Butterfly Network Advances AI-Powered Aortic Valve and Aorta Screening with New Research and Training Tools
Aortic stenosis, a narrowing of the aortic valve, affects over 13% of Americans over 75 years old and is often missed until it's advanced and symptomatic. Studies(1, 2) suggest that a significant number of AS cases remain undiagnosed, particularly among underserved and aging populations. This delay in diagnosis is associated with higher risk procedures, worse outcomes, and increased healthcare costs. As earlier identification and treatments of AS are increasingly associated with better patient outcomes, the need for upstream, accessible screening is critical.
'This research shows a promising path forward where lower-level providers, not just cardiologists or trained sonographers, could screen for aortic stenosis using AI-assisted handheld ultrasound,' said Dr. John Martin, co-author of the study and Butterfly's Chief Medical Officer Emeritus. 'This opens the door to early detection in a wide variety of care venues including primary care offices, long term care facilities, urgent care facilities and even in the home.'
The study validated that an ML model trained on hospital-grade ultrasound images performed well when adapted to Butterfly's handheld ultrasound device. After fine-tuning the final layer of a neural network, researchers achieved an area under the receiver operator characteristic curve (AUROC) of 0.94 for differentiating between no aortic stenosis and any degree of aortic stenosis on handheld ultrasound images – a level of accuracy that supports potential clinical use in screening workflows.
In a related development, Butterfly has just released the latest expansion of its Butterfly ScanLab™ AI-powered ultrasound education app: an Aorta Exam Protocol. This educational app harnesses animations, anatomical labeling, and a quality indicator to help teach users how to scan the abdominal aorta and recognize normal anatomy. With that training, users can then use POCUS to detect life-threatening conditions like abdominal aortic aneurysms (AAA) and dissections. Designed for ease of use on an iPad, the module is included in every Butterfly membership and compatible with existing Butterfly probes.
Joseph DeVivo, President, CEO, and Chairman of Butterfly Network concluded, 'Early detection saves lives, but access to imaging remains a major barrier. This work is about democratizing diagnostics. With AI and education working hand in hand, we're empowering more providers to deliver proactive care in places that were never possible before.'
About Butterfly Network
Butterfly Network, Inc. (NYSE: BFLY) is a healthcare company driving a digital revolution in medical imaging with its proprietary Ultrasound-on-Chip™ semiconductor technology and ultrasound software solutions. In 2018, Butterfly launched the world's first handheld, single-probe, whole-body ultrasound system, Butterfly iQ. The iQ+ followed in 2020, and the iQ3 in 2024, each with improved processing power and performance by leveraging Moore's Law. The iQ3 earned Best Medical Technology at the 2024 Prix Galien USA Awards, a prestigious honor and one of the highest accolades in healthcare. Butterfly's innovations have also been recognized by Fierce 50, TIME's Best Inventions and Fast Company's World Changing Ideas, among other achievements.
Butterfly combines advanced hardware, intelligent software, AI, services, and education to drive adoption of affordable, accessible imaging. Clinical publications demonstrate that its handheld ultrasound probes paired with Compass™ enterprise workflow software, can help hospital systems improve care workflows, reduce costs, and enhance provider economics. With a cloud-based solution that enables care anywhere through next-generation mobility, Butterfly aims to democratize healthcare by addressing critical global healthcare challenges. Butterfly devices are commercially available to trained healthcare practitioners in areas including, but not limited to, parts of Africa, Asia, Australia, Europe, the Middle East, North America and South America; to learn more about available countries, visit: https://www.butterflynetwork.com/choose-your-country.
