CareCloud, Inc. Q4 FY2025 earnings call

• 2025 was transformational with exceptional financial performance, strategic acquisitions, and successful AI platform launch. - Revenue growth, accelerating profitability and free cash flow. - Completed conversion of Series A preferred shares and repaid credit line. - Made strategic M&A to expand capabilities and market reach, including Medsphere and MapApp acquisitions. - Launched Stratus AI front desk agent and other AI products, with focus on AI Center of Excellence and AI integration across platforms. - 2026 growth strategy centers on penetrating new health system customers with RCM and AI products, and continuing AI product suite expansion, cross-selling, and building AI center of excellence.

For the full year 2025, revenue was $120.5 million, up nearly 9% year-over-year. Q4 2025 revenue was $34.4 million, up nearly 22% year-over-year. GAAP net income for 2025 was $10.8 million, up over 37% year-over-year. Q4 2025 GAAP EPS was 4 cents. Adjusted EBITDA expanded to $27.5 million with a 23% margin in 2025, up over 14% year-over-year. Q4 2025 adjusted EBITDA was $7.7 million, 22% of revenue. Full-year 2025 GAAP operating cash flow was $28.6 million, up 38% year-over-year. Q4 2025 GAAP operating cash flow was $8.7 million, up 66% year-over-year. Non-GAAP free cash flow reached approximately $20.5 million for 2025, up over 500% from 2023. During 2025, completed conversion of ~80% of Series A preferred shares into common, full repaid Provident Bank credit line. Made significant M&A in 2025, including acquisition of Medsphere Systems and MapApp.

Expects revenue of $128 million to $130 million and adjusted EBITDA of $29 to $31 million for 2026, reflecting margin expansion. Also expects GAAP EPS of $0.20 to $0.23 per share, representing over 100% increase over 2025. Guidance set at achievable levels consistent with track record.

Q: Expand on monetizing AI in 2026, M&A and AI overlay.

A: From M&A perspective, favorable environment with recurring revenue and target valuations. AI overlay involves integrating core AI products into acquired platforms, using AI and automation in backend operations.

Q: Talk about contract wins and future opportunities.

A: Expanded sales and marketing team, focus on cross-selling and upselling existing customers, including new wins with Wellsoft and supply chain product.

Q: Thoughts on CareCloud's exposure to AI disruption and being a beneficiary.

A: Healthcare IT has deep industry moats, AI products require rigorous testing and comply with regulations, data is proprietary, different from horizontal SaaS.

Q: Assumptions behind 2026 guidance and growth trajectory beyond.

A: Driven by top-line growth, integration savings, AI efficiencies, eliminated preferred dividend obligations. Expect to continue expanding margin profile.

Q: AI's impact on operations and margins, competition, use of excess cash flow.

A: AI and automation reduce employees while increasing revenue, competition includes eClinical Works, Advanced MD, Athena Health, etc. Excess cash flow used for acquisitions, enhancing capital structure, and investing in AI.

Q: Competition in business, CapEx and software spending, run rate on operating expenses and AI benefits.

A: Competition varies by area, CapEx and software spending expected to be same or less, AI helps reduce operating expenses with leaner team.