Financial Performance - For the three months ended September 30, 2025, net revenue was $31,067,000, an increase of 8.3% from $28,546,000 in the same period of 2024[175]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $19,857,000, compared to $16,916,000 for the same period in 2024, reflecting a growth of 11.5%[175]. - GAAP net income for the three months ended September 30, 2025, was $3,060,000, slightly down from $3,122,000 in 2024, indicating a decrease of 2.0%[175]. - Adjusted net income for Q3 2025 was $4.41 million, up from $3.47 million in Q3 2024, representing a 27% increase[177]. - Net revenue for Q3 2025 was $31.07 million, a 9% increase from $28.55 million in Q3 2024, while net revenue for the nine months ended September 30, 2025, was $86.08 million, up 4% from $82.60 million in the same period of 2024[194]. - GAAP operating margin for the nine months ended September 30, 2025, was 9.6%, compared to 6.9% in the same period of 2024[175]. - Adjusted operating margin for the three months ended September 30, 2025, was 14.5%, up from 12.9% in the same period of 2024[175]. Operating Expenses - Total operating expenses increased to $27.9 million for the three months ended September 30, 2025, up by $2.6 million or 10% compared to the same period in 2024[196]. - Direct operating costs as a percentage of net revenue decreased to 52.2% in Q3 2025 from 54.0% in Q3 2024[193]. - Total operating expenses as a percentage of net revenue were 89.6% in Q3 2025, down from 88.5% in Q3 2024[193]. - Direct operating costs increased to $16.2 million for the three months ended September 30, 2025, up by $804,000 or 5% compared to the same period in 2024[196]. - Selling and marketing expenses decreased to $1.1 million for the three months ended September 30, 2025, down by $252,000 or 18% from the prior year[197]. - Research and development expenses rose to $1.6 million for the three months ended September 30, 2025, an increase of $784,000 or 98% compared to the same period in 2024[199]. Cash and Liquidity - The company held cash of approximately $1.2 million in Pakistan and Sri Lanka as of September 30, 2025, compared to $119,000 as of December 31, 2024[164]. - As of September 30, 2025, the company had total cash of $5.1 million and net working capital of $6.1 million[210]. - The company entered into a two-year, $10 million revolving line of credit with Provident Bank in September 2025, with $6.5 million borrowed as of September 30, 2025[209]. - Net cash provided by operating activities was $19.9 million for the nine months ended September 30, 2025, an increase of $4.5 million or 29% compared to the same period in 2024[215]. - Net cash provided by financing activities was $1.2 million in 2025, a decrease from $10.7 million in 2024[218]. - Cash used in financing activities included $4.8 million of preferred stock dividends in 2025[218]. - The company expects sufficient liquidity to meet its obligations for the next twelve months based on management's forecasts[212]. Investments and Acquisitions - Net cash used in investing activities was $21.2 million for the nine months ended September 30, 2025, compared to $5.1 million in 2024, indicating a significant increase in investment[217]. - Capital expenditures increased to $2.7 million in 2025 from $759,000 in 2024, primarily for computer equipment and leasehold improvements[217]. - Software development costs capitalized were $2.5 million in 2025, down from $4.4 million in 2024, reflecting a decrease in investment in technology solutions[217]. - Payments for acquisitions totaled $16 million during the nine months ended September 30, 2025[217]. Operational Highlights - The company’s AI-powered solutions, such as cirrusAI Notes, save providers 20% more time per day by alleviating documentation burdens[169]. - The company employs approximately 350 health industry experts in the U.S. and a specialized offshore workforce of about 3,500, achieving significant cost reductions[170]. - The company’s technology-enabled business solutions include a comprehensive suite of services such as revenue cycle management, electronic health records, and telehealth solutions[165]. - Technology-enabled business solutions accounted for approximately 69% of revenue in Q3 2025, compared to 63% in Q3 2024[181]. - Medical practice management services contributed approximately 14% of revenue in Q3 2025, compared to 15% in Q3 2024[182]. - The company served approximately 45,000 providers as of September 30, 2025, consistent with the number from September 30, 2024[180]. Compliance and Risk - The company maintained compliance with all covenants under its line of credit as of September 30, 2025[219]. - As of September 30, 2025, the company had no off-balance sheet arrangements or relationships with unconsolidated entities[220]. - The company is classified as a smaller reporting company and is not required to provide additional market risk disclosures[221].
CARECLOUD(CCLDP) - 2025 Q3 - Quarterly Report