where TruBridge already has 300 customers, 400 customers, there is an opportunity to actually go full-stack RCM there even if the EHR is not installed. So I think tremendous rights to win there. As it relates to encoder, which is their TruCode business, there are two very large players, 3M and Optum, but given how large they are, they've actually become sort of aircraft carriers. So I will say that in the encoder business, you can think of TruCode as a challenger rather than the incumbent. But what we've seen is over the last 2 to 3 years, there's been tremendous growth in that business and including IKS, for example, using TruCode. So I think given that many companies tried to completely autonomize medical coding and failed when they realized that it's a deterministic outcome that GenAI really can't service by itself. I think the encoder or the TruCode opportunity is significant. On clinical documentation, obviously, if this transaction closes as you can imagine we would manifest our entire Scribble suite in their entire install base and because of their EHR incumbency, their take on that is just a no-brainer, I mean the customers are dying for it. And we will install it in a way where it's not just a post-visit ambient clinical documentation but it's a true co-pilot, like I was saying earlier. And then on the patient engagement side, while they have good technology and by the way Phreesia has been generally struggling in the market. Our patient engagement is already winning against Phreesia and others in the marketplace. It's actually one of the most successful parts of our platform system of action lately, especially as we rolled out our latest version, which is an AI-first and which consists of a patent-pending technology as well. And so I do think that there is an IKS offering. So think about it as in the clinical documentation and patient engagement the IKS offering will bolster their right to win dramatically. EHR continues to have a right to win which we will mature, encoder they are a challenger to the market, but they are gaining momentum and RCM we'll really, really have a tremendous right to win in their EHR install base and IKS's combination with them will enhance their right to win in even their non-EHR install base. Hope this answers your question, Keyur.

Yes, it does. Thanks, Sachin. And secondly so while you've laid out the rationale of the merger and the value creation opportunities quite well, could you also quantify the synergies that on the basis of your initial workings are likely to flow in?

So, that is the one thing I don't want to do, Keyur, right? I mean, the reason why I put out a 4-year True North is because what I don't want to do is, look, it is a strategic transformative acquisition. It will have short-term learnings, surprises. I can tell you that if you look at my track record and our company's track record and our management's track record as a public company over the last five quarters that we've declared. As a company even before we went public, we try to be in the space where we like to under-promise and over-deliver. And hence we intentionally took this strategy of putting a 4-year True North, but I will tell you that when we put a 4-year True North, we factored in a certain amount of uncertainty in the short term, learnings in the short term, mistakes perhaps new mistakes, hopefully not the same mistakes in the short term. And we still feel like this 4-year True North is what we feel that will be a good definition of success for us. I really would like to avoid going into the specifics of the journey from INR1,000 crores to INR3,000 crores in terms of what are the key drivers. I've given you the growth vectors, you understand already that this is a 40-year-old company with a very large G&A. There'll be synergies in G&A, they still have a very largely US-centric RCM delivery model. Remember they have 2,000-plus RCM FTEs between actually 3,000 RCM FTEs between US and India already of which 1,000-plus are in the US. So, obviously that creates both operating and G&A synergies, but again let's not go into the specifics. Give me what I ask of all of you is this is a strategic transformation. This is creating a long-term defensible strategic moat with a lot of thought and carefulness. I've put a 4-year True North, very hard for me to give you even further details even before transaction has closed.

Understood. No, fair Sachin. Thanks a lot and wish you all the best.

Thank you,

Thank you. We will take the next question from the line of Aashray Vasa from Nippon AIF. Please go ahead.

Hey, hi, hi morning. First of all, thanks for explaining the strategic rationale very, very clear. Two questions. First on, I mean our track record with AQuity suggests we are very strong at turning around, you know, slightly low-margin businesses, but my question is, how difficult is it to do what TruBridge does organically? I mean in the sense of access to rural etc., the EHR etc. Just trying to understand organically does it take too much time? Our four-year plan etc., is it just a thing that the opportunity came and we have taken it? That's the first one. And the second one is on TruBridge itself. Obviously the valuation multiple seems favorable for us in the sense their market cap etc., it's been struggling slightly in the last year from a market cap perspective. 6% CAGR over five years, 1.3% last year revenue growth, and there are some when I read about the recent results, there are some issues with regards to retention of customers, contracts, some you know, guidance that's on the revenue front. So just trying to understand the rationale from a seller's point of view? Yes, that's it. Thanks.

