CareCloud Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 13, 2024

There are 8 speakers on the call.

Operator

Ladies and gentlemen, welcome to the CareCloud Second Quarter 2024 Results Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I will now turn the call over to Kristin.

Operator

Thank you. You may begin.

Speaker 1

Good morning, everyone. Welcome to CareCloud's Q2 2024 Conference Call. On today's call are Mahmoud Haq, our Founder and Executive Chairman Adi Chaudhry, our Chief Executive Officer and Director Stephen Schneider, our President and Norman Roth, our Interim Chief Financial Officer and Controller. Before we begin, I would like to remind you that certain statements made during this conference call are forward looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended in Section 21E of the Securities Exchange Act of 1934 as amended. All statements other than statements of historical fact made during this conference are forward looking statements, including without limitation, statements regarding our expectations and guidance for future financial and operational performance, expected growth, business outlook and potential organic growth and acquisition.

Speaker 1

Forward looking statements may sometimes be identified with words such as will, may, expect, plan, anticipate, upcoming, believe, estimate or similar terminology in the negative of these terms. Forward looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties, many of which are beyond our control, which would cause actual results to differ materially from those contemplated in these forward looking statements. These statements reflect our opinions only as to the date of this presentation, and we undertake no obligation to revise these forward looking statements in light of new information or future events. Please refer to our press release and our reports filed with the Securities and Exchange Commission, where you will find a more comprehensive discussion of our performance and factors that could cause actual results to differ materially from these forward looking statements. For anyone who dialed into the call by telephone, you may wish to download our Q2 2024 earnings presentation.

Speaker 1

Please visit our Investor Relations site, ir.carecloud.com. Click on News and Events, then click IR Calendar, click on Q2 2024 results conference call and download the earnings presentation. Finally, on today's call, we may refer to certain non GAAP financial measures. Please refer to today's press release announcing our Q2 2024 results for a reconciliation of these non GAAP performance measures to our GAAP financial results. With that said, I'll now turn the call over to our CEO, Hadi Chaudhry.

Speaker 1

Hadi?

Speaker 2

Thank you, Christian, and thanks to all of you for joining our Q2 2024 earnings call. I'm very pleased to announce that we are turning the corner in our pivot towards improved profitability as our net income, free cash flow and related metrics are all moving strongly in the right direction, even with lower non recurring professional services revenues, enabling us to pay down $7,500,000 on our credit facility to date this year. You will hear more about this from Steve and Norm, but our team is doing a great job generating cash each month instead of using cash as we were last year. Repaying our debt is a priority for us and is a key step to being able to restart the dividends on our preferred stock. While our focus has been on reducing expenses and improving profitability for the first half of the year and this will remain a focus in the second half, we are starting to turn some attention to growth, which I know investors have been waiting to hear about.

Speaker 2

On our last earnings call, I talked about addition of new generative AI product called CareCloud Cirrus AI Nodes. Today, I'm pleased to provide an update on the progress of CareCloudSirus AI nodes, which has now been deployed at a small subset of our existing clients. Our pilot users have reported significant improvements in efficiency and accuracy of clinical documentation. The ambient AI technology embedded within CareCloud Serus AI nodes has proven effective at capturing and transcribing crucial dialogue during patients' interactions, producing precise clinical notes in real time. As part of our rollout strategy, we offered a 30 day risk free trial to these initial users, allowing them to fully explore the capabilities of CareCloud's Cirrus AI nodes.

Speaker 2

The feedback has been overwhelmingly positive with users highlighting the seamless integration with their existing workflows and the time saving benefits of real time transcription. After the completion of the trial period, Care Cloud Cirrus AI notes will be available at a competitive license fee of $199 per provider per month. This pricing structure reflects the value that CareCloud Cerus AI Notes brings to enhancing provider efficiency and patient care. We are confident that this offering will continue to gain momentum as more practices recognize the tangible benefits of integrating AI into their daily operations. We have started to recognize revenues from this product in Q3 2024.

Speaker 2

Even though it's a very small number at the moment, we anticipate significant growth as adoption increases and more practices begin to see the value it brings their operation. 1 of our early adopters with 7 medical providers commented, I'm used to using dictation devices, but we are a very busy clinic. So I was trying to look for any way to make our workload easier. I found that CareCloud AI tools are very efficient when it comes to dictation. Instead of me trying to figure out where information should go in the chart, as I'm talking to the patient, this software automatically puts everything where it needs to be and it's been amazing.

