CareCloud, Inc. Q1 FY2026 earnings call

Heidi discussed three AI tracks: backend AI application in RCM and software development lifecycle; bringing AI into existing client products; new standalone AI products. Norm talked about financials, free cash flow, revenue, net income, adjusted EBITDA, cash position, and no impact from tariffs, Middle East and Ukraine conflicts. Mahmoud mentioned profitable growth, Series B redemption, and AI strategy leading industry transformation. Regarding MedSphere products, there are four work streams: technical debt remediation, net new capability development, cross - portfolio integration, and AI infusion.

Revenue for Q1 2026 was $31.3 million, with recurring technology - enabled business solution revenue at $23 million (up ~$5.3 million from Q1 2025) and non - recurring project - based professional services revenue from MedSR down ~$2.9 million. Free cash flow for Q1 2026 was $2.4 million. Adjusted EBITDA was $5.4 million (17% of revenue).

Reaffirmed full - year guidance. Anticipated margins to improve throughout the year. Free cash flow expected to exceed $2 million on average per month. ATM to be used for funding attractive M&A, opportunistic stock price trading, and supporting clear growth objectives when appropriate.

Q: In - house patient software segment traction and strategy; A: Discussed technical debt remediation, net new capability development, cross - portfolio integration, and AI infusion for MedSphere products.

Q: Series B redemption timing and reasons; A: Reasons include operating performance and cash flow inflection, attractive senior debt facility, and eliminating preferred dividend burden.

Q: AI vs competitors; A: Differentiated by full embedded integrated solution vs bolt - on.

Q: Reaffirmed guidance and seasonality; A: Quarter one is seasonally weak, margins expected to improve as integration costs reduce and back half of year progresses.

Q: Salesforce approach; A: Salesforce grown, focused on cross - selling within existing base, and acquisitive growth with lower acquisition cost compared to industry average.