Okay, great. Thank you for those questions, Aashray. I guess the first part of the question was to put it simply, the timing of the synergies. And as you can imagine, we're not going to provide the details of when the timing plays out. We've provided a four-year timeline. And so as you can imagine, there'll be some synergies that are realized very quickly, right? We talked about significant synergies of being a public company, I mean it's a pretty significantly large number. Synergies around ESOP costs, other G&A synergies that'll get realized easily within sort of the first year of operations. Then there is the nature of synergies that are operational, right? Like I said, there's a huge RCM transformation opportunity both from a tech and globalization perspective. Now those synergies obviously take some time because you have to work with the customers to transform the customers, first get the customers comfortable about how they will get transformed from a delivery model perspective and then walk the customers through that journey, hold their hand through that journey. So I would say that the G&A synergies will probably come in ahead of the operational synergies. But I feel like, you know, over a two and a half to three year period all the synergies should be fully tucked in. And that's probably as much as I can say about the timing of the synergies. As it relates to TruBridge's own performance and the multiple that they are commanding in the market or not commanding in the market, look, I think the simple reality is that like I said earlier, they have tried two attempts in the past at globalizing their RCM operations. And they have been less than successful at those two attempts. So one of the complementary natures of this transaction was that IKS already has I won't necessarily call it a perfect but a highly optimized onshore-offshore delivery model as it relates to RCM and significant tech interventions in addition to the tech interventions they've already built. And so I think that was a very attractive aspect of the thesis, if you would, was that the one area where they have struggled in leveraging a globalized model is a strong suite of IKS. The other challenge that they had is because they were struggling in that area, you know, their ability to invest significantly in what needs to happen in the EHR from a modernization perspective, building other features of the platform system of action like clinical documentation, became a strain and a drain on their financials. And obviously with IKS coming in, one we already have those features, second, we have a much more agile as well as cost-optimized model to build technology rapidly as well. So I think all of those together really were becoming important parts of the combination and that's where the arbitrage in the multiple lies, is that, you know, one of the things that we said when we did AQuity was we're starting off as 24% pro forma, we'll get to early to mid-30s in we had said at that point between two to three years. We actually got there faster than we had thought and we actually got further than where we thought we were going to get. So I feel very similar, you're going to start off with 26% combined pro forma here and, you know, we feel like we'll be in the early 30s, you know, relatively rapidly. And that's how the synergies will play out and that's what makes it attractive. Now why did they decide to sell? Because I think they've realized that these core competencies are going to be critical and they felt like finding a partner that is able to bring these capabilities natively to them is a much better idea than continuing to try this to try to do this a third time after having tried to do it twice. They tried to first do it through an acquisition of a company called Viewgol, which didn't work very well, and then second they tried to do it in a captive way with using consultants that were helping them and that didn't go well either. So that's sort of the way to think about it.

Got it, perfect. Just on the first one, so organically it would have taken a lot of time and effort to get access to the rural hospitals, physicians, etc.? Just trying to understand, yes.

I'm sorry, were you saying that our ability to drive growth in their install base?

No, no, I'm saying without TruBridge could we have just as an organic entity got access into, yes, the rural part of, yes?

No, no, even if we would have, we would not have gotten access first of all, you're talking about 700 hospitals in their customer base. To sell across 700 hospitals would be a decade, right, number one. And number two, the strategic thesis, where we would be the only company in the world that's truly building an integrated system of record with a platform system of action which is super defensible, that also made it tremendously attractive. So yes, I think doing this organically would be next to impossible.

Perfect, perfect. Thank you so much, all the best.

Thank you.

Thank you. We will take the next question from the line of Vishnu Gopal from Marcellus Investment Managers. Please go ahead

Yes. So congrats on the acquisition. And I just had a question regarding the nature of the client. So just wanted to understand, like, what are the nuances of the RCM management between, let's say, a larger hospital system versus the rural healthcare system? That's one. And the second part of the question was, I mean, when the AQuity acquisition was consummated, you had mentioned that the long-tail clients were kind of getting rationalized to focus on the larger guys. So but in the rural healthcare system, by nature all the clients are smaller in size. So how do you look at rationalization or the lack of it in those client base? And does it also signal even in the organic business a readiness to focus on the smaller clients going ahead? Thank you.