Speaker 2

It will add suggested codes based on the encounter. I'm still learning the nuances of this program, but so far I'm enjoying it. We are saving a lot of time on the back end. In conclusion, we remain committed to advancing healthcare technology through innovative AI solutions like CareCloud Cirrus AI Nodes. As we expand CareCloud Cirrus AI Nodes to a broader audience, we anticipate continued growth and adoption driving value for both our clients and shareholders.

Speaker 2

Now let's turn our attention to our revenue growth. In this quarter, we have continued to capitalize on our diversified client base, which spans multiple market segments, including hospitals and medical practices of all sizes. This diversity not only stabilizes our revenue streams, but also unlocks significant upsell and cross sell opportunities. With our proprietary comprehensive suite of integrated products and services, we are uniquely positioned to offer tailored solution that meet the evolving needs of our clients. This strategic approach allows us to deepen relationships, enhance client retention and expand our footprint within each segment, driving both top line growth and long term value for our stakeholders.

Speaker 2

Year to date bookings from cross sell and up sell initiatives have doubled compared to the same period last year. We expect recognized revenue from these bookings to be approximately 50% higher in 2024 than last year. In Q2, our CareCloud Wellness program, including chronic care management and remote patient monitoring, saw a remarkable 154% year over year revenue increase, exceeding $1,000,000 in recognized revenue for the first time in a quarter. Most of this revenue is derived from upselling within our existing client base. We see tremendous opportunity in this solution and are committed to further expanding this revenue stream.

Speaker 2

It has taken a long time for patients to recognize the value that our healthcare providers recognize immediately. And we think use of this program will improve patient health and simultaneously control healthcare costs by identifying issues earlier before they get more serious. This year marks a pivotal transition for us during which we have already reached significant milestones in fortifying our financial position and establishing a strong foundation for the future. Our primary focus remains on growing our positive free cash flow, which is crucial not only covering operating expenses, but also for paying down our credit line and eventually resuming preferred dividends. We have made considerable progress towards these and are fully committed to maintaining this positive trajectory.

Speaker 2

As we look ahead to 2025, our focus will shift back towards driving growth. Our goal is to deliver consistent year over year revenue increases while enhancing profitability. We are confident that this growth will be fueled by multiple channels, including new sales, cross sell and up sell opportunities, the continued innovation of our fully integrated AI solutions and the expansion of our CareCloud Wellness program. Additionally, we plan to leverage our strategic partnerships, enabling our industry players to utilize our white tabled technology solutions and our highly skilled global workforce. Finally, we aim to capitalize on our extensive high quality healthcare data set to support life sciences companies, healthcare providers and payers.

Speaker 2

He will share more details on our growth strategy during our next earnings call. I will now turn the floor over to Steve. Steve?

Speaker 3

Good morning, and thank you everyone for joining us on today's call. As a team, we are making great progress at accomplishing our objective of transforming our cost structure. With this transformation, we are achieving our goal of increasing our free cash flow, which will enable us this year to eliminate the entire balance on our credit line, which was $10,000,000 at the start of the year and move us closer to resuming dividends. Our revised cost structure will position us to further expand margins as we lean heavily into revenue growth during 2025 and beyond. Over the last three quarters, we have identified more than $26,000,000 in annualized cost savings.

Speaker 3

Of this $26,000,000 in savings, we expect to realize a reduction to our 2024 in year expenses of approximately $20,000,000 We are achieving these savings through a 3 pronged strategy. First, we are strategically deploying our proprietary technology, enabling us to reduce costs while accomplishing day to day tasks in a more systematic, effective and repeatable manner. 2nd, we have continued to reduce our reliance on 3rd party contractors, leveraging our in house expertise at a small fraction of the cost of the prior third party contractor costs, while also increasing our control and reducing the natural risks that come with relying on 3rd parties to handle critical business functions. And third, we have leaned further into our core strength of our global business model, strategically leveraging our most effective and cost efficient resource for each discrete process, thereby enabling us to both increase our overall bandwidth while simultaneously reducing the associated costs. In summary, this cost transformation has been made possible through our use of Care Cloud's proprietary technology, eliminating expensive third party relationships and embracing the strength of our global model.

Speaker 3

During the first half of twenty twenty four, we were pleased to realize significantly improved year over year free cash flow and a large increase in cash provided from operations. And we turned our GAAP net income from negative to positive for the first time in 2 years. Our team's decisive actions are beginning to yield fruit and we are excited to see that our financial transformation is well underway. On a separate front, as we have communicated before, we distributed a special proxy to all Series A preferred shareholders recommending their approval of certain important changes to the terms of our Series A preferred stock. If approved, holders of Series A preferred stock will be placed on a more equal footing with Series B shareholders, having similar protections in the event of a change of control and equivalent dividend rights.