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Financial Guidance For the third quarter of 2025, TruBridge expects to generate: Total revenue of $85 million to $87 million Adjusted EBITDA of $14 million to $16 million For the full year 2025, TruBridge expects to generate: Total revenue of $345 million to $350 million; revised from $345 million to $360 million Adjusted EBITDA of $62 million to $67 million; revised from $60 million to $66 million Conference Call TruBridge will hold a conference call and live webcast to discuss second quarter 2025 results on Friday, August 8, 2025, at 7:30 a.m. Central time/8:30 a.m. Eastern time. To access this interactive teleconference, dial (877) 407-0890 and request connection to the TruBridge earnings conference call. 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 investor relations website, About TruBridge TruBridge proudly supports rural and community hospitals and providers in their efforts to stay strong, independent, and deeply rooted in the communities they serve. Backed by more than 45 years of healthcare experience and trusted by over 1,500 clients nationwide, we offer a mix of technology, services, and strategic expertise — including revenue cycle management, electronic health records (EHR) and analytics — all designed singularly for the realities of rural and community healthcare. With a steadfast commitment to keeping care local, TruBridge helps hospitals flourish as the economic heart of their communities, delivering high-quality, personal care close to home. For more information, visit 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: 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 personnel in a global workforce; disruption from periodic restructuring of our sales force; slower than anticipated development of the market for Financial Health services; potential inability to properly manage growth in new markets we may enter; potential failure to effectively implement a new enterprise resource planning software solution; exposure to numerous and often conflicting laws, regulations, policies, standards or other requirements through our domestic and international business activities; potential litigation against us and investigations; our use of offshore third-party resources; competitive and litigation risk related to the use of artificial intelligence; potential failure to develop new products or enhance current products that keep pace with market demands; failure of our products to provide accurate and timely information for clinical decision-making; 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; failure to protect our intellectual property rights; exposure to significant license fees or damages for intellectual property infringement; interruptions in our power supply and/or telecommunications capabilities; 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 various factors; volatility in our stock price; failure to maintain effective internal control over financial reporting; 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; we do not anticipate paying dividends on our common stock; actions of activist stockholders against us; and other risk factors described from time to time in our public releases and reports filed with the Securities and Exchange Commission. 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. TruBridge, Inc. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 * 2025 2024 * Revenues Financial Health $ 54,284 $ 54,509 $ 110,417 $ 107,948 Patient Care 31,445 31,091 62,520 61,769 Total revenues 85,729 85,600 172,937 169,717 Expenses Costs of revenue (exclusive of amortization and depreciation) Financial Health 29,308 30,269 56,499 59,866 Patient Care 11,962 13,073 24,284 25,237 Total costs of revenue (exclusive of amortization and depreciation) 41,270 43,342 80,783 85,103 Product development 8,113 8,207 16,360 18,894 Sales and marketing 8,041 7,815 13,450 14,408 General and administrative 18,076 18,878 37,540 38,274 Amortization 6,290 9,107 12,414 14,975 Depreciation 312 400 603 800 Total expenses 82,102 87,749 161,150 172,454 Operating income (loss) 3,627 (2,149 ) 11,787 (2,737 ) Other income (expense): Interest expense (3,065 ) (4,242 ) (6,447 ) (8,315 ) Other income 136 91 280 1,514 Total other expense (2,929 ) (4,151 ) (6,167 ) (6,801 ) Income (loss) before taxes 698 (6,300 ) 5,620 (9,538 ) Provision for (benefit from) income taxes (1,882 ) (1,912 ) 2,581 (3,296 ) Net income (loss) $ 2,580 $ (4,388 ) $ 3,039 $ (6,242 ) Net income (loss) per common share—basic $ 0.17 $ (0.29 ) $ 0.20 $ 0.42 Net income (loss) per common share—diluted $ 0.17 $ (0.29 ) $ 0.20 $ 0.42 Weighted average shares outstanding used in per common share computations: Basic 14,522 14,313 14,446 14,273 Diluted 14,522 14,313 14,446 14,273 *As described in the 2024 Annual Report, certain line items have been revised to correct