Financial Data and Key Metrics Changes - CareCloud achieved GAAP net income of $2,900,000, a 73% improvement from $1,700,000 in the same period last year [6] - The company reported its first positive GAAP earnings per share at $0.04 compared to a loss of $0.14 per share in 2024 [6] - Year-to-date GAAP net income reached $4,900,000, more than tripling the amount reported in 2024 [7] - Adjusted EBITDA stood at $12,100,000, a 20% increase year over year [7] - Free cash flow reached $9,000,000, up 85% over the same period [7] - Revenue for the second quarter was $27,400,000, down approximately $700,000 year over year due to a one-time non-recurring revenue item in Q2 2024 [26] - Non-GAAP adjusted net income for the second quarter was $3,300,000 or $0.07 per share [27] Business Line Data and Key Metrics Changes - CareCloud Wellness generated approximately $1,000,000 in revenue for the quarter and approximately $1,800,000 for the first six months of the year [26] - The company reported positive GAAP operating income of $3,000,000 compared to $2,300,000 in Q2 2024 [26] Market Data and Key Metrics Changes - CareCloud has received ONC Health IT certification for its Talk EHR platform tailored specifically for critical access hospitals, opening access to a market of over 1,500,000,000 across more than 1,300 rural hospitals [22][23] Company Strategy and Development Direction - The company is focused on AI-driven innovation, operational discipline, and sustainable growth, marking a continuation of the transformation initiated in 2024 [5] - CareCloud is actively using AI to enhance provider and patient experiences while improving internal operations and cost structures [8][9] - The company has returned to a more active posture in M&A, completing two acquisitions this year aligned with its focus on specialty AI-powered revenue cycle management [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver profitability at scale and to lead the next wave of intelligent healthcare delivery [12] - The management team emphasized the importance of maintaining financial discipline and shareholder alignment, having declared nine consecutive months of preferred dividend payments funded entirely from free cash flow [10] - The company anticipates continued positive EPS and modest revenue increases in the second half of the year [75] Other Important Information - The AI Center of Excellence is fully operational, with 100 full-time AI professionals and 100 interns onboarded [13][14] - The company is embedding intelligence into its platform to improve operational efficiency and scalability [24] Q&A Session Summary Question: How does the company view the spend on the AI Center of Excellence relative to potential revenue opportunities? - Management indicated a threefold focus: generating incremental revenue, enhancing product competitiveness, and optimizing back-office operations [35] Question: How is the company approaching sales for new offerings targeting specialized practices? - The company sees opportunities in providing end-to-end solutions for specialty practices, particularly in areas where existing EHRs lack next-generation capabilities [39][41] Question: How did MedAssar Remote Patient Monitoring and Chronic Care Management perform? - Management reported stable revenue for MedAssar, with RPM expected to contribute about 5% or less to overall revenue [45][46] Question: What is the company's outlook on M&A and funding capacity? - The company is seeing an active M&A environment and believes it is well-positioned to pursue strategic acquisitions funded through internally generated cash flow and an untapped credit facility [54][56]

Financial Performance - Revenue for Q1 2025 was $27.6 million, an increase from $26 million in Q1 2024, reflecting ongoing demand for integrated AI-enabled RCM solutions [8][29] - GAAP net income was $1.9 million, a significant turnaround from a net loss of $241,000 in Q1 2024 [8][30] - Adjusted EBITDA rose to $5.6 million, up 52% year over year, representing 20% of revenue [9][31] - Free cash flow for Q1 2025 was $3.6 million, with a significant reduction in dividend obligations from $3.9 million to approximately $1.5 million per quarter following the conversion of Series A preferred stock [11][29] Business Lines and Market Data - Recurring technology-enabled business solution revenue was $17.7 million, up approximately $400,000 year over year, while non-recurring professional services revenue from MSR increased by approximately $1.5 million [29] - Remote Patient Monitoring (RPM) and Chronic Care Management (CCM) revenue grew by approximately 25-30% year over year, although it still represents a small portion of overall revenue [67] Company Strategy and Industry Competition - The company has re-entered the M&A market, completing two strategic acquisitions in early 2025, which are expected to be accretive within 90 days [13][14] - The launch of the AI Center of Excellence aims to position the company at the forefront of intelligent healthcare automation, with plans to scale the team to 500 AI professionals by the end of the year [12][17] - The company is focused on transforming the care journey through intelligent automation across clinical workflows and revenue cycle operations [17][22] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive sustainable value for shareholders and clients, reaffirming guidance for 2025 with expected revenue of approximately $111 million to $114 million [32][34] - The company does not anticipate significant pressure on demand for its services due to