Speaker 3

Further, the company would have the right to exchange common stock for Series A preferred shares as more fully shareholders has been overwhelming and unambiguous. More than 85% of proxies returned to date have been in favor of the amendments. The support has been shared by Glass Lewis, a leading proxy vote advisory firm that analyzed our proposal and recommended that shareholders vote for the changes. While level of support has been strong, we still need the affirmative vote of at least 2 thirds of all outstanding shares, a challenge for even a popular proposal like this one given a fragmented retail ownership base. Therefore, we encourage Series A preferred shareholders to take the time to read the proxy materials and then let their voices be heard.

Speaker 3

I'll now turn the floor over to our Interim CFO, Norm Rolfe. Norm?

Speaker 4

Thanks, Steve, and thank you all for joining our call today. I would like to start by talking about our positive GAAP net income and cash flow, which I am sure are welcome news for investors. Q2 of 2024 was our Q1 with positive GAAP net income since 2022. During the 6 months ended June 30, 2024, we generated $8,300,000 of cash from operations and $4,900,000 of free cash flow. We were able to use the profits and cash flows we generated to repay 75% of the balance on our Silicon Valley Bank line of credit as of today.

Speaker 4

As of June 30, 2024, we had repaid $5,000,000 of the January 1 balance on our line of credit. Since June 30, we repaid an additional $2,500,000 bringing the balance from $10,000,000 on January 1 this year to $2,500,000 today. This means we have much more financial flexibility. In the Q2, we reported revenues of $28,100,000 while down $1,300,000 year over year, $1,000,000 of the decline was due to MedAssar, which is a project based professional services business that tends to fluctuate. Medisar has had softness since the second half of last year, which is continuing, but we are hopeful that we will see some growth in the second half of twenty twenty four.

Speaker 4

However, CareCloud Wellness generated over $1,000,000 in revenue for the first time this quarter and is up by $1,100,000 for the first 6 months this year compared to 2023. Our direct operating costs continue to decline and they are down by nearly $2,200,000 from Q2 2023. Our operating expenses, including G and A, R and D and sales and marketing expenses decreased by $2,900,000 On an annual run rate basis, these operating expenses are already down over $20,000,000 since Q1 2023. In the Q2, we reported positive GAAP operating income of $2,300,000 and GAAP net income of $1,700,000 both the highest amount since Q2 2022. This compares to a GAAP operating loss of $1,300,000 and a GAAP net loss of $1,800,000 during Q2 2023.

Speaker 4

The GAAP net loss per share was $0.14 based on the net loss attributable to common shareholders, which takes into account the preferred stock dividends earned, whether or not they were declared or paid during the quarter. This requires a little explanation. Even though by definition, GAAP net income is always shown before dividends and only dividends which have been declared by our Board of Directors are recorded on the balance sheet. The GAAP net loss per common share calculation reflects the dividends that accumulate monthly, whether or not these dividends were declared or paid. Non GAAP adjusted net income for the Q2 2024 was $3,000,000 or $0.18 per share calculated using the end of period common shares outstanding.

Speaker 4

We reported adjusted EBITDA of $6,400,000 in the 2nd quarter compared to $3,800,000 in the same period last year. This is our highest adjusted EBITDA since the Q2 of 2022. Revenue for the 1st 6 months of 2024 was $54,100,000 compared to $59,400,000 in the 1st 6 months of 20 23. Of the $5,300,000 decline, dollars 3,300,000 was attributable to MedAssar. For the 1st 6 months of 2024, the company's GAAP net income was $1,400,000 compared to a GAAP net loss of $2,200,000 in the 1st 6 months of 2023.

Speaker 4

This equates to a loss of $0.24 per share after subtracting the preferred stock dividends earned but not declared or paid. Non GAAP adjusted net income for the first half of twenty twenty four was $3,200,000 or $0.20 per share. Year to date, adjusted EBITDA was $10,100,000 an increase of $2,000,000 from $8,100,000 in the same period last year. As of June 30, 2024, the company had approximately $2,600,000 of cash. Net working capital was 6 $74,000 and we had $5,000,000 drawn on our line of credit.

