CareCloud, Inc. Q3 FY2024 earnings call

Key Updates - Fully paid down $10 million credit line, demonstrating strong financial management. - On track to resume monthly dividend payments on Series A and Series B preferred shares starting March 2025. ### Q3 Financials - Generated $6.8 million in adjusted EBITDA, 111% increase y-o-y. - Achieved $10.3 million in year-to-date free cash flow, 328% improvement y-o-y. ### AI Focus - CareCloud CirrusAI streamlines administrative tasks and clinical documentation, with enhanced notes generating structured patient charts and providing diagnostic support. - AI tools like denial management and appeal generation enhance efficiency, with AI-generated appeals saving over 75% of manual appeal time. ### Operational Efficiencies - Reduced reliance on third-party contractors, leveraging in-house subject matter experts. - Utilized proprietary technology and AI to increase efficiency and control, reducing costs and improving free cash flow.

In Q3 2024, CareCloud generated revenue of $28.5 million. Adjusted EBITDA was $6.8 million, a 111% increase from the previous year. Year-to-date free cash flow was $10.3 million, a 328% improvement over 2023. Recurring technology enabled business solution revenues in Q3 2024 were $24.2 million, potentially flat with Q3 2023, while non-recurring professional services revenues for medSR declined from $5 million to $4.3 million. Adjusted EBITDA for Q3 2024 was 24% of revenue, the highest quarterly adjusted EBITDA in two years.

• Updated adjusted EBITDA guidance for full year 2024 to $23 million to $25 million, an increase from initial guidance. - Reaffirmed revenue guidance of $109 million to $111 million. - On track to resume monthly dividend payments on Series A and Series B preferred shares starting March 2025.

• Forward-looking statements subject to risks and uncertainties beyond control that could materially affect actual results. - MedSR faced challenges with APIC clients leading to a reduction in non-recurring professional services revenues, impacting overall revenue.

Q: Can you provide more color on life science partnerships?

A: We have a partnership with [Docuread] for medicine adherence, using clinical, medicine, and financial data to recommend medicines to providers and push relevant info to patients. We anticipate this revenue to contribute to future growth.

Q: Where are you on rolling out AI services and early indications?

A: CirrusAI notes were initially offered with a trial, some providers converted to paying clients. Features like chart summary are added as part of the flow, with modest revenue from charging for some standalone products.

Q: What's the outlook for medSR revenue?

A: MedSR faced challenges with APIC clients leading to revenue reduction. We expect to enter 2025 with similar book and backlog but it's challenging to predict quarterly revenue exactly.

Q: Still comfortable with $26 million expense cuts?

A: Still comfortable, expect to hit $26 million by end of 2024, with $20 million impact seen this year and remaining in 2025.

Q: Color on remote patient monitoring?

A: Launched in-house RPM solution recently, with $544,000 in RPM revenue in nine months of 2024. Focus on leveraging core technology strength for RPM and CCM to drive growth.