CareCloud Q2 Earnings Call Highlights

Key Points

• CareCloud’s Q2 revenue rose 16% to $31.9 million, marking its ninth consecutive quarter of GAAP profitability, although net income declined to $1.1 million due to AI investments, higher interest expense and acquisition-related amortization.
• The company redeemed all Series B preferred stock using a $50 million credit facility, eliminating about $3.3 million in annual preferred dividends without diluting common shareholders, though debt will increase interest costs.
• CareCloud reaffirmed 2026 guidance of $128 million–$132 million in revenue and $29 million–$31 million in adjusted EBITDA, expecting a stronger second half driven by recurring revenue, cross-selling, integration savings and new AI products.

CareCloud NASDAQ: CCLD reported second-quarter revenue growth of 16% and its ninth consecutive quarter of GAAP profitability, while emphasizing investments in artificial intelligence, acquisition integration and an expanded healthcare compliance offering.

Revenue for the quarter ended June 30 totaled $31.9 million, compared with $27.4 million a year earlier. First-half revenue rose 15% to $63.2 million. The company said recurring technology-enabled business solutions accounted for about 75% of quarterly revenue, up from 69% in the prior-year period.

GAAP net income was $1.1 million in the second quarter, down from $2.9 million a year earlier. Adjusted EBITDA was $5.9 million, while adjusted net income was $2.4 million, or $0.06 per share, compared with $3.3 million, or $0.07 per share, in the prior-year quarter. After preferred-stock dividends, earnings per share were breakeven for the quarter.

Interim Chief Financial Officer and Corporate Controller Norman Roth said lower reported profitability reflected investments in AI-enabled capabilities, higher interest expense associated with new borrowings and amortization from acquired intangible assets. He said gross margins were consistent between periods.

Preferred Stock Redemption Reshapes Capital Structure

CareCloud completed the redemption of all outstanding Series B preferred stock on May 15, funding the transaction through a $50 million credit facility with Citizens Bank and Provident Bank. Chief Executive Officer Stephen Snyder said the redemption was completed without dilution to common shareholders and eliminates approximately $3.3 million in annual preferred dividends.

The company paid about $6.4 million in preferred dividends during the first six months of 2026. Snyder said that, beginning in the third quarter, a larger share of net income should be available to common shareholders, offset by interest costs on the debt facility, which he described as meaningfully less costly than the preferred-stock obligation.

As of June 30, CareCloud had approximately $13.4 million in cash and net working capital of $695,000. The company also established a $60 million at-the-market equity program to provide potential capital for future growth opportunities.

Free cash flow, as defined by the company, increased to $5.7 million in the second quarter from $5.4 million a year earlier. First-half free cash flow was $8.1 million, compared with $9.1 million in the prior-year period.

Compliance Acquisition and Cross-Selling Plans

In May, CareCloud acquired Empower Healthcare & Compliance Partners, a compliance and advisory firm founded by Mitchell Brie, who joined the company as president of Empower. Snyder said the deal was funded with operating cash flow and represents CareCloud’s entry into compliance, audit defense and regulatory-readiness services.

The acquisition had minimal financial impact during the second quarter because it closed in mid-May, Snyder said during the question-and-answer session. He added that the company does not expect Empower to make a material near-term contribution to revenue or EBITDA. Instead, CareCloud sees the primary opportunity in cross-selling compliance offerings to its existing customer base and introducing its revenue-cycle management and electronic health record services to Empower clients.

CareCloud plans to introduce AI-enabled compliance software in the fall of 2026. The planned offering will include a tiered, subscription-based proactive compliance program supported by Empower’s compliance professionals.

Snyder said Empower’s coding and compliance team helped a wound-care provider reverse more than $1 million in alleged overpayments in an audit-defense matter during June.

AI Products and Platform Integration

Chief Strategy Officer A. Hadi Chaudhry said CareCloud’s AI prior-authorization and AI-assisted medical-coding products remain on track for commercial introduction this year. The prior-authorization product is in pilot deployments, while the coding product is being used internally as the company works to meet desired accuracy levels.

The company is also signing new business for its stratusAI Desk Agent voice product, though Chaudhry said revenue remains at an early stage and CareCloud is prioritizing implementation quality over rapidly increasing deployment counts.

During the quarter, CareCloud completed platform parity work between its legacy inpatient revenue-cycle system and RCM Cloud, as well as planned CareVue parity items. It also integrated its Breeze patient-experience layer and cirrusAI Notes into Wellsoft’s emergency-department workflow. A Stratus AI integration is planned for the following quarter, while Wellsoft’s transition to a cloud-based SaaS platform remains on track for completion later in 2026.

CareCloud also completed integrations with PracticeMatch and DocCafe for its Marketware physician relationship platform, launched a candidate portal and put its AI candidate-matching engine into production. Chaudhry said the company is pursuing a longer-term effort to consolidate acquired platforms onto a shared modular platform and common data and AI foundation.

Guidance Reaffirmed; Second Half Expected to Improve

CareCloud reaffirmed its full-year 2026 guidance for revenue of $128 million to $132 million, adjusted EBITDA of $29 million to $31 million and GAAP earnings per share of $0.20 to $0.23.

Management said the outlook implies a stronger second half, supported by seasonal factors, recurring-revenue growth, expanded enterprise relationships, cross-selling initiatives, integration savings and the absence of Series B preferred dividends for the full second half. Snyder said the company would need quarterly revenue of roughly $33 million to $34 million during the remainder of the year to meet its revenue guidance.

Roth said amortization expense is expected to decline because the company uses an accelerated, declining-balance approach for acquired intangibles.

Separately, Snyder addressed a March cybersecurity incident affecting one CareCloud Health environment. He said the company restored the affected system the same day, removed the unauthorized actor from the system and subsequently received third-party forensic validation of that assessment. The company is sending notices to affected patients and does not expect the incident to have a material impact on operations or financial condition, with insurance expected to cover related costs.

About CareCloud (NASDAQ:CCLD)

CareCloud, Inc is a healthcare technology company that provides cloud-based practice management, electronic health record (EHR) and revenue cycle management (RCM) solutions to medical practices and health systems. Its flagship offering, the CareCloud Central platform, combines clinical, financial and administrative workflows into a single, unified system. The platform includes modules for scheduling, billing, coding, patient engagement and telehealth, enabling practices to streamline front- and back-office operations and improve overall practice performance.

Founded in 2009 and headquartered in Miami Beach, Florida, CareCloud serves small to mid-size physician groups and specialty clinics across the United States.

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