TruBridge, Inc. — Earnings Release 2023

Aug 9, 2023

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CONTACT Tracey Schroeder Chief Marketing Officer Tracey.schroeder@cpsi.com (251) 639-8100

CPSI ANNOUNCES SECOND QUARTER 2023 RESULTS

MOBILE, ALA. (August 9, 2023) – CPSI (NASDAQ: CPSI), a healthcare solutions company, today announced results for the second quarter ended June 30, 2023.

Second Quarter 2023 Financial Overview

All comparisons are to the quarter ended June 30, 2022, unless otherwise noted.

• Bookings of $21.9 million compared to $23.8 million

• Total revenue of $84.6 million compared to $82.7 million

• RCM revenue of $47.8 million compared to $46.8 million

• RCM revenue represented 58.2% of CPSI’s total recurring revenue and 56.4% of CPSI’s total revenue

• GAAP net loss of $(2.8) million and non-GAAP net income of $5.7 million

• GAAP loss per diluted share of $(0.20) and non-GAAP earnings per diluted share of $0.40

• Adjusted EBITDA of $11.2 million compared to $13.2 million

• Cash provided by operations of $717,000 during the three months ended June 30, 2023

Chris Fowler, chief executive officer of CPSI, said, “This was a challenging quarter for CPSI. We are undergoing a significant and transformative change as an organization. The results we expect to ultimately come from the meaningful initiatives we have put in place over the past several quarters have not come to fruition just yet.

“Despite the headwinds we faced in the second quarter, we continued to grow our pipeline, saw further stabilization of our electronic health record (EHR) customer base, and underwent necessary measures to best position CPSI for the future. Our topline guidance for the year remains unchanged, but we have updated our expectations for adjusted EBITDA to reflect the impact from outsized expenses in 2023. I know we are in a stronger position today than when I stepped into this role, and I remain confident that this year will be an important one as we establish a foothold for the future of CPSI,” added Fowler.

Financial Outlook[1]

For the full year 2023, the Company expects:

• Revenue of $340 million to $350 million, unchanged from prior guidance

1 Excluding revenues, the Company does not reconcile Adjusted EBITDA or non-GAAP net income to the corresponding GAAP financial measures, as certain items that impact such GAAP financial measures such as severance and other nonrecurring charges, which may be significant, are outside the Company’s control and/or cannot be reasonably predicted. Please see the “Explanation of Non-GAAP Financial Measures” at the end of this press release for detailed information on calculating nonGAAP measures. For a reconciliation of other non-GAAP financial measures, see the non-GAAP financial reconciliation tables in this release.

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CPSI Announces Second Quarter 2023 Results Page 2 August 9, 2023

• Adjusted EBITDA of $52.5 million to $54.5 million, a decrease from the prior guidance of $59 million to $63 million

• Non-GAAP net income of $25.6 million to $27.6 million (no prior guidance)

Conference Call Information

CPSI will hold a live webcast to discuss second quarter 2023 results today, Wednesday, August 9, 2023, at 3:30 p.m. Central time/4:30 p.m. Eastern time. A 30-day online replay will be available approximately one hour following the conclusion of the live webcast. To listen to the live webcast or access the replay, visit the Company’s website, www.cpsi.com.

