CARECLOUD(CCLDO) - 2025 Q2 - Quarterly Results

Executive Summary Financial & Operational Highlights CareCloud achieved its first positive GAAP EPS of $0.04 in Q2 2025, with year-to-date revenue, adjusted EBITDA, and free cash flow all increasing, alongside strategic AI and acquisition initiatives Second Quarter 2025 Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $27.4 million | $28.1 million | -2.5% | | GAAP Net Income | $2.9 million | $1.7 million | +73% | | GAAP EPS | $0.04 | ($0.14) | N/A | | Adjusted Net Income | $3.3 million | $3.0 million | +10% | | Adjusted EBITDA | $6.5 million | $6.4 million | +1.6% | Year-to-Date 2025 Financial Highlights (vs. YTD 2024) | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $55.0 million | $54.1 million | +1.7% | | GAAP Net Income | $4.9 million | $1.4 million | +238% | | GAAP EPS | $0.02 | ($0.24) | N/A | | Adjusted EBITDA | $12.1 million | $10.1 million | +20% | | Free Cash Flow | $9.0 million | $4.9 million | +85% | - Recent strategic updates include achieving the first quarter of positive GAAP EPS since going public, launching an AI Center of Excellence set to scale to 500 team members, and completing two acquisitions with more under evaluation[4] Management Commentary Management highlighted the AI Center of Excellence as pivotal for innovation and efficiency, emphasizing positive GAAP EPS as a historic milestone achieved through successful turnaround efforts and strategic reinvestment - The launch of the AI Center of Excellence is a pivotal moment, intended to automate clinical workflows, optimize revenue cycle management, and position CareCloud at the forefront of intelligent healthcare transformation[5] - The company achieved positive GAAP EPS for the first time since going public in 2014, signaling continued momentum and financial strength following a successful turnaround in 2024[5] - CareCloud reported its fifth consecutive quarter of positive GAAP net income and is using internally generated free cash flow to pay monthly preferred stock dividends while reinvesting additional profits for future growth[5] 2025 Full-Year Guidance CareCloud reconfirmed its 2025 full-year guidance, projecting revenues of $111-$114 million, Adjusted EBITDA of $26-$28 million, and positive GAAP EPS of $0.10-$0.13 Fiscal Year 2025 Forward-Looking Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $111 – $114 million | | Adjusted EBITDA | $26 – $28 million | | GAAP Net Income Per Share (EPS) | $0.10 – $0.13 | - The revenue guidance is based on expectations from existing clients, organic growth from new clients, and anticipated small tuck-in acquisitions[7] Financial Statements Condensed Consolidated Balance Sheets As of June 30, 2025, CareCloud's total assets increased to $75.2 million, liabilities decreased to $19.2 million, and shareholders' equity grew to $56.1 million Balance Sheet Summary ($ in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $75,244 | $71,614 | | Total current assets | $31,090 | $24,800 | | Total Liabilities | $19,168 | $21,840 | | Total current liabilities | $16,240 | $19,580 | | Total Shareholders' Equity | $56,076 | $49,774 | Condensed Consolidated Statements of Operations Q2 2025 revenue was $27.4 million, with operating income rising to $3.0 million and net income growing 73% to $2.9 million, while year-to-date net income surged to $4.9 million Statement of Operations Summary - Three Months Ended June 30 ($ in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net Revenue | $27,377 | $28,090 | | Operating Income | $2,996 | $2,271 | | Net Income | $2,902 | $1,674 | | Net Income (Loss) Attributable to Common Shareholders | $1,537 | $(2,249) | | EPS (basic and diluted) | $0.04 | $(0.14) | Statement of Operations Summary - Six Months Ended June 30 ($ in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net Revenue | $55,009 | $54,052 | | Operating Income | $5,015 | $2,400 | | Net Income | $4,850 | $1,433 | | Net Income (Loss) Attributable to Common Shareholders | $674 | $(3,802) | | EPS (basic and diluted) | $0.02 | $(0.24) | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash from operations increased to $12.5 million, leading to a $5.3 million net increase in cash and a period-end balance of $10.4 million Cash Flow Summary - Six Months Ended June 30 ($ in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $12,521 | $8,345 | | Net cash used in investing activities | $(3,503) | $(3,471) | | Net cash used in financing activities | $(3,694) | $(5,512) | | Net increase (decrease) in cash | $5,295 | $(714) | | Cash - End of the period | $10,440 | $2,617 | Non-GAAP Financial Measures Reconciliation of Non-GAAP Measures CareCloud provides reconciliations for non-GAAP measures, showing Q2 2025 Adjusted EBITDA at $6.5 million, non-GAAP adjusted net income at $3.3 million, and year-to-date free cash flow at $9.0 million Adjusted EBITDA Reconciliation ($ in thousands) | Period | GAAP Net Income | Adjusted EBITDA | | :--- | :--- | :--- | | Q2 2025 | $2,902 | $6,529 | | Q2 2024 | $1,674 | $6,389 | | YTD 2025 | $4,850 | $12,124 | | YTD 2024 | $1,433 | $10,076 | Non-GAAP Adjusted Net Income Reconciliation ($ in thousands) | Period | GAAP Net Income | Non-GAAP Adjusted Net Income | | :--- | :--- | :--- | | Q2 2025 | $2,902 | $3,281 | | Q2 2024 | $1,674 | $2,958 | | YTD 2025 | $4,850 | $5,571 | | YTD 2024 | $1,433 | $3,178 | Free Cash Flow Reconciliation ($ in thousands) | Period | Net cash provided by operating activities | Free Cash Flow | | :--- | :--- | :--- | | YTD 2025 | $12,521 | $9,018 | | YTD 2024 | $8,345 | $4,874 | Explanation of Non-GAAP Measures Management utilizes non-GAAP measures like Adjusted EBITDA and Adjusted Net Income to clarify operational trends by excluding non-cash or non-recurring items such as stock-based compensation and transaction costs - Management uses non-GAAP financial measures to supplement GAAP results, believing they help investors understand short-term and long-term financial and operational trends by excluding certain non-cash or non-recurring items[36] - Adjusted EBITDA is used to evaluate operating performance and liquidity by excluding non-cash expenses (like depreciation, amortization, stock-based compensation) and expenses related to investing or financing transactions[37] - Specific items excluded from various non-GAAP measures include: foreign exchange loss, stock-based compensation, amortization of purchased intangible assets, transaction costs, integration costs, and restructuring costs[41][42][44] Other Information Capital Structure As of June 30, 2025, CareCloud had 42,322,039 common shares outstanding, alongside Series A and B Preferred Stock totaling 2,495,902 shares, accruing dividends at 8.75% annually - As of June 30, 2025, the Company had 42,322,039 shares of common stock outstanding[6] - There were 984,530 shares of Series A Preferred Stock and 1,511,372 shares of Series B Preferred Stock outstanding, both accruing dividends at a rate of 8.75% per annum[6] Conference Call and Other Disclosures This section details the investor conference call, explains the use of non-GAAP financial measures per SEC Regulation G, and includes forward-looking statement disclaimers - Management will host a conference call at 8:30 a.m. Eastern Time to discuss the results, with a live webcast available on the company's investor relations website[9] - The press release contains forward-looking statements regarding future financial performance, growth, and business outlook, which are subject to various risks and uncertainties[12][13] - The company uses non-GAAP financial measures, as defined by SEC Regulation G, and provides reconciliations to the most directly comparable GAAP measures within the press release[11]