CARECLOUD(CCLDP) - 2025 Q2 - Quarterly Results

Executive Summary & Financial Highlights CareCloud achieved its first positive GAAP EPS since IPO, reporting strong Q2 and YTD 2025 financial growth, driven by AI and acquisitions Second Quarter 2025 Financial Highlights CareCloud achieved its first positive GAAP EPS since IPO in Q2 2025, with significant GAAP net income growth despite a slight revenue decrease | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | GAAP Net Income | $2.9 million | $1.7 million | +73% | | GAAP EPS | $0.04 | ($0.14) | Positive | | Adjusted Net Income | $3.3 million | $3.0 million | | | Adjusted EBITDA | $6.5 million | $6.4 million | | | Revenue | $27.4 million | $28.1 million | -2.5% | Year-to-Date 2025 Financial Highlights YTD 2025, CareCloud achieved substantial GAAP net income growth, positive GAAP EPS, and strong increases in Adjusted EBITDA and Free Cash Flow, with modest revenue growth | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | GAAP Net Income | $4.9 million | $1.4 million | +238% | | GAAP EPS | $0.02 | ($0.24) | Positive | | Adjusted Net Income | $5.6 million | $3.2 million | | | Adjusted EBITDA | $12.1 million | $10.1 million | +20% | | Free Cash Flow | $9.0 million | $4.9 million | +85% | | Revenue | $55.0 million | $54.1 million | +1.7% | Recent Strategic Updates CareCloud achieved its first positive GAAP EPS since its 2014 IPO, launched an AI Center of Excellence, and reignited its acquisition strategy with two completed deals - Financial Achievement: First quarter of positive GAAP EPS in CareCloud's history since going public in 2014[4] - AI Center of Excellence: Now live and scaling to 500 team members by year-end, with dedicated teams driving product innovation[4] - Acquisition Strategy Reignited: Completed two acquisitions so far this year, with additional acquisition opportunities actively under evaluation[4] Management Commentary Management highlighted CareCloud's strategic AI advancements, sustained financial strength, and successful turnaround, emphasizing positive GAAP EPS and growth through acquisitions - The launch of the AI Center of Excellence is a pivotal moment, aiming to build one of the largest dedicated healthcare AI teams globally to automate clinical workflows, optimize revenue cycle management, and improve patient outcomes[5] - CareCloud achieved positive GAAP EPS in Q2 2025, marking the first time in the Company's history since going public in 2014, demonstrating continued momentum and financial strength[5] - The company announced its fifth consecutive quarter of positive GAAP net income and an increase in year-to-date revenue, adjusted EBITDA, and free cash flow year-over-year, while consistently paying preferred stock dividends and reinvesting for future growth[5] Capital Structure Overview As of June 30, 2025, CareCloud reported outstanding Series A and B Preferred Stock and common stock, with preferred shares accruing 8.75% dividends and redeemable at the Company's option | Stock Type | Shares Outstanding (June 30, 2025) | | :--- | :--- | | Series A Preferred Stock | 984,530 | | Series B Preferred Stock | 1,511,372 | | Common Stock | 42,322,039 | - Series A and B Preferred Stock accrue dividends at 8.75% per annum ($2.1875 annually per share) and are redeemable at the Company's option once preferred stock dividends are current[6] 2025 Financial Guidance CareCloud reconfirmed its full-year 2025 guidance, projecting revenue between $111 million and $114 million, Adjusted EBITDA between $26 million and $28 million, and GAAP EPS between $0.10 and $0.13 | Metric | 2025 Guidance | | :--- | :--- | | Revenue | $111 – $114 million | | Adjusted EBITDA | $26 – $28 million | | GAAP Net Income Per Share (EPS) | $0.10 – $0.13 | - Revenue guidance is based on expectations from existing clients, organic growth from new client additions, and anticipated small tuck-in acquisitions[7] - Adjusted EBITDA guidance reflects improvements from the Company's cost reduction efforts[8] Conference Call Details CareCloud management hosted a conference call on August 5, 2025, at 8:30 a.m. ET to discuss first-half 2025 results, with webcast and audio replay options available - CareCloud management hosted a conference call on August 5, 2025, at 8:30 a.m. Eastern Time to discuss the first half of 2025 results[9] - The live webcast and related presentation slides were accessible at ir.carecloud.com/events, with an audio-only option available by dialing 201-389-0920[9] - A replay of the conference call and presentation slides became available approximately three hours after the call's conclusion at the same link, with an audio-only replay option[10] Corporate Information & Disclosures This section outlines CareCloud's use of non-GAAP financial measures, provides disclosures on forward-looking statements, and offers an overview of the company's role as a healthcare technology and AI solutions leader Use of Non-GAAP Financial Measures Disclosure CareCloud uses non-GAAP financial measures, as defined by SEC Regulation G, to supplement GAAP performance, providing additional insight into underlying business operations - CareCloud uses and discusses non-GAAP financial measures, as defined by SEC Regulation G, in its earnings releases and presentations[11] - These non-GAAP measures provide useful supplemental information regarding underlying business operations but should be considered in addition to, and not as a substitute for, GAAP financial performance measures[11] - Reconciliations between non-GAAP and comparable GAAP financial measures are included in the press release after the condensed consolidated financial statements[11] Forward-Looking Statements Disclosure This press release contains forward-looking statements subject to substantial risks and uncertainties that could materially affect actual results, with no obligation for the company to update them - The press release contains forward-looking statements