Speaker 4

As previously stated, since June 30, we repaid an additional $2,500,000 on the line, bringing the balance to $2,500,000 today. Now that we are not dependent on our SVB line of credit, the company is considering reducing the total size of the line of credit from $25,000,000 to $10,000,000 This would save us fees on the unused portions of the line, but still provide the company with ample liquidity in the event there is a cash need. The 2nd quarter results puts us on a good footing for the year ahead. We're happy to have returned to profitability and look forward to updating you later in the year. With that, I'll now turn the call over to Mahmud for his closing remarks.

Speaker 4

Mahmood?

Speaker 5

Thank you, Noam. We are very pleased with the great improvement in profitability that we have achieved. Our primary focus is on creating long term value for our shareholders. I would like to thank our employees, our customers and shareholders for their continuous support in furthering CareCloud's mission. Operator, please open the floor for questions.

Operator

Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. The first question is from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead with your question.

Speaker 6

Good morning. This is Destiny on for Jeff. I just had a few quick questions. Maybe I'll start with your comments around contractors versus in house. And I'm wondering what percentage now of your operations is through contractors and what percentage is now in house?

Speaker 2

Okay. Hi, Stephanie. Good morning. And thank you for the question. And just a little clarification, then I turn it over to Steve.

Speaker 2

So when we talk about contractors, it was they were 1 or 2 very specific contractors on the IT side, which were being used by the CareCloud acquisition that we did, the CareCloud that's part of us now. So it's not that any operational, the RCM side of the thing, there were some very specific niche areas on the technology development side for which we were using the contractors, which took us little more time than usual to transition to our workforce. So in terms of the percent, I'm not sure if Steve or Norm, if you have any but it's Steve, by any chance, do you have any specific number for that contracted percent?

Speaker 3

Not a specific number, but the overwhelming majority of the work being performed is performed by our employees. There's a really minute portion that's being performed destiny by contractors. As Hadi said, really the contractors that we spoke about were a variety of different subcontractors, some in India, some in Central America and South America that were helping us from an R and D perspective. And they were really a holdover from 2 prior acquisitions. So as we move forward and we analyze that particular spend, we really came to conclusion that we would be much better off long term reducing that overall expense, which can lead by moving to our in house experts, we're able to reduce that expense by about 80%, 85% roughly and also have greater control over the work being performed.

Speaker 3

So really a positive all the way around.

Speaker 6

Okay, got it. Yes, that makes sense. And then I'd kind of like to move to your commentary around industry partners, especially moving into 2025. Is the interest largely inbound or are you also are there also efforts kind of outbound as well finding potential partners that way?

Speaker 2

No, that's a great question, Destiny. So it's both. So one is the we already have multiple channel partners who we work with. So they are either acting as resellers for us or let's say for KCloudForce as an example. So we there are a number of these partners who leverage our employees.

Speaker 2

So there is an inbound interest for expansion based on the different marketing campaigns and then we we'll be spending more doing some more investment towards an outreach for finding additional partners.

Speaker 6

Okay. Got it. And then I think historically, if I remember correctly, you've given us kind of a number on the value of your pipeline. Are you able to provide those numbers?

Speaker 2

Yes. So I think what we have Dusty, what we try to do going forward is more focused on the recognized revenue, the actual revenue that we are able to generate out of those bookings. But if you just think about pipeline, right now the number is about $16,000,000 plus in pipeline, but this number continuously keeps evolving. It keeps adding and removed and being removed. But over if you just zoom out and think about the possible the way from we think about growing, and this $16 plus 1,000,000 does not include the cross sell and up sell opportunities.

Speaker 2

This is all from the new logos perspective. So there's a tremendous opportunity that exists in our existing client base. And that's what I mentioned that this year, year to date booking numbers has almost doubled from cross sell, up sell compared to the same time last year. And even on the recognized revenue basis, it's $50,000,000 we expect this year to be from the first half of the years of the booking, the recognized revenue to be 50% higher than the last year same time. So I won't count too much on that pipeline number.

Speaker 2

I think if we look at it from the revenue growth perspective, the recognized revenue perspective, that's where I would give more focus to.

Speaker 6

Okay. Okay. Got it. And then when you talk about Cirrus AI and the I don't want to call it like a beta launch, but the initial users, what is the size? Well, what are the size of those users?

Speaker 6

And based on your learnings and early adopter feedback, what would be some of the areas you would deploy AI next?