About CPSI

CPSI has over four decades of experience in connecting providers, patients and communities with innovative solutions that support both the clinical and financial side of healthcare delivery. We provide business, consulting, and managed information technology (IT) services, including our industry leading HFMA Peer Reviewed® suite of revenue cycle management (RCM) offerings, to help streamline day-to-day revenue functions, enhance productivity, and support the financial health of healthcare organizations. Our patient engagement solutions provide patients and providers with the critical information and tools they need to share existing clinical data and analytics that support value-based care, improve outcomes, and increase patient satisfaction. We support efficient patient care across an expansive base of community hospitals and post-acute care facilities with electronic health record (EHR) product offerings that successfully integrate data between care settings. We make healthcare accessible through data-driven insights that support informed decisions and deliver workflow efficiencies, while keeping patients at the center of care. We are a healthcare solutions company. We clear the way for care. For more information, please visit www.cpsi.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified generally by the use of forward-looking terminology and words such as “expects,” “anticipates,” “estimates,” “believes,” “predicts,” “intends,” “plans,” “potential,” “may,” “continue,” “should,” “will” and words of comparable meaning. Without limiting the generality of the preceding statement, all statements in this press release relating to the Company’s future financial and operational results are forward-looking statements. We caution investors that any such forward-looking statements are only predictions and are not guarantees of future performance. Certain risks, uncertainties and other factors may cause actual results to differ materially from those projected in the forward-looking statements. Such factors may include: a public health crisis, such as the COVID-19 pandemic, and related economic disruptions; saturation of our target market and hospital consolidations; unfavorable economic or market conditions that may cause a decline in spending for information technology and services; significant legislative and regulatory uncertainty in the healthcare industry; exposure to liability for failure to comply with regulatory requirements; transition to a subscription-based recurring revenue model and modernization of our technology; competition with companies that have greater financial, technical and marketing resources than we have; potential future acquisitions that may be expensive, time consuming, and subject to other inherent risks; our ability to attract and retain qualified client service and support personnel; disruption from periodic restructuring of our sales force; potential inability to properly manage growth in new markets we may enter; exposure to numerous and often conflicting laws, regulations, policies, standards or other requirements through our international business activities; potential litigation against us; our reliance on an international workforce which exposes us to various business disruptions; potential failure to develop new products or enhance current products that keep pace with market demands; failure of our products to function properly resulting in claims for medical and other losses; breaches of security and viruses in our systems resulting in customer claims against us and harm to our reputation; failure to maintain customer satisfaction through new product releases free of undetected errors or problems; failure to convince customers to migrate to current or future releases of our products; failure to maintain our margins and service rates; increase in the percentage of total revenues represented by service revenues, which have lower gross margins; exposure to liability in the event we provide inaccurate claims data to payors; exposure to liability claims arising out of the licensing of our software and provision of services; dependence on licenses of rights, products and services from third parties; misappropriation of our intellectual property rights and potential intellectual property claims and litigation against us;

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CPSI Announces Second Quarter 2023 Results Page 3 August 9, 2023

interruptions in our power supply and/or telecommunications capabilities, including those caused by natural disaster; potential inability to secure additional financing on favorable terms to meet our future capital needs; our substantial indebtedness, and our ability to incur additional indebtedness in the future; pressures on cash flow to service our outstanding debt; restrictive terms of our credit agreement on our current and future operations; changes in and interpretations of financial accounting matters that govern the measurement of our performance; significant charges to earnings if our goodwill or intangible assets become impaired; fluctuations in quarterly financial performance due to, among other factors, timing of customer installations; volatility in our stock price; failure to maintain effective internal control over financial reporting; lack of employment or non-competition agreement with most of our key personnel; inherent limitations in our internal control over financial reporting; vulnerability to significant damage from natural disasters; market risks related to interest rate changes; potential material adverse effects due to macroeconomic conditions, including bank failures or changes in related regulation; and other risk factors described from time to time in our public releases and reports filed with the Securities and Exchange Commission, including, but not limited to, our most recent Annual Report on Form 10-K and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023. We also caution investors that the forward-looking information described herein represents our outlook only as of this date, and we undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this press release.

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CPSI Announces Second Quarter 2023 Results Page 4 August 9, 2023

2023 2022 Sales revenues: RCM 47,760 $ 46,814 $ EHR 34,967 34,143 Patient engagement 1,895 1,769 Total sales revenues 84,622 82,726 56.4% 56.6% Costs of sales: RCM 27,119 25,382 EHR 15,891 15,721 Patient engagement 1,123 950 Total costs of sales 44,133 42,053 Gross profit 40,489 40,673 Operating expenses: Product development 10,595 8,107 Sales and marketing 8,132 8,226 General and administrative 19,654 14,994 Amortization of acquisition-related intangibles 4,014 4,758 Total operating expenses 42,395 36,085 Operating income (loss) (1,906) 4,588 Other income (expense): Other income 78 278 Gain on contingent consideration - 330 Loss on extinguishment of debt - (125) Interest expense (2,664) (1,232) Total other income (expense) (2,586) (749) Income (loss) before taxes (4,492) 3,839 Provision (benefit) for income taxes (1,655) 763 Net income (loss) (2,837) $ 3,076 $ Net income (loss) per common share—basic (0.20) $ 0.21 $ Net income (loss) per common share—diluted (0.20) $ 0.21 $ Computer Programs and Systems, Inc. Condensed Consolidated Statements of Income (In '000s, except per share data) (Unaudited) Three Months Ended June 30,