Great, great questions, Vishnu. Thank you so much. So I think let me take the second part of your question first, which is our ability to handle a large number of small customers. And as you know, there are already 700 hospitals in their EHR install base, and most of the RCM is delivered to customers in their EHR install base. Now while IKS does not have a traditional track record of handling a large number of small customers, but we like handling a small number of large customers, Vishnu, the difference here is

all of the RCM customers are operating on the same operating system, which is their EHR. So what happens is even though the number of customers is large, the type of work that you're doing the RCM for, which is all rural hospital care delivery, which is very similar to physician care delivery by the way, the type of work is the same. And second, all of it is being done in their one EHR. Now in the traditional IKS business, when we have the small number of large customer thesis, that is because what happens, Vishnu, is there each of the customers often is in a different system, which is the system of record is different, so we have to integrate with a different system of record because we are Switzerland, right? And the type of care delivery that they are doing is different, right? We have single specialty customers. Within a single specialty, there's derm, there's GI, there's urology, there's ophthalmology, all of that, right? So each of those is different in nature. Then there's multi-specialty, then there's hospital-owned medical groups that have a totally different orientation. So the beauty here is the type of work that we're doing RCM for, number one, and the system on which we're doing RCM is all one, which allows us for 80% of the work to treat this as one large customer and drive a lot of efficiencies. So even though there are 300 small RCM customers, they're all on the same system with the exact same type of service delivery, which is rural healthcare of which 70%-80% is outpatient. It allows us to build that standardized engine and treat them as one large customer. Now for the balance 20%, yes, we have to create a slightly differentiated customer management layer where each of the customers will feel like they are being treated uniquely, and that investment for managing the customers differently has already been factored into our plan. But I think it's very important, I think your question is brilliant to know that why does IKS feel comfortable in managing a large number of small customers in TruBridge customer base when traditionally in the IKS business or even in the AQuity business, we were not comfortable handling a large number of small customers. But I hope this clarifies, because it's a very, very important distinction.

Sure, this clarifies. And just on the nuances of the RCM business between larger hospital systems and the rural hospital systems.

Yes. So clearly, like I was saying, these rural hospital systems, even though they are hospitals, 70% of the care being delivered is outpatient care, which is IKS' traditional strong suite, right? Physician delivery, physician-based outpatient care is IKS' strong suite. The balance 30% also, if you really think about it, is critical care but there is no really tertiary, quaternary care, specialty surgeries, complex surgeries. Those type of infrastructure doesn't exist in rural settings at all. That's where the RCM for tertiary, quaternary care can get a little bit more complex. That's why when we analyzed the RCM capabilities needed to do justice to these rural hospital settings, they are very proximate from a capability perspective to the strengths that we already have and that's how we were comfortable.

And it's also important to note, I think Sachin mentioned this earlier, that for a larger hospital system, because of the scale, what they end up spending on RCM is somewhere in the zip code of 4% to 5%. That's almost double in a rural community hospital. They end up spending somewhere in the zip code of 7% to 10% on RCM. So the value proposition from outsourcing becomes even more stronger for these smaller hospitals.

Great, great. Thank you and wish you all the best.

Thank you, Vishnu.

Thank you.

Thank you. We will take the next question from the line of Chirag Kachhadiya from Motilal Oswal Financial Services. Please go ahead.

Yes, hi, Sachin. I have one question. As you mentioned, the integration will take four to five quarters' timeframe. Can you specify the steps or actions you will take to, you know, integrate the operations of this TruBridge?