Speaker 2

Sure. And so we have as I mentioned, we pushed it to couple hundred, I would say, the existing users and there are the initial interest for it's a couple dozen at the moment who have signed up for our the 30 days risk free trial. And we still have to do some work in terms of convincing the clients for the real value of the AI and the adoption. So we launched 2 products from the front end perspective. 1 was that Cirrus AI Guide, which basically recommends the procedure and the diagnosis.

Speaker 2

And this other product was SyllisAI NORS, which basically listen to the dialogue between patients and the doctor and converts that into a chart. So what we the next product that we are working on next is and that's also actually we just recently rolled out to at least one of the providers, which is going to provide the best of the both worlds. So that's similar to Sidus AI notes, it will listen to the conversation and that conversation then gets converted into the recommended course. So we just try to merge the 2 applications together to provide the true value. So think about it, a patient doctor talking to each other, it extract the information and then based on the prior social history and the historical care plans, also at the same time, recommends and convert that dialogue in not only just the chart, but the suggested diagnosis and procedure codes.

Speaker 2

So that's the next that we already have started to roll out. It's just our first provider who has started to use it on the test basis. The same user base who will sign up for our CareCloud notes, that will be our 1st set of clients who will be updated to this new version.

Speaker 6

Okay. All right. Got it. And then one last one, I promise. How does M and A kind of fit into your growth strategy in 2025?

Speaker 6

It sounds like most of the growth is going to be organic, but is there any part of that strategy that is dedicated to M and A?

Speaker 3

Yes. Good question, Destiny. As we think about growth, as we pivot into full growth mode in 2025, we think the majority of that overall growth will come from expanding the existing wallet share of our existing customers and then through partnerships, which you mentioned before. So we have today about 25 partnerships, reseller relationships, primarily with medical billing companies. But we have the opportunity to be able to sell into those existing relationships, things like Force, which helps them augment their force, and other solutions like CCM and the like.

Speaker 3

So in terms of being able to take those partnerships and expand those existing partnerships and also to develop other partnerships with other we think there's a significant opportunity to be able to partner with them, to enable them to be a reseller of our software and then also to be able to empower them with our force augmentation so that they can grow in their space and become increasingly profitable. To your question though, in particular with regard to acquisitions, we really do see kind of within this partnership, within this kind of billing company partnership area, we see the opportunity to maybe not engage in traditional kind of traditional acquisitions, but to engage in some quasi acquisitions, by which I mean to really enable them to provide our software, to leverage our team and to really revolutionize their current construct, their current business model in such a way that in many respects, we have the benefits of the acquisition from a revenue perspective and from a cash flow perspective without actually doing a traditional purchase of the stock. So we'll see as the year unfolds, but we're really committed to continuing to expand free cash flow as the year progresses.

Speaker 3

And then any of our growth will really be, 1st and foremost, really concentrated on opportunities that we can pursue in a manner that allows us to continue to expand cash flow.

Speaker 6

Okay, got it. Thank you for all that information. I'm going to go ahead and get back in queue now. Thanks.

Speaker 3

Thanks so much.

Operator

Thank you. The next question is from Allen Klee with Maxim Group. Please go ahead.

Speaker 7

Yes. Good morning. Great execution. Can we start on Med SR? You mentioned continued softness, some hope for growth in the second half.

Speaker 7

What's the state of the market there? Is it the competitive environment that some parties are not allowed to use you or where do you see the potential to maybe turn things around? Thanks.

Speaker 2

Thank you, Ellen. Good morning. So you're right. I think the industry of the health system, as we all know, is still continuing to be dominated by at least one stakeholder and the rest of the market share is between the next 2 or 3 other vendors. So we continue to work and expand the relationship with the second and the third into the in the industry in the market.

Speaker 2

When it comes to the 1st dominated player in the market, we still only can do a small piece of the overall services that we could have offered for the other smaller market share vendors. And that one, we started to try to earn that business since it was completely stopped for us for the last 2 years. So getting back on track is that it's realistically going to take some time because the projects are already signed and in works. So someone who is looking to get a new project started by the time we even sign up and start to recognize the revenue, it's going to take us couple of months before we can earn that. But overall, bigger picture for MedAssign, how we think we can grow into that space, which is continue to leverage our technology enabled RCM solutions and some of these, whether it's an AI based tools or tools or over BI solutions, how we can cross sell and up sell into that MedAssar space.

Speaker 2

So we continue to we will continue and continue to push towards that. And the second thing is it's expanding our relationship to the second and the third after the first the largest marketer order.