2023 2022 96,391 $ 87,325 $ 70,158 68,905 4,306 4,367 170,855 160,597 54,302 45,780 32,239 31,061 1,769 1,893 88,310 78,734 82,545 81,863 20,434 16,169 15,089 15,269 34,604 28,421 8,029 8,430 78,156 68,289 4,389 13,574 346 435 - 1,580 - (125) (5,334) (2,149) (4,988) (259) (599) 13,315 (846) 2,126 247 $ 11,189 $ 0.02 $ 0.76 $ 0.02 $ 0.76 $ Six Months Ended June 30,

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CPSI Announces Second Quarter 2023 Results Page 5 August 9, 2023

Computer Programs and Systems, Inc. Condensed Consolidated Balance Sheets (In '000s, except per share data)

Assets Current assets Cash and cash equivalents Accounts receivable, net of allowance for expected credit losses of $2,796 and $2,854, respectively Financing receivables, current portion (net of allowance for expected credit losses of $111 and $223, respectively) Inventories Prepaid income taxes Prepaid expenses and other Total current assets Property & equipment, net Software development costs, net Operating lease assets Financing receivables, net of current portion (net of allowance for expected credit losses of $392 and $326, respectively) Other assets, net of current portion Intangible assets, net Goodwill Total assets Liabilities & Stockholders' Equity Current liabilities Accounts payable Current portion of long-term debt Deferred revenue Accrued vacation Other accrued liabilities Total current liabilities Long-term debt, net of current portion Operating lease liabilities, net of current portion Deferred tax liabilities Total liabilities Stockholders' Equity Common stock, $0.001 par value; 30,000 shares authorized; 15,099 and 14,913 shares issued, respectively Treasury stock, 570 and 483 shares, respectively Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity

June 30, 2023 (unaudited) Dec. 31, 2022 7,246 $ 6,951 $ 54,889 51,311 4,670 4,474 962 784 1,811 701 12,891 10,338 82,469 74,559 8,744 9,884 36,088 27,257 5,421 7,567 2,223 3,312 7,595 8,131 93,971 102,000 198,253 198,253 434,764 $ 430,963 $ 14,483 $ 7,035 $ 3,141 3,141 9,885 11,590 6,581 6,214 13,667 16,475 47,757 44,455 141,420 136,388 3,812 5,651 11,225 12,758 204,214 199,252 15 15 (17,032) (14,500) 193,399 192,275 54,168 53,921 230,550 231,711 434,764 $ 430,963 $

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CPSI Announces Second Quarter 2023 Results Page 6 August 9, 2023

Computer Programs and Systems, Inc. Condensed Consolidated Statements of Cash Flows (In '000s)

(Unaudited)

Operating activities: Net income Adjustments to net income: Provision for credit losses Deferred taxes Stock-based compensation Depreciation Loss on extinguishment of debt Amortization of acquisition-related intangibles Amortization of software development costs Amortization of deferred finance costs Gain on contingent consideration Non-cash operating lease costs Loss on disposal of PP&E Changes in operating assets and liabilities: Accounts receivable Financing receivables Inventories Prepaid expenses and other Accounts payable Deferred revenue Operating lease liabilities Other liabilities Prepaid income taxes Net cash provided by operating activities Investing activities: Purchase of business, net of cash acquired Investment in software development Purchases of property and equipment Net cash used in investing activities Financing activities: Treasury stock purchases Proceeds from long-term debt Payments of long-term debt principal Proceeds from revolving line of credit Payments of revolving line of credit Net cash provided by (used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period

