CareCloud, Inc. Q3 FY2025 earnings call

• Q3 was transformational with strong results, AI milestones, and two strategic acquisitions. - Acquired Medsphere on August 22, expanding into the inpatient market with solutions like Care View, RCM Cloud, Wellsoft, etc., and now serving the full care continuum. - Acquired Map App on October 1, bringing a benchmarking and performance analytics platform for hospital finance. - Agentic AI front desk solution in advanced pilot testing, handling over 70% of incoming patient calls end-to-end with 80% success in appointment scheduling. - Integrating Medsphere's platform and enhancing Map App with AI-driven analytics.

In Q3 2025, CareCloud delivered revenue of $31.1 million, a 9% increase from the same period last year. GAAP EPS improved to $0.04, up $0.08 year-over-year, and adjusted EBITDA increased 13% to $7.7 million. For the 9 months ended September 30, 2025, revenue was $86.1 million, GAAP net income was $7.9 million, and adjusted EBITDA was $19.9 million. CareCloud Wellness generated approximately $900,000 in Q3 revenue and ~$2.6 million for the first 9 months. Revenue related to the Medsphere acquisition was ~$3.4 million in Q3.

• Raised full-year 2025 revenue guidance to $117 million to $119 million, up from $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.

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 Medsphere acquisition which brings credibility in hospital spaces and Map App which provides analytics. Near-term focus on cross-selling and upselling into installed base, with second priority on extending benefits to broader hospital community, especially critical access hospitals.

Q: First, I guess, just in terms of M&A, I know you recently closed Medsphere and Map App. But just wondering, maybe taking a step back, what you're seeing from a competitive standpoint, particularly as it relates to buyer and seller expectations around valuations. And then related to that, I know you plan to pay down the credit facility balance in the coming months, but just curious how you're thinking about capacity from a funding standpoint going forward.

A: AI is driving M&A conversations. Sellers of companies not rapidly deploying AI see limited exit windows. Valuations reflect this. We look for non-dilutive, balance sheet flexible, attractive valuation acquisitions. For Medsphere, paid ~half in cash at closing and balance via credit facility, and have reduced the balance significantly. Map App was an all-cash acquisition. We're open to accretive, non-dilutive acquisitions with good product fit and synergies.

Q: I was just wondering, do you think for the acquisitions, if you're able to do the cross-selling, upselling synergies that they have the potential to get to the type of margins that your company has overall?

A: Our playbook is to get acquisitions to an operating cash flow margin of about 30% or greater. We believe we're making good progress with the 4 acquisitions this year. Yes, cross-selling and upselling RCM and AI solutions can achieve attractive margins.