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CI

CareCloud, Inc. (CCLD)·Q2 2025 Earnings Summary

Executive Summary

  • CareCloud delivered its first positive GAAP EPS as a public company, with Q2 2025 GAAP EPS of $0.04 and GAAP net income of $2.9M; adjusted EPS was $0.07 and adjusted EBITDA $6.5M .
  • Revenue of $27.4M declined 2.5% YoY due to a non-recurring item in Q2 2024, but profitability improved materially on lower operating costs and margin expansion .
  • 2025 guidance was reaffirmed at Q2 (Revenue $111–$114M; Adj. EBITDA $26–$28M; GAAP EPS $0.10–$0.13), then raised on Sept. 2 post-Medsphere acquisition: 2025 revenue $116–$118M and 2026 revenue $128–$130M; management cautioned GAAP EPS may face higher non-cash amortization .
  • Stock narrative catalysts: first-ever positive GAAP EPS milestone; AI Center of Excellence execution; ONC certification for TalkEHR targeting ~1,300 critical access hospitals; tuck-in M&A and internally funded investment, supporting medium-term growth and margin trajectory .

What Went Well and What Went Wrong

What Went Well

  • First quarter of positive GAAP EPS since IPO; “Reporting our first positive EPS as a public company again is a major milestone” .
  • Margin expansion and cost discipline: GAAP operating margin 10.9% vs 8.1% YoY; direct operating costs down ~$0.76M YoY; S&M and G&A down ~$1.4M combined .
  • AI execution and new markets: ONC Health IT Certification for TalkEHR at CAHs (entry to inpatient EHR), dermatology EHR launch; “We’re advancing our 2025 product roadmap and gaining traction with Cirrus AI Notes and Cirrus AI Voice” .

What Went Wrong

  • Revenue down 2.5% YoY to $27.377M due to a one-time non-recurring revenue item in Q2 2024; revenue mix remains RPM ≤5%, limiting contribution from newer programs near term .
  • Non-GAAP adjustments still material: stock-based comp, amortization, restructuring and other items bridge GAAP to adjusted metrics; GAAP EPS sensitivity to preferred dividends persists (Q2 dividends $1.365M) .
  • GAAP EPS outlook could be pressured by higher non-cash amortization from Medsphere, even as revenue guidance rises .

Financial Results

Income Statement and Margins (Quarterly)

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$28.090 $28.239 $27.632 $27.377
GAAP Net Income ($USD Millions)$1.674 $3.296 $1.948 $2.902
GAAP EPS to Common ($)($0.14) $0.00 ($0.04) $0.04
Adjusted EBITDA ($USD Millions)$6.389 $7.141 $5.595 $6.529
GAAP Operating Margin (%)8.1% 12.2% 7.3% 10.9%
Adjusted Operating Margin (%)11.6% 14.0% 8.5% 12.2%

Cash Flow and Liquidity KPIs

MetricQ4 2024Q1 2025Q2 2025
Cash from Operations ($USD Millions)$5.229 $5.113 $7.408
Free Cash Flow ($USD Millions)$2.967 $3.643 $5.415
Cash Balance ($USD Millions)$5.145 $6.805 $10.440
Net Working Capital ($USD Millions)$5.2 $11.7 ~$14.9

Selected KPIs & Mix

KPIQ2 2025
CareCloud Wellness Revenue ($USD Millions)~$1.0
RPM Revenue Mix (%)≤5%
Preferred Dividends Paid ($USD Millions)$1.365
Common Shares Outstanding (End of Period)42,322,039

Q2 2025 Actuals vs Wall Street Consensus (S&P Global)

MetricConsensusActualDelta
Revenue ($USD Millions)$27.1867*$27.377 +$0.1903
Primary EPS ($)$0.02*$0.07*+$0.05
Adjusted EBITDA ($USD Millions)$6.0820*$6.4670*+$0.3850

Values with an asterisk (*) retrieved from S&P Global.