Okay. So, look, I think there's obviously a significant amount of work involved in the integration, right? And so the first aspect of the integration is to learn. And given that we are both public companies and from an FTC perspective, the Federal Trade Commission perspective, we really can't do too much work prior to the close of the transaction. So the first two, three months will be to really understand the operating nuances of their structure and work with them together to arrive at what a combined operating structure would look like. That's the first thing. Then maybe by Q2 post-close, we will start embarking on making our journey towards that new operating structure, start to realize some of the G&A benefits a combined operating structure, and slowly but surely start to embark on the operational transformation. Probably, it'll be early Q3 by the time we start the operational transformation. Because we'll also, you know, a big part of the first two quarters will be meeting with their customer base, understanding the nuances of the customer base. It's always fun to have an outside-in view. But when you dive in, the inside-out view becomes much more informative and instructive about the nuances that have to be applied in how you do this. And so I would say Q1 post-close learning, Q2 actioning, start to combine into one organization structure, start to realize G&A, really start to understand the customer base, and perhaps towards the end of Q2, early Q3 post-close is when we start actioning the operational transformation. There's also a lot of work to be done in understanding the next level details of the tech debt, you know, what it will take to overcome the tech debt because a big vector of this will be to modernize the EHR and move it to a true cloud-native AI-first model. So there's the tech piece, yes. And we do all this in a way where we keep a keen focus on one, customer retention. Customer retention is key. That's the gold mine of this transaction. Second, talent retention. The key talent will have to be identified in the first quarter and retaining the talent will be critical. And third, as we embark on our transformation, how do we keep a keen eye on energizing growth again? So I think those would be the three key vectors of or three key considerations that we will keep in mind as we embark on the integration effort.

Okay. And Sachin, if we look at the employee -- total number of employee headcount in TruBridge versus our entity, I mean, and if we compare it with the overall revenue which both these entities make, I mean, there's a vast difference. So why is that?

Simply because that's what I said, right? The EHR business is a pure tech business. So that really has a very, very low marginal cost. And even the RCM business, like I said, is highly tech-led. And so that's really where the magic is, right? And this is even before they've made it truly AI-first. And so that's what I keep saying is having that system of record combined right now with the platform system of action for RCM and eventually all the systems creates a fundamentally different leverage in how much human-in-the-loop you need to be able to orchestrate these actions, and that's what you see as evidence in their numbers. They are a tech organization.

Okay, all the best.

Thank you, Chirag.

Let's take the next question. We'll come back to Vamshi when he's able to.

Thank you. We will take the next question from the line of Abhishek Gupta from Axis Asset Management Company. Please go ahead.

Good morning, Sachin sir. Thank you so much for the explanation on the acquisition and the presentations. So sir, just to start with, you know, just give me an example like how does this EHR capabilities which you are acquiring differentiate from the other EHR bodies like Epic and all, and how are you going to take these capabilities towards the bigger hospital and all?

So actually, Abhishek, that is not our intent at all. We are not trying to take this EHR capability to the bigger hospitals. What we're doing is we are taking the EHR that is already installed in the small hospital base and we're going to deeply integrate our platform system of action with the EHR to make it a combination that becomes highly sticky and defensible and both financially advantageous to the customers and to us over a period of time. We are not envisioning taking this EHR to large hospitals. The only endeavor will be once we modernize their EHR, we will attempt to take it from the 0 to 50 beds, which is where they're strong, to the next segment, which is sort of the 50 to 200 beds. But the idea is not to take it to the large hospital segment at all. In fact, in that segment, we don't even want to be known as an EHR player at all because there we integrate our platform system of action with the prevalent EHRs in that market, so there is no question of trying to drive that EHR in that market.

Sir, last question from my side is just that we -- as we have always said that we will grow faster than the industry. And as the both companies get combined are we still maintaining that guidance?

Okay, so I think somebody has background. See on the growth, like I said, I need two-three quarters to better understand this market once it closes to know what exactly the growth trajectory will look like in the rural healthcare market. We're not changing our aspirations in our traditional market segment at all. That market segment, which is the physician group market segment, we are continuing to say we will want to continue to capture market share, which means we'll grow faster than the 12% that the industry is growing at. In this market, I think and that's why I've put out a four-year true north on the earning side, because I don't want to make the mistake of prematurely being able to tell what the growth trajectory will look like. I'm very confident or rather fairly confident on where I think the margin trajectory of the business will go. But on the growth, I want to wrestle with the growth for two-three quarters after close and then I'll have a better understanding of what the growth will look like in the TruBridge traditional rural healthcare.

We will take the next question from the line of Madhuchanda Dey from MC Pro.