relating to anticipated future events, results of operations, or financial performance, identifiable by terms such as 'expects,' 'plans,' 'anticipates,' or 'believes'[12] - These statements are neither historical facts nor assurances of future performance, involving substantial known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[14] - The Company does not assume any obligation to update the forward-looking statements to reflect events or circumstances that occur or exist after the date on which they were made[15] About CareCloud CareCloud is a healthcare technology leader providing generative AI solutions to over 40,000 providers, enhancing financial and operational performance and improving patient experience - CareCloud is a leader in healthcare technology and generative AI solutions, helping clients increase financial and operational performance, streamline clinical workflows, and improve the patient experience[16] - The company serves more than 40,000 providers with products and services including revenue cycle management (RCM), practice management (PM), electronic health records (EHR), artificial intelligence (AI), business intelligence (BI), patient experience management (PXM), and digital health[16] Condensed Consolidated Financial Statements CareCloud's financial statements for Q2 and YTD 2025 reflect improved profitability, increased cash, and a stronger balance sheet, reversing prior year losses and demonstrating operational efficiency Condensed Consolidated Balance Sheets CareCloud's June 30, 2025 balance sheet shows increased total assets and shareholders' equity, driven by higher cash, with decreased total liabilities compared to December 31, 2024 | Metric | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :--- | :--- | :--- | | Total Assets | $75,244 | $71,614 | | Total Liabilities | $19,168 | $21,840 | | Total Shareholders' Equity | $56,076 | $49,774 | | Cash | $10,440 | $5,145 | Condensed Consolidated Statements of Operations For Q2 and YTD 2025, CareCloud showed strong profitability improvements, achieving positive GAAP net income and EPS, reversing prior year losses, with modest revenue changes | Metric ($ in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $27,377 | $28,090 | $55,009 | $54,052 | | Operating Income | $2,996 | $2,271 | $5,015 | $2,400 | | Net Income | $2,902 | $1,674 | $4,850 | $1,433 | | Net Income (Loss) Attributable to Common Shareholders | $1,537 | ($2,249) | $674 | ($3,802) | | Net Income (Loss) Per Common Share | $0.04 | ($0.14) | $0.02 | ($0.24) | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, CareCloud significantly increased net cash from operating activities, resulting in a higher cash balance after investing and financing activities | Metric ($ in thousands) | YTD 2025 | YTD 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) | | Cash - End of the period | $10,440 | $2,617 | Non-GAAP Financial Measures Reconciliation & Explanation This section provides reconciliations for Adjusted EBITDA, Adjusted Operating Income, Adjusted Net Income, and Free Cash Flow, explaining their importance for evaluating CareCloud's operational performance Adjusted EBITDA Reconciliation CareCloud's Adjusted EBITDA increased for both Q2 and YTD 2025, reflecting improved operational performance after adjusting for non-cash and non-recurring items | Metric ($ in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP Net Income | $2,902 | $1,674 | $4,850 | $1,433 | | Adjusted EBITDA | $6,529 | $6,389 | $12,124 | $10,076 | Non-GAAP Adjusted Operating Income Reconciliation CareCloud reported increased Non-GAAP Adjusted Operating Income and Margin for Q2 and YTD 2025, indicating stronger core operational efficiency by excluding certain non-cash and non-recurring expenses | Metric ($ in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP Operating Income | $2,996 | $2,271 | $5,015 | $2,400 | | GAAP Operating Margin | 10.9% | 8.1% | 9.1% | 4.4% | | Non-GAAP Adjusted Operating Income | $3,334 | $3,249 | $5,676 | $3,844 | | Non-GAAP Adjusted Operating Margin | 12.2% | 11.6% | 10.3% | 7.1% | Non-GAAP Adjusted Net Income Reconciliation CareCloud's Non-GAAP Adjusted Net Income and Adjusted EPS grew for Q2 and YTD 2025, reflecting improved profitability after specific non-GAAP adjustments | Metric ($ in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP Net Income | $2,902 | $1,674 | $4,850 | $1,433 | | Non-GAAP Adjusted Net Income | $3,281 | $2,958 | $5,571 | $3,178 | | Non-GAAP Adjusted Earnings Per Share | $0.07 | $0.18 | $0.13 | $0.20 | Free Cash Flow Reconciliation CareCloud significantly increased Free Cash Flow for both Q2 and YTD 2025, demonstrating enhanced ability to generate cash from operations after capital expenditures | Metric ($ in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $7,408 | $4,279 | $12,521 | $8,345 | | Free Cash Flow | $5,415 | $2,676 | $9,018 | $4,874 | Explanation of Non-GAAP Financial Measures CareCloud uses non-GAAP measures like Adjusted EBITDA, Operating Income, Net Income, and Free Cash Flow to clarify operational trends, aiding management in performance evaluation, decision-making, and strategic planning - Management uses non-GAAP financial measures to understand short-term and long-term financial and operational trends, evaluate operating performance, make operating decisions, and serve as a basis for strategic planning[36] - Adjusted EBITDA is defined as GAAP net income (loss) before provision for income taxes, net interest expense, other (income) expense, stock-based compensation expense, depreciation and amortization, integration costs, transaction costs, impairment charges, and changes in contingent consideration[37] - Free cash flow measures the ability to generate additional cash from business operations and is considered an important financial measure for evaluating performance, though it does not represent residual cash available for discretionary expenditures[48]