Speaker 7

Thank you. And then you had positive commentary on remote patient monitoring wellness overall. Is that growing as it just takes longer with existing customers to get set up where then they can get patients compliant and billing? Or is it also from like expanding the number of customers? Thanks.

Speaker 2

And then actually it's a combination of both and as we evolve over the last roughly 2 years now into this year and a half, 2 years now for this chronic care management and remote patient monitoring. So as an example, now recently we have started we launched our internal, the next generation platform for remote patient monitoring and chronic care management. So now we started to leverage other Myers to engage the patient instead of just calling the patient. So in addition to calling the patient now, we are also trying to engage them through text messages, through e mails, sending them the training videos, sending them the different type of text messages, which whenever the patient has the time can click on it and fill up the forms and then our care managers get involved. We have overall improved the way we are approaching and trying to engage the patients.

Speaker 2

So one, it will, yes, even increase the existing patient adoption from the existing clients who already have started to take this service from us. And the second, the expanding in our existing client base, the chronic care management design, doing the new sales in our existing client base. In terms of the new logos, we do try to pitch those to the external clients, but this becomes a secondary nature. With the help of this and other hook, we try to always sign up for the overall technology enabled solution, RCM plus SaaS solution and then also provide this chronic care management and remote patient monitoring service. Because for us, the best thing would be to sign up our customer for the full end to end services that we can offer, chronic care remote patient monitoring being one part of it.

Speaker 7

Thank you. Last question on Cloud CareCloud Cirrus AI. How do you could you talk a little about how you're thinking about going from a relatively small amount of customers to expanding it broader? Do you feel you have the sales infrastructure to do that or how would you approach that? And is it how do you feel about the competitive market of affecting decision makers?

Speaker 7

Thank

Speaker 2

you. Yes. So and if you think about it, we until the last, let's say, the 30 days or the 60 days before, our first challenge was similar to other AI companies was refining the results, focusing on we try to use our own data and with the help of the AI technology leverage through either Google partnership or other players, how we can leverage our own data plus using the L and M's already provided by whether it's Google or other players. So we kept on refining our applications and then finally was able to push it out over the in the last 30 to 45 days to the existing client base. Similar to any other service and other solution offering we have, our best opportunity exists with the existing client base.

Speaker 2

We work with 2,600 plus practices and 40,000 providers, including the BI solution clients. So I think there's a tremendous opportunity that exists to expand into the existing client base. So and I think AI is becoming, 1, the top line direct revenue driver. But in addition to that, improving the existing workflows, how the same practice can save time because now the AI is part of workflows. When you use chat GPT, the same e mail can be written in, let's say, 5 seconds compared to 2 minutes.

Speaker 2

So but it's not that you will be driving the direct revenue, but the overall workflow will help improve the revenue of the client. And since most of our clients, we charge them on the collection fee, our revenue will increase. So to answer the question, yes, there is is going is going to improve transcription as an example. The existing client can take the service, sign up for the service and the existing EHR system, this solution become part of the existing workflow. So we think that this is one

Speaker 5

of the differentiation when you compare us to our

Speaker 2

separate solution running independently and not fully integrated into their existing platform.

Speaker 7

That's great. Thank you so much. Thank you.

Operator

Thank you. As there are no further questions, I would now like to hand the conference over to Norman Roth for closing remarks.

Speaker 4

Thank you everyone for attending our conference today. Have a great day.

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Key Takeaways

  • Profitability Turnaround: CareCloud achieved its first positive GAAP net income since 2022, generating $4.9 M in free cash flow and repaying $7.5 M of debt year to date, positioning the company to potentially resume preferred dividends.
  • CareCloud Cirrus AI Nodes Launch: The new AI-driven documentation tool has been piloted with select clients who report improved efficiency and accuracy; it will retail at $199 per provider per month and revenue recognition began in Q3.
  • Cross-sell and up-sell momentum doubled year-over-year, with bookings projected to drive 50% higher recognized revenue in 2024 compared to last year, while the CareCloud Wellness program revenue surged 154% year-over-year, surpassing $1 M in a quarter for the first time.
  • A cost transformation initiative identified $26 M in annualized savings—approximately $20 M to be realized in 2024—through proprietary technology deployment, reduced contractor reliance, and global delivery efficiencies, contributing to improved margins.
  • Professional services revenues from the MedAssar business declined by $3.3 M year to date and remain soft, with management cautious about near-term recovery given contract timing and market dynamics.
AI Generated. May Contain Errors.
Earnings Conference Call
CareCloud Q2 2024
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