I have some very fundamental questions, pardon me for my lack of understanding of this acquisition. So the first question is, as you mentioned, that the first low-hanging fruit for you would be to take the RCM to the hospitals where they are not present but present with the EHR. And the second stage would be to take it to the larger audience where they are not present at all but within that range of smaller hospitals. So my question is, what makes you confident that your RCM solutions will be superior to the competitor or put it differently, what does this acquisition bring to the RCM solution which was not there? Is it something to do with technology, something to do with cost? If you could just shed light on that?

Yes, so look, I think in the install base where they already have the EHR, when we integrate our RCM stack deeply with the EHR for example, if you like I was calling out the denial prediction engine, right? Now what is RCM? In the end, you send claims for the care that was provided to the insurer, the insurer pays you for the claims or denies the claims. If they deny the claims, you have to work on those claims and still try to get them collected by providing supporting documentation, changing coding, whatever it is right? And so it's a very reactive cycle. Now if you're deeply integrated in the EHR on a real-time basis at the point of charge entry, at the point of clinical documentation, if you are able to predict through this AI training corpus that we would have created by in a compliant way leveraging the data in the EHR, which has both the clinical context but also the labelling of the actions taken and the outcomes achieved from those actions, you will now start to predict denials. If you predict denials correctly and you fix them at the point of care itself, then when the claim goes out, it doesn't get denied at all. And fundamentally that transforms the RCM outcomes. Also, it reduces the cost of the RCM because you don't have to do that much effort at the back end, right? So I think it totally transforms both the outcomes and the cost of the RCM, which if you do not have deep integration into the system of record, you are not able to do those things on a real-time basis even if you were able to produce those insights asynchronously. So I think that would be one clear example of an RCM intervention through this integration that fundamentally transforms both outcomes of RCM and cost of outcomes. There are obviously several other interventions like those that come into play, including but not limited to the real-time coding interventions. The real-time clinical documentation interventions, the whole process of prior authorization within the revenue cycle that often leads to a whole bunch of uncompensated care. So a bunch of examples like that. Really good question and hopefully this example gives you a sense of why our right to win in the TruBridge EHR customer base through the deep EHR integration of our RCM stack fundamentally transforms outcomes and cost.

But my question is, this TruBridge is already a technology company, why could they not do it on their own?

Yes, and I think that's where I was trying to go with this earlier is that, remember, in this platform system of action, it needs tech but it also needs human-in-the-loop. All the human-in-the-loop that they've generally had has been in the US. And that creates a different type of a cost structure. And it really needs globalized human-in-the-loop to successfully orchestrate this because remember, some of these interventions are not autonomous from a technology perspective. It's tech plus human-in-the-loop. And the human-in-the-loop TruBridge in all candour has not been able to execute successfully from a globalized human-in-the-loop perspective, which IKS has the expertise around and that we will bring again as a complementary strength to process.

So it's basically your global delivery model that will be a great help to them, right? To this entity. last question that I have is that you are already a user of TruCode as you mentioned, as IKS, right? So what value do you add to TruCode through this acquisition? I mean, because you mentioned something like a $650 million kind of opportunity.

Yes, so look, first of all, what we bring is yes, can you hear me, ma'am?

Yes, sure. Yes.

Okay. Yes, so the way to think about it is one, if you look at IKS's traditional customer base, it's the large physician groups and the large health systems. TruCode is a very applicable product for all of those. So the value we bring to TruCode is an access to that market that TruBridge never had access to, right? So it allows us to bring TruCode as an offering to the large hospitals and the large health systems and the large physician groups, which TruCode never had access to. That's number one. And the second, we are executing coding at a very different scale than TruBridge does themselves. And so remember TruCode also is a tool that continues to learn. And hence all of the work that we are doing in coding will now become a virtuous feedback loop into TruCode and we keep enhancing the rules that are embedded in TruCode and allow it to assist better and better over a period of time. So two

one, the market of the large systems and the large physician groups. And two, all the feedback of coding at a different scale than the scale that TruBridge has.

Thank you. We will take the next question from the line of Chetan Shah from Jeet Capital. Please go ahead.

Yes, hi. Sachin and team, congratulations on a great acquisition. Just one specific question. Can you just quantify the size of opportunity? We know the addressable opportunity for IKS is $200 billion plus, but post this acquisition, what's the size of the cake will look like? That's the only question I have. Thank you.

So you're talking about what is the additional TAM that we get from this transaction?