2023 2022 247 $ 11,189 $ 181 1,202 (1,533) (724) 1,124 3,420 1,095 1,269 - 125 8,029 8,430 3,312 1,259 180 152 - (1,580) 1,211 940 117 - (3,806) (9,934) 940 3,376 (178) (273) (2,017) (4,547) 7,448 (469) (1,705) 2,625 (1,067) (940) (2,278) 1,126 (1,110) 2,457 10,190 19,103 - (43,814) (12,143) (8,739) (72) (88) (12,215) (52,641) (2,532) (4,248) - 575 (1,750) (1,813) 11,602 48,000 (5,000) (5,300) 2,320 37,214 295 3,676 6,951 11,431 7,246 $ 15,107 $ Six Months Ended June 30,

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CPSI Announces Second Quarter 2023 Results Page 7 August 9, 2023

Computer Programs and Systems, Inc. Consolidated Bookings (In '000s)

		Three Months	Three Months	Ended		Six Months	Six Months	Ended
In '000s		6/30/2023		6/30/2022		6/30/2023		6/30/2022
RCM(1)	$	13,648	$	14,847	$	25,748	$	23,414
EHR(2)		7,433		8,222		15,751		18,468
Patient engagement(1)		867		730		1,343		2,314
Total	$	21,948	$	23,799	$	42,842	$	44,196

(1) Generally calculated as the total contract price (for non-recurring, project-related amounts) and annualized contract value (for recurring amounts).

(2) Generally calculated as the total contract price (for system sales) and annualized contract value (for support) for perpetual license system sales and total contract price for SaaS sales.

Computer Programs and Systems, Inc. Bookings Composition (In '000s, except per share data) (Unaudited)

	6/30/2023 6/30/2022 6/30/2023 6/30/2022 Six Months Ended Three Months Ended
	RCM Net new(1) 3,196 $ 4,404 $ 7,616 $ 8,760 $ Cross-sell(1) 10,122 7,734 15,868 11,807 TruCode 330 2,709 2,264 2,847 EHR Non-subscription sales(2) 4,047 4,873 8,111 8,139 Subscription revenue(3) 2,408 2,383 5,615 8,454 Other 978 966 2,025 1,875 Patient engagement 867 730 1,343 2,314
	Total 21,948 $ 23,799 $ 42,842 $ 44,196 $

(1) “Net new” represents bookings from outside the Company’s core EHR client base, and “Cross-sell” represents bookings from existing EHR customers. In each case, such bookings are generally comprised of recurring revenues to be recognized ratably over a one-year period and an average timeframe for commencement of bookings-to-revenue conversion of four to six months following contract execution.

(2) Represents nonrecurring revenues that generally exhibit a timeframe for bookings-to-revenue conversion of five to six months following contract execution.

(3) Represents recurring revenues to be recognized on a monthly basis over a weighted-average contract period of five years, with a start date in the next 12 months and an average timeframe for commencement of bookings-to-revenue conversion of five to six months following contract execution.

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CPSI Announces Second Quarter 2023 Results Page 8 August 9, 2023

Computer Programs and Systems, Inc. Electronic Health Record (EHR)Revenue Composition (In '000s) (Unaudited)

		Three Months	Ended	June 30,		Six Months	Ended	June 30,
		2023		2022		2023		2022
Recurring revenues - EHR
Acute Care EHR	$	28,349	$	26,732	$	55,962	$	54,097
Post-acute Care EHR		3,729		3,792		7,636		7,687
Total recurring revenues - EHR		32,078		30,524		63,598		61,784
Nonrecurring revenues - EHR
Acute Care EHR		2,544		2,939		5,835		5,966
Post-acute Care EHR		345		680		725		1,155
Total nonrecurring revenues - EHR		2,889		3,619		6,560		7,121
Total EHR revenues	$	34,967	$	34,143	$	70,158	$	68,905

Computer Programs and Systems, Inc. Client Net Patient Revenue ("NPR") (In millions) (Unaudited)

Client NPR(1)	As of:
	3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 2,880 $ 2,946 $ 2,958 $ 2,991 $ 3,033 $ 3,205 $

(1)Client NPR defined as the aggregate annual net patient revenue for hospital customers contracted for our full-service revenue cycle outsourcing solution.