an error related to the reversal of revenue from customers that was recognized improperly during 2023. These revisions increased revenue for the three and six months ended June 30, 2024 by $0.9 million and $1.7 million, respectively. These revisions had no cash flow consequences. Expand TruBridge, Inc. Condensed Consolidated Balance Sheets (In '000s, except per share data) June 30, 2025 (Unaudited) December 31, 2024 Assets Current assets Cash and cash equivalents $ 12,279 $ 12,324 Accounts receivable, net of allowance for expected credit losses of $5,208 and $5,861 56,432 53,753 Current portion of financing receivables, net of allowance for expected credit losses of $560 and $417 2,727 4,663 Inventories 444 767 Prepaid income taxes 3,459 2,886 Prepaid expenses and other current assets 14,473 15,275 Assets held for sale 445 606 Total current assets 90,259 90,274 Property & equipment, net 2,559 2,294 Software development costs, net 43,317 41,474 Operating lease right-of-use assets 2,617 3,092 Financing receivables, less current portion, less allowance for expected credit losses of $258 and $21 22 232 Other assets, less current portion 8,196 7,786 Intangible assets, net 70,608 76,707 Goodwill 172,573 172,573 Total assets $ 390,151 $ 394,432 Liabilities & Stockholders' Equity Current liabilities Accounts payable $ 19,672 $ 15,040 Current portion of long-term debt 2,980 2,980 Deferred revenue 9,368 10,653 Accrued vacation 5,235 4,770 Income taxes payable 623 3,538 Other accrued liabilities 12,302 15,994 Total current liabilities 50,180 52,975 Long-term debt, less current portion 163,108 168,598 Operating lease liabilities, less current portion 1,827 2,293 Deferred tax liabilities 1,863 1,871 Total liabilities 216,978 225,737 Stockholders' Equity Common stock, $0.001 par value; 30,000 shares authorized; 15,700 and 15,522 shares issued 15 15 Additional paid-in capital 204,376 201,066 Retained deficit (11,913 ) (14,952 ) Accumulated other comprehensive income 27 45 Treasury stock, 685 and 619 shares (19,332 ) (17,479 ) Total stockholders' equity 173,173 168,695 Total liabilities and stockholders' equity $ 390,151 $ 394,432 Expand TruBridge, Inc. Condensed Consolidated Statements of Cash Flows (In '000s) (Unaudited) Six Months Ended June 30, 2025 2024 * Operating activities: Net income (loss) $ 3,039 $ (6,242 ) Adjustments to net income (loss): Provision for credit losses 1,609 358 Deferred taxes (7 ) (5,224 ) Stock-based compensation 3,310 2,300 Depreciation 603 800 Gain on sale of business (53 ) (1,250 ) Amortization of acquisition-related intangibles 6,098 6,253 Amortization of software development costs 6,316 8,722 Amortization of deferred finance costs 259 213 Non-cash operating lease costs 537 897 Gain on disposal of property and equipment (120 ) - Changes in operating assets and liabilities: Accounts receivable (3,967 ) (1,085 ) Financing receivables 1,825 506 Inventories 323 (318 ) Prepaid expenses and other assets (1,827 ) 1,502 Accounts payable 5,082 5,750 Deferred revenue (1,284 ) 1,769 Operating lease liabilities (548 ) (583 ) Other liabilities (3,191 ) (2,375 ) Income taxes, net (3,487 ) (263 ) Net cash provided by operating activities 14,517 11,730 Investing activities: Purchase of business, net of cash acquired - (664 ) Sale of business, net of cash and cash equivalent sold 2,102 21,410 Investment in software development (8,159 ) (9,324 ) Purchases of property and equipment (902 ) (306 ) Net cash (used in) provided by investing activities (6,959 ) 11,116 Financing activities: Payments of long-term debt principal (1,750 ) (5,750 ) Proceeds from revolving line of credit 15,368 21,072 Payments of revolving line of credit (19,368 ) (33,379 ) Debt issuance cost - (529 ) Treasury stock purchases (1,853 ) (358 ) Net cash used in financing activities (7,603 ) (18,944 ) (Decrease) Increase in cash and cash equivalents (45 ) 3,902 Change in cash and cash equivalents included in assets sold - (41 ) Cash and cash equivalents, beginning of period 12,324 3,848 Cash and cash equivalents, end of period $ 12,279 $ 7,709 *As described in the 2024 Annual Report, certain line items have been revised to correct an error related to the reversal of revenue from customers that was recognized improperly during 2023. These revisions increased revenue for the six months ended June 30, 2024 by $1.7 million. These revisions had no cash flow consequences. Expand TruBridge, Inc. Consolidated Bookings (In '000s) (Unaudited) (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In '000s 2025 2024 2025 2024 Financial Health (1) $ 13,705 $ 13,458 $ 26,485 $ 27,849 Patient Care (2) 11,908 9,832 21,109 19,010 Total Bookings $ 25,613 $ 23,290 $ 47,594 $ 46,859 (1) Generally calculated as the annual contract value (2) Generally calculated as the total contract value for system sales and SaaS, and annual contract value for maintenance