CareCloud, Inc. Q3 FY2025 earnings call

• The acquisition of Medsphere expands CareCloud from an ambulatory-centric company to serving the full care continuum, including inpatient, emergency, supply chain, and more. - The Agentic AI front desk solution is in advanced pilot testing, handling over 70% of incoming patient calls end-to-end with high success rates in tasks like appointment scheduling. - Progress is being made on integrating Medsphere's platform portfolio, including merging Care View with CareCloud's platform for community and critical access hospitals, and enhancing ChartLogic customers' access to CareCloud's capabilities.

CareCloud delivered revenue of $31.1 million in Q3 2025, an increase of 9% from the same period last year. GAAP EPS improved by $0.08 year-over-year to $0.04, and adjusted EBITDA increased 13% to $7.7 million. The company completed two strategic acquisitions: Medsphere, which expands CareCloud into the inpatient market with solutions like Care View, RCM Cloud, etc., and Map App, a hospital benchmarking and performance analytics platform. Medsphere was acquired for $16.5 million, with roughly half funded by cash on hand and the rest under a credit facility, and the balance has been rapidly reduced. Map App enhances analytics and benchmarking capabilities.

• Raised full-year 2025 revenue guidance to $117 million to $119 million, up from the prior $111 million to $114 million. - Reaffirmed adjusted EBITDA guidance of $26 million to $28 million. - Reaffirmed GAAP EPS guidance of $0.10 to $0.13, reflecting momentum and disciplined execution.

Q: Starting out with your push into the hospital space. Can you talk about your plan to try to win new customers and grow sales? What's your go-to-market strategy on that?

A: Focus on the acquisition of Medsphere and Map App. Near-term focus is cross-selling and upselling into the installed base of Medsphere's clients. Second order of priority is extending benefits to the broader hospital community, initially targeting critical access hospitals.

Q: Just in terms of M&A, what you're seeing from a competitive standpoint, particularly as it relates to buyer and seller expectations around valuations. And related to that, how you're thinking about capacity from a funding standpoint going forward?

A: AI is driving M&A conversations. Companies not actively deploying AI have limited exit windows, affecting valuations. We look for accretive, non-dilutive, balance sheet-flexible acquisitions with attractive valuations and good product fit and synergies.

Q: Just curious how the structures of those transactions may have differed from prior deals in the past and how you think about kind of structuring going forward?

A: All acquisitions follow a disciplined playbook: asset purchases, non-dilutive, maintain balance sheet flexibility, valuations 1x or less. For Medsphere, paid half in cash at closing and the balance via a credit facility with practical covenants, and have rapidly reduced the balance using internally generated cash.