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CPSI Announces Second Quarter 2023 Results Page 9 August 9, 2023

Computer Programs and Systems, Inc. Adjusted EBITDA - by Segment (In '000s)

		Three Months	Three Months	Ended		Six Months	Six Months	Ended
In '000s		6/30/2023		6/30/2022		6/30/2023		6/30/2022
RCM	$	5,682	$	8,064	$	13,580	$	17,645
EHR		5,568		5,707		11,725		11,870
Patient engagement		(23)		(602)		564		(192)
Total	$	11,227	$	13,169	$	25,869	$	29,323

Computer Programs and Systems, Inc. Reconciliation of Non-GAAP Financial Measures (In '000s)

(Unaudited)

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Three Months Ended June 30, Six Months Ended June 30,
Adjusted EBITDA: 2023 2022 2023 2022
Net income (loss), as reported $ (2,837) $ 3,076 $ 247 $ 11,189
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Deferred revenue and other purchase accounting-related adjustments Depreciation expense Amortization of software development costs Amortization of acquisition-related intangibles Stock-based compensation Severance and other nonrecurring charges Interest expense and other, net Gain on contingent consideration Provision (benefit) for income taxes Total Adjusted EBITDA	- 30 597 690 1,826 733 4,014 4,758 (123) 1,703 6,819 667 2,586 1,079 - (330) (1,655) 763 11,227 $ 13,169 $	- 109 1,095 1,269 3,312 1,259 8,029 8,430 1,124 3,420 7,920 1,262 4,988 1,839 - (1,580) (846) 2,126 25,869 $ 29,323 $

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CPSI Announces Second Quarter 2023 Results Page 10 August 9, 2023

Computer Programs and Systems, Inc. Reconciliation of Non-GAAP Financial Measures (In '000s, except per share data) (Unaudited)

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Three Months Ended June 30, Six Months Ended June 30,
Non-GAAP Net Income and Non-GAAP EPS: 2023 2022 2023 2022
Net income (loss), as reported $ (2,837) $ 3,076 $ 247 $ 11,189
Pre-tax adjustments for Non-GAAP EPS:
Deferred revenue and other purchase accounting-related adjustments - 30 - 109
Amortization of acquisition-related intangible assets 4,014 4,758 8,029 8,430
Stock-based compensation (123) 1,703 1,124 3,420
Severance and other nonrecurring charges 6,819 667 7,920 1,262
Non-cash interest expense 90 79 180 152
Loss on extinguishment of debt - 125 - 125
After-tax adjustments for Non-GAAP EPS:
Tax-effect of pre-tax adjustments, at 21% (2,268) (1,546) (3,623) (2,835)
Tax shortfall (windfall) from stock-based compensation 7 - 57 (112)
Gain on contingent consideration - (330) - (1,580)
Non-GAAP net income $ 5,702 $ 8,562 $ 13,934 $ 20,160
Weighted average shares outstanding, diluted 14,200 14,469 14,168 14,425
Non-GAAP EPS $ 0.40 $ 0.59 $ 0.98 $ 1.40
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Explanation of Non-GAAP Financial Measures

We report our financial results in accordance with accounting principles generally accepted in the United States of America, or “GAAP.” However, management believes that, in order to properly understand our short-term and longterm financial and operational trends, investors may wish to consider the impact of certain non-cash or non-recurring items, when used as a supplement to financial performance measures that are prepared in accordance with GAAP. These items result from facts and circumstances that vary in frequency and impact on continuing operations. Management uses these non-GAAP financial measures in order to evaluate the operating performance of the Company and compare it against past periods, make operating decisions, and serve as a basis for strategic planning. These nonGAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by eliminating certain non-cash expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods more difficult, obscure trends in ongoing operations, or reduce management’s ability to make useful forecasts. In addition, management understands that some investors and financial analysts find these non-GAAP financial measures helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors.

As such, to supplement the GAAP information provided, we present in this press release and during the live webcast discussing our financial results the following non-GAAP financial measures: Adjusted EBITDA, Non-GAAP net income, and Non-GAAP earnings per share (“EPS”).