Yes, Sachin. Yes, yes.

Yes. Sure. So, like I said, it's a combination, right? So when you look at the TruBridge EHR install base, the TAM opportunity in just their EHR install base is about $600 million for our platform system of action. A large part of it comes from RCM, but there are other parts of our system of action that also would get installed in their install base potentially. So, there's at least a $600 million opportunity in their EHR captive install base. Now when you expand that opportunity into their non-EHR RCM customers, that multiplies very rapidly because like I said, that is already a $1 billion outsourced market growing at 12% to 13%. And so, depending on what share of that market we are able to capture, that outsourced market itself is about $1billion today, and that total market is about $3.5 billion to $4 billion. So that becomes another market, an adjacent market in the rural hospital setting that we can sell to. So, this is I would say maybe the serviceable obtainable TAM immediately, lowest-hanging fruit is a little north of $600 million, and then there's a $3 billion plus TAM of rural hospitals that are very adjacent that could also be TruBridge's customers but not EHR customers, that also becomes part of the TAM.

Yes, thanks. And just for my clarification, our existing set of offering which we do traditional opportunity, can this be getting integrated into our newer business which we acquired and getting it merged, and will that expand the size of the TAM as an overall offering, maybe, you know, four quarters down the line or six quarters down the line once everything gets integrated? I'm just trying to understand that apart from a completely new vertical as a business opportunity, are we also expanding our existing offering itself as a size of TAM so that, you know, if one wants to look at the business from a decade point of view as a strength and opportunity? Some color on that.

Yes, the way to think about that would be that our platform system of action as a percentage of the rural hospital's revenue overall would be at least about 5% of their revenue. So if you really think about it in the TruBridge install base, if our full platform system of action were to be installed, that itself becomes about $1.5 billion. The full platform manifest. And so that's when if you're talking about our capabilities fully manifesting into TruBridge's install base even outside of RCM, that becomes about a $1.5 billion opportunity in their EHR install base.

Thank you. We will take the next question from the line of Vamshi Krishna from Kotak Securities. Please go ahead.

Hi, thanks for the opportunity again and congrats on the acquisition, Sachin. So most of my questions on the business have been answered. Just one question on the calculation of pro forma earnings. I think TruBridge also had around $12 million impact from amortization of acquired intangibles related to the acquisition that you alluded to. So why has that not been included in the calculation?

No, so Vamshi, as you know, right, the entire thing will go into the pot. So, if you look at their schedule, right, their schedule was on a reducing trend over the next few years. What will happen now is that the separate parts of the business, which is the EHR business and within the financial health, maybe the coding and the and the financial health business, will get evaluated separately and based on the length of the relationships that they've had with their customers, a new asset life will be created, right? So, while you see historically what the numbers were, it was on a declining trend. And what we've now put is sort of a constant number, and we can discuss that in more detail. But as you know, right, this is also going to be validated again by valuation experts. But that's it for now.

Okay. So, the PAT accretion of $5 million, so is there a revision to that number likely given the higher charge and that…

There might be minor uptick or downtick. But again, see, we haven't taken any synergies in that PAT accretion, right? I mean, our interest cost we've assumed at the highest possible levels…

I understand that, Saransh. Just the $12 million number is a little large compared to the PAT accretion that you have mentioned. So that's where I was just wondering what the number could have been for FY '27.

We don't expect that number to, yes, Vamshi, we don't expect that number to move significantly.

Understood.

Thank you very much. Ladies and gentlemen, we will take that as the last question for today. For any further queries, you may reach out to the Investor Relations team of IKS Health Limited. I now hand the conference over to Mr. Saransh Mundra for closing comments. Over to you, sir.

Thank you everyone, thank you for joining at such short notice. If you have any more questions, please feel free to reach out. My details are there on the Press Release and most of you have my contact.

Yes, and thank you for all your support and interest so far, and we're excited about this next phase of journey to create a truly differentiated leader in now two segments of the US healthcare market and one that has probably a most effective defensible and competitive moat over a period of time. Thank you everyone. Bye-bye.

Thank you members of the management. On behalf of ICICI Securities Limited, that concludes this conference. Thank you all for joining us today and you may now disconnect your lines. Thank you. Please note that this transcript has been edited for readability.