external economic factors such as tariffs or inflation [32] Other Important Information - The company has improved its financial position significantly over the past year, returning to profitability and generating strong free cash flow [34] - The AI initiatives are fully self-funded through operating cash flow, reflecting the strength of the underlying business model [17][18] Q&A Session Summary Question: Key factors for revenue growth and expectations for the quarter - Management noted that the revenue growth was driven by a large project in MedSR and emphasized a focus on existing client sales and new opportunities facilitated by specialty-specific EHRs [36][38] Question: Timeline for AI product development - Management indicated that they will provide quarterly updates on AI projects and progress, with ongoing improvements in backend processes and various AI initiatives already in development [42][44] Question: Seasonality of the business - Management acknowledged that Q1 is typically lower due to deductibles but expressed optimism about achieving overall revenue targets for the year [45][46] Question: Capital allocation priorities - The company plans to prioritize reinvestment in the business, particularly in AI, while also pursuing tuck-in acquisitions that align with existing capabilities [50][52] Question: Expense efficiencies and targeted areas - Management highlighted that AI will play a key role in driving efficiencies, particularly in automating revenue cycle functions and improving internal workflows [55][60] Question: Remote patient monitoring and chronic care management opportunities - Management expressed excitement about RPM and CCM growth, noting it as a natural fit for upselling and expanding revenue opportunities, although it remains a small portion of overall revenue [66][68] Question: Sustainability of cost of goods sold and tax rate - Management indicated that the decline in cost of goods sold as a percentage of revenue is sustainable and that the low tax rate is expected to remain consistent due to sufficient NOLs [70][76]

Financial Performance - Revenue for Q1 2025 was $27.6 million, an increase from $26 million in Q1 2024, reflecting ongoing demand for integrated AI-enabled RCM solutions [6][29] - GAAP net income for Q1 2025 was $1.9 million, a significant turnaround from a net loss of $241,000 in Q1 2024 [6][30] - Adjusted EBITDA rose to $5.6 million, up 52% year over year, representing 20% of revenue [7][30] - Free cash flow for Q1 2025 was $3.6 million, with a reduction in quarterly dividend obligations from approximately $3.9 million to $1.5 million following the conversion of Series A preferred stock [10][30] Business Lines and Market Data - Recurring technology-enabled business solution revenue was $17.7 million in Q1 2025, up approximately $400,000 from the previous year [29] - Non-recurring professional services revenue from MSR increased by approximately $1.5 million [29] - Remote Patient Monitoring (RPM) and Chronic Care Management (CCM) revenue grew by approximately 30% year over year, although it still represents a small portion of overall revenue [66] Company Strategy and Industry Competition - The company has launched an AI Center of Excellence, targeting a team of 500 AI professionals by the end of 2025, focusing on automating various healthcare processes [11][16] - Two strategic acquisitions were completed in early 2025, marking a return to M&A after nearly four years, aimed at disciplined accretive growth [12][14] - The company aims to leverage AI for operational efficiency and long-term product innovation, positioning itself as a leader in intelligent healthcare automation [20][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive sustainable value for shareholders and clients, reaffirming guidance for 2025 revenue of approximately $111 million to $114 million [32][34] - The company does not anticipate significant pressure on demand for its services due to external economic factors such as tariffs or inflation [31][32] Other Important Information - The company has improved its financial position significantly over the past year, returning to profitability and reducing dividend commitments [34] - A Form S-3 shelf registration statement has been filed and is now effective, providing flexibility for future capital needs [33] Q&A Session Summary Question: Key factors for revenue growth and quarter performance - Management noted that the revenue growth was driven by a large project in MedSR and emphasized a focus on existing client sales and new opportunities facilitated by specialty-specific EHRs [36][38] Question: Timeline for AI product development - Management indicated that over 50 employees have been hired for the AI initiative, with regular updates on project progress and performance metrics to be communicated quarterly [41][42] Question: Seasonality of the business - Management acknowledged that Q1 is typically lower due to deductibles but expressed optimism about achieving overall revenue targets for the year [44][45] Question: Capital allocation priorities - The company plans to prioritize reinvestment in AI while also pursuing tuck-in acquisitions that align with existing capabilities [49][51] Question: Sustainability of cost efficiencies - Management believes that the reduction in cost of goods sold as a percentage of revenue is sustainable and will continue to seek further efficiencies [68][70] Question: Tax rate expectations - The company expects its low tax rate to remain consistent due to sufficient net operating losses [73]