We calculate each of these non-GAAP financial measures as follows:

• Adjusted EBITDA – Adjusted EBITDA consists of GAAP net income as reported and adjusts for (i) deferred revenue purchase and other 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 intangibles; (v) stock-based compensation; (vi) severance and other non-recurring charges; (vii) interest expense and other, net; (viii) gain on contingent consideration; and (ix) the provision for income taxes.

• Non-GAAP net income – Non-GAAP net income consists of GAAP net income as reported and adjusts for (i) deferred revenue and other purchase accounting adjustments arising from purchase allocation adjustments related to business acquisitions; (ii) amortization of acquisition-related intangible assets; (iii) stock-based compensation; (iv) severance and other non-recurring charges; (v) non-cash interest expense; (vi) loss on extinguishment of debt and (vii) the total tax effect of items (i) through (v).

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CPSI Announces Second Quarter 2023 Results Page 11 August 9, 2023

• Adjustments to Non-GAAP net income also include the after-tax effect of the shortfall (windfall) from stock-based compensation and gain on contingent consideration.

• Non-GAAP EPS – Non-GAAP EPS consists of Non-GAAP net income, as defined above, divided by weighted average shares outstanding (diluted) in the applicable period.

Certain of the items excluded or adjusted to arrive at these non-GAAP financial measures 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 balances as of the acquisition date. We add back deferred revenue and other adjustments for non-GAAP financial measures 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 noncash expense arising primarily from the acquisition of intangible assets in connection with acquisitions or investments. We exclude acquisition-related amortization expense from non-GAAP financial measures 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. Investors should note that the use of these intangible assets contributed to revenue in the periods presented and will contribute to future revenue generation, and the related amortization expense will recur in future periods.

• 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 non-GAAP financial measures 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. Investors should note that stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods, and such expense will recur in future periods.

• Severance and other nonrecurring 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 transaction-related costs) from non-GAAP financial measures 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.

• Non-cash interest expense – Non-cash interest expense includes amortization of deferred debt issuance costs. We exclude non-cash interest expense from non-GAAP financial measures because we believe these non-cash amounts relate to specific transactions and, as such, may not directly correlate to the underlying performance of our business operations.

• Tax shortfall (windfall) from stock-based compensation – ASU 2016-09, Improvements to Employee Share-Based Payment Accounting , became effective for the Company during the third quarter of 2017 and changes the treatment of tax shortfall and excess tax benefits arising from stock-based compensation arrangements. Prior to ASU 2016-09, these amounts were recorded as an increase (for excess benefits) or decrease (for shortfalls) to additional paid-in capital. With the adoption of ASU 2016-09, these amounts are now captured in the period’s income tax expense. We exclude this component of income tax expense from non-GAAP financial measures because we believe (i) the amount of such expenses or benefits in any specific period may not directly correlate to the underlying performance of our business operations; and (ii) such expenses or benefits can vary significantly between periods as a result of the valuation of grants of new stock-based awards, the timing of vesting of awards, and periodic movements in the fair value of our common stock.

• Gain 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

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CPSI Announces Second Quarter 2023 Results Page 12 August 9, 2023

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 non-GAAP financial measures 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 significantly between periods.

Management considers these non-GAAP financial measures to be important indicators of our operational strength and performance of our business and a good measure of our historical operating trends, in particular the extent to which ongoing operations impact our overall financial performance. In addition, management may use Adjusted EBITDA, Non-GAAP net income and/or Non-GAAP EPS to measure the achievement of performance objectives under the Company’s stock and cash incentive programs. Note, however, that these non-GAAP financial measures are performance measures only, and they do not provide any measure of cash flow or liquidity. Non-GAAP financial measures are not alternatives for measures of financial performance prepared in accordance with GAAP and may be different from similarly titled non-GAAP measures presented by other companies, limiting their usefulness as comparative measures. Non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Additionally, there is no certainty that we will not incur expenses in the future that are similar to those excluded in the calculations of the non-GAAP financial measures presented in this press release. Investors and potential investors are encouraged to review the “Unaudited Reconciliation of Non-GAAP Financial Measures” above.

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