and support Annual Contract Value Effective January 2025, the Company will be providing bookings on an Annual Contract Value ('ACV') basis in addition to the reported bookings amounts, which has historically represented a mix of ACV and Total Contract Value ('TCV') for Patient Care. This new methodology of reporting total bookings at ACV represents the newly contracted revenue that is expected to be recognized over a twelve-month period. Over the course of 2025, the Company will be providing total bookings under both methodologies for year over year comparability before fully transitioning to ACV in 2026. The below table represents bookings at the ACV methodology for the three and six months ended June 30, 2025: Six Months Ended June 30, In '000s 2025 2025 Financial Health $ 13,705 $ 26,485 Patient Care 5,921 10,480 Total Bookings (ACV) $ 19,626 $ 36,965 Expand TruBridge, Inc. Bookings Composition (In '000s, except per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, In '000s 2025 2024 2025 2024 Financial Health Net new (1) $ 5,067 $ 6,453 $ 11,529 $ 15,446 Cross-sell (1) 8,638 7,004 14,956 12,402 Patient Care Non-subscription sales (2) 2,730 4,084 5,332 7,534 Subscription revenue (3) 9,178 5,749 15,777 11,477 Total Bookings $ 25,613 $ 23,290 $ 47,594 $ 46,859 (1) 'Net new' represents bookings from outside the Company's core client base, and 'Cross-sell' represents bookings from existing 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 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. Annual Contract Value Effective January 2025, the Company will be providing bookings on an Annual Contract Value ('ACV') basis in addition to the reported bookings amounts, which has historically represented a mix of ACV and Total Contract Value ('TCV') for Patient Care. This new methodology of reporting total bookings at ACV represents the newly contracted revenue that is expected to be recognized over a twelve-month period. Over the course of 2025, the Company will be providing total bookings under both methodologies for year over year comparability before fully transitioning to ACV in 2026. The below table represents bookings at the ACV methodology for the three and six months ended June 30, 2025: Three Months Ended June 30, Six Months Ended June 30, In '000s 2025 2025 Financial Health Net new (1) $ 5,067 $ 11,529 Cross-sell (1) 8,638 14,956 Patient Care Non-subscription sales (2) 2,730 5,332 Subscription revenue (3) 3,191 5,148 Total Bookings (ACV) $ 19,626 $ 36,965 Expand TruBridge, Inc. Adjusted EBITDA - by Segment (In '000s) (Unaudited) (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In '000s 2025 2024 * 2025 2024 * Financial Health $ 7,092 $ 8,209 $ 18,373 $ 15,006 Patient Care 6,651 $ 5,235 13,601 8,762 Total Adjusted EBITDA $ 13,743 $ 13,444 $ 31,974 $ 23,768 *As described in the 2024 Annual Report, certain line items have been revised to correct an error related to the reversal of revenue from customers that was recognized improperly during 2023. These revisions increased revenue for the three and six months ended June 30, 2024 by $0.9 million and $1.7 million, respectively. These revisions had no cash flow consequences. Expand TruBridge, Inc. Reconciliation of Non-GAAP Financial Measures (In '000s) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, Adjusted EBITDA: 2025 2024 * 2025 2024 * Total Adjusted EBITDA $ 13,743 $ 13,444 $ 31,974 $ 23,768 Adjusted EBITDA Margin 16.0 % 15.7 % 18.5 % 14.0 % Depreciation expense 312 400 603 800 Amortization of software development costs 3,245 5,980 6,316 8,722 Amortization of acquisition-related intangibles 3,046 3,126 6,098 6,253 Stock-based compensation 2,097 1,501 3,310 2,300 Severance and other nonrecurring charges 1,416 4,586 3,860 8,430 Interest expense and other income 2,929 4,151 6,340 8,051 Gain on disposal of property and equipment - - (120 ) - Gain on sale of AHT - - (53 ) (1,250 ) Income (loss) before taxes, as reported 698 (6,300 ) 5,620 (9,538 ) Provision for (benefit from) income taxes (1,882 ) (1,912 ) 2,581 (3,296 ) Net income (loss), as reported $ 2,580 $ (4,388 ) $ 3,039 $ (6,242 ) Net income (loss) margin 3.0 % (5.1 %) 1.8 % (3.7 %) *As described in the 2024 Annual Report, certain line items have been revised to correct an error related to the reversal of revenue from customers that was recognized improperly during 2023. These revisions increased revenue for the three and six months ended June 30, 2024 by $0.9 million and $1.7 million, respectively. These revisions had no cash flow consequences. Expand TruBridge, Inc. Reconciliation of Non-GAAP Financial Measures (In '000s, except per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, Non-GAAP Net Income and Non-GAAP EPS: 2025 2024 * 2025 2024 * Net income (loss), as reported $ 2,580 $ (4,388 ) $ 3,039 $ (6,242 ) Pre-tax adjustments for Non-GAAP EPS: Amortization of acquisition-related