Context: GAAP EPS was $0.04, while S&P’s Primary EPS “actual” reflects adjusted/normalized EPS conventions; adjusted EPS per company was $0.07 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$111–$114M $116–$118M Raised
Adjusted EBITDAFY 2025$26–$28M No change anticipated Maintained
GAAP EPSFY 2025$0.10–$0.13 May be impacted by higher non-cash amortization Potentially Lower (non-cash)
RevenueFY 2026N/A$128–$130M Initiated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
AI Center of ExcellenceLaunch announced; scaling to 500 by 4Q25; AI “supercharging operations” 100 FT hires + 100 interns; Cirrus AI Notes/Voice traction; internal AI automation in RCM/denials; roadmap detailed Accelerating execution
Revenue trajectoryFY24 revenue $110.8M; stabilization focus; Q1 2025 +6% YoY Q2 2025 down YoY due to Q2’24 one-time item; YTD revenue up; later 2025 revenue guidance raised post-M&A Stabilizing; outlook improved
Cost discipline/marginsCost structure transformed; highest quarterly adj. EBITDA in 2 years (Q4) GAAP op margin 10.9%; OpEx down; free cash flow strong; positive GAAP EPS Margin expansion sustained
M&A strategy/fundingReignited acquisitions (Mar/Apr 2025); internally funded; debt repaid Two acquisitions completed; active pipeline; example RevenueMed with no-money-down earnout; funding via FCF and undrawn SVB facility Active, disciplined
Inpatient EHR/CAHN/A priorONC certification for CAH TalkEHR (8/1); entry to ~1,300 CAHs New vertical expansion
RPM/MedAssar performanceRPM mix small RPM ~≤5% of revenue; MedAssar largely stable YoY Stable, modest mix

Management Commentary

  • “We achieved GAAP net income of $2,900,000… this quarter marks the first time in CareCloud’s history that we’ve delivered positive GAAP earnings per share at $0.04” — Stephen Snyder, Co-CEO .
  • “We are already using AI to enhance product development… cirrusAI Notes… automate some follow-up tasks” — A. Hadi Chaudhry, Co-CEO .
  • “We delivered a strong quarter… Positive earnings per share and strong cash flow underscore our continued operational efficiency… Revenue of $27,400,000 while down… due to a one-time non recurring revenue item in Q2 2024” — Norman Roth, Interim CFO .
  • “CareCloud has received ONC Health IT certification for our Talk EHR platform tailored specifically for critical access hospitals… opens access [to] more than 1,300 rural hospitals” — A. Hadi Chaudhry .

Q&A Highlights

  • AI investment and returns: Management emphasized threefold benefits—incremental revenue from AI products, competitiveness of core platforms, and back-office margin lift—funded from internal free cash flow .
  • Go-to-market for specialty/inpatient EHR: Strategy to upsell existing RCM/PM clients into integrated specialty EHRs and penetrate CAHs with certified inpatient EHR; small vendor universe strengthens positioning .
  • RPM/MedAssar: RPM to remain ~≤5% of mix; MedAssar revenue stable YoY; focus remains margin expansion and acquisitive/organic growth .
  • M&A funding and examples: Tuck-ins funded by free cash flow; undrawn SVB facility available; RevenueMed earnout-only structure cited; largest customer expanded to 3-year agreement post-acquisition .
  • Seasonality and capitalized software: Expect Q3/Q4 to mirror prior year with modest increases; capitalized software aimed at AI-focused platform improvements .

Estimates Context

  • Q2 2025 revenue modestly beat consensus ($27.377M actual vs $27.1867M consensus); Primary EPS materially beat ($0.07 vs $0.02); EBITDA beat ($6.467M vs $6.082M)*. Values retrieved from S&P Global.
  • Note: Company-reported GAAP EPS was $0.04 and adjusted EPS $0.07; S&P’s Primary EPS “actual” aligns more closely with adjusted/normalized EPS conventions .

Values with an asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Profitability inflection: First-ever positive GAAP EPS and expanding margins signal improved operating leverage; cost discipline and AI-driven efficiencies underpin sustainability .
  • Growth vectors: ONC-certified CAH EHR unlocks new inpatient segment; specialty EHR (dermatology) and Cirrus AI modules enhance upsell and platform stickiness .
  • M&A optionality: Internally funded tuck-ins plus undrawn credit facility enable disciplined consolidation; structures like RevenueMed earnout reduce upfront cash risk .
  • Near-term estimates likely to adjust upward on EPS given beat and raised revenue guidance post-Medsphere; GAAP EPS could face non-cash amortization headwinds from acquisition .
  • Cash generation: Strong free cash flow supports preferred dividend payments and reinvestment; liquidity improved with cash at $10.4M and working capital ~$14.9M .
  • Narrative catalyst: AI Center of Excellence execution, quantifiable operational benefits, and CAH entry are likely focus points for investor sentiment and multiple support .
  • Risk watch: Execution on CAH deployments and integration of acquired assets; maintaining client retention while scaling AI features; amortization-driven GAAP EPS optics .