intangible assets 3,046 3,126 6,098 6,253 Stock-based compensation 2,097 1,501 3,310 2,300 Severance and other nonrecurring charges 1,416 4,586 3,860 8,430 Non-cash interest expense 130 107 260 213 Gain on sale of AHT - - (53 ) (1,250 ) After-tax adjustments for Non-GAAP EPS: Tax-effect of pre-tax adjustments, at 21% (1,405 ) (1,957 ) (2,830 ) (3,349 ) Tax shortfall (windfall) from stock-based compensation - 4 (670 ) 113 Non-GAAP net income $ 7,864 $ 2,979 $ 13,014 $ 6,468 Weighted average shares outstanding, diluted 14,522 14,313 14,446 14,273 Non-GAAP EPS $ 0.54 $ 0.21 $ 0.90 $ 0.45 *As described in the 2024 Annual Report, certain line items have been revised to correct an error related to the reversal of revenue from customers that was recognized improperly during 2023. These revisions increased revenue for the three and six months ended June 30, 2024 by $0.9 million and $1.7 million, respectively. These revisions had no cash flow consequences. Expand TruBridge, Inc. Revenue Composition (In '000s) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 * 2025 2024 * Recurring revenues Financial Health $ 53,322 $ 52,798 $ 108,586 $ 104,914 Patient Care 28,115 27,135 55,562 55,678 Total recurring revenues 81,437 79,933 164,148 160,592 Non-recurring revenues Financial Health 962 1,711 1,831 3,034 Patient Care 3,330 3,956 6,958 6,091 Total non-recurring revenues 4,292 5,667 8,789 9,125 Total revenues $ 85,729 $ 85,600 $ 172,937 $ 169,717 *As described in the 2024 Annual Report, certain line items have been revised to correct an error related to the reversal of revenue from customers that was recognized improperly during 2023. These revisions increased revenue for the three and six months ended June 30, 2024 by $0.9 million and $1.7 million, respectively. These revisions had no cash flow consequences. Expand 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 long-term 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 non-GAAP 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. We do not provide a reconciliation of the non-GAAP guidance measure Adjusted EBITDA for the second quarter of 2025 or the fiscal year 2025 to net income for such periods, the most comparable GAAP financial measure, due to the inherent difficulty of forecasting certain types of expenses and gains, without unreasonable effort, which affect net income but not Adjusted EBITDA. 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, Adjusted EBITDA Margin, 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) depreciation expense; (ii) amortization of software development costs; (iii) amortization of acquisition-related intangibles; (iv) stock-based compensation; (v) severance and other nonrecurring charges; (vi) interest expense and other income; (vii) gain on disposal of property and equipment; (viii) gain on sale of AHT; and (ix) the provision for (benefit from) income taxes. Adjusted EBITDA Margin – Adjusted EBITDA Margin is calculated as Adjusted EBITDA, as defined above, divided by total revenue. Non-GAAP net income – Non-GAAP net income consists of GAAP net income as reported and adjusts for (i) amortization of acquisition-related intangible assets; (ii) stock-based compensation; (iii) severance and other nonrecurring charges; (iv) non-cash interest expense; (v) gain on sale of AHT; and (vi) the total tax effect of items (i) through (v). 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: Amortization of acquisition-related intangibles – Acquisition-related amortization expense is a non-cash 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. Interest expense and other income – Interest expense and other income represents (i) interest incurred on our term loan and revolving credit facility and (ii) non-cash interest expense. We exclude interest expense from non-GAAP financial measures because we believe these amounts relate to specific transactions and, as such, may not directly correlate to the underlying performance of our business operations. Gain on disposal of property and equipment – Gain on disposal of property and equipment represents the excess of proceeds received over the book value of assets disposed of during the period. We exclude gain on disposal of property and equipment from non-GAAP financial measures because we believe (i) the amount of such gain or loss in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such gain or loss can vary significantly between periods. Gain on sale of AHT – Gain on sale of AHT represents the excess of proceeds received over the net assets sold from our sale of AHT, our previously wholly-owned post-acute business, in January 2024. We exclude gain on sale of AHT from non-GAAP financial measures because we believe the amount relates to a specific transaction 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. 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.
