Reaffirms Guidance Following Capital Structure Simplification; Revenue Grows 13% Year-Over-Year
First Quarter 2026 Financial Highlights:
- Revenue of
$31.3 million , compared to$27.6 million in Q1 2025 - GAAP net income of
$922,000 , compared to a net income of$1.9 million in Q1 2025 - Adjusted EBITDA of
$5.4 million , compared to$5.6 million in Q1 2025 - GAAP EPS of (
$0.01 ), compared to ($0.04 ) per share in Q1 2025
Recent Accomplishments
- Full Scheduled Redemption of Series B Preferred Stock: Redemption scheduled for
May 15, 2026 - Inpatient Software Market Entry: Expanded product portfolio includes inpatient EHR, RCM and analytics. #1 Black Book ranked EDIS platform— significantly broadening the total addressable market
AI Center of Excellence Live : Launched stratusAI Desk Agent (~75% of inbound calls automated) and stratusAI Voice Audit
Management Commentary
“Q1 2026 marks the start of an exciting new chapter for
—
“This was the quarter our AI strategy moved from promise to performance. stratusAI Desk Agent is now resolving approximately 75% of inbound patient calls autonomously, stratusAI Voice Audit is surfacing revenue and compliance opportunities in real time, and our newly launched
—
“We are reaffirming our 2026 guidance based on our confidence for the year. The integration of our
—
2026 Outlook
| For the Fiscal Year Ending | Full Year 2026 Guidance | |
| Revenue | ||
| Adjusted EBITDA | ||
| GAAP Net Income Per Share (EPS) |
Revenue guidance is based on management’s expectations for contributions from existing clients, together with cross-selling and other organic and inorganic growth. EPS guidance of
As anticipated, Q1 2026 GAAP net income reflects a temporary, near-term impact from elevated amortization of acquired intangible assets and one-time integration costs tied to the
Conference Call Information
Webcast: ir.carecloud.com/events
Dial-in (Audio Only): 646-307-1865 | Reference: “CareCloud, Inc. First Quarter 2026 Results Conference Call.”
About
Follow
For additional information, please visit our website at carecloud.com. To listen to video presentations by CareCloud’s management team, read recent press releases and view the latest investor presentation, please visit ir.carecloud.com.
Contacts
| Company Contact: Interim Chief Financial Officer and Corporate Controller nroth@carecloud.com | Investor Contact: Chief Executive Officer ir@carecloud.com |
Use of Non-GAAP Financial Measures
In our earnings releases, prepared remarks, conference calls, slide presentations and webcasts, we use and discuss non-GAAP financial measures, as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the condensed consolidated financial statements. Our earnings press releases containing such non-GAAP reconciliations can be found in the Investor Relations section of our web site at ir.carecloud.com.
Forward-Looking Statements
This press release contains various forward-looking statements within the meaning of the safe harbor provisions of the
Our operations involve risks and uncertainties, many of which are outside our control and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Forward-looking statements in this press release include, without limitation, statements reflecting management’s expectations for future financial performance and operating expenditures, expected growth, profitability and business outlook, and the expected results from the integration of our acquisitions.
These forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are only predictions, are uncertain and involve substantial known and unknown risks, uncertainties and other factors which may cause our (or our industry’s) actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. New risks and uncertainties emerge from time to time and it is not possible for us to predict all of the risks and uncertainties that could have an impact on the forward-looking statements, including without limitation, risks and uncertainties relating to the Company’s ability to manage growth, migrate newly acquired customers and retain new and existing customers, maintain cost-effective global operations, increase operational efficiency and reduce operating costs, predict and properly adjust to changes in reimbursement and other industry regulations and trends, retain the services of key personnel, develop new technologies, upgrade and adapt legacy and acquired technologies to work with evolving industry standards, compete with other companies’ products and services competitive with ours, manage and keep our information systems secure and other important risks and uncertainties referenced and discussed under the heading titled “Risk Factors” in the Company’s filings with the Securities and Exchange Commission.
The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligations to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF
($ in thousands, except share and per share amounts)
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 3,354 | $ | 3,117 | ||||
| Restricted cash | 500 | 500 | ||||||
| Accounts receivable - net | 15,236 | 15,062 | ||||||
| Contract asset | 3,502 | 3,664 | ||||||
| Inventory | 432 | 507 | ||||||
| Current assets - related party | 16 | 16 | ||||||
| Prepaid expenses and other current assets | 3,048 | 2,872 | ||||||
| Total current assets | 26,088 | 25,738 | ||||||
| Property and equipment - net | 7,461 | 7,775 | ||||||
| Operating lease right-of-use assets | 4,662 | 3,106 | ||||||
| Intangible assets - net | 16,500 | 18,968 | ||||||
| 31,435 | 31,442 | |||||||
| Other assets | 573 | 569 | ||||||
| TOTAL ASSETS | $ | 86,719 | $ | 87,598 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,508 | $ | 6,937 | ||||
| Accrued compensation | 3,476 | 4,136 | ||||||
| Accrued expenses | 5,951 | 5,970 | ||||||
| Operating lease liability (current portion) | 1,358 | 927 | ||||||
| Deferred revenue (current portion) | 4,748 | 4,148 | ||||||
| Notes payable (current portion) | 742 | 728 | ||||||
| Contingent consideration (current portion) | 734 | 909 | ||||||
| Dividend payable | 944 | 668 | ||||||
| Total current liabilities | 23,461 | 24,423 | ||||||
| Notes payable | 250 | 441 | ||||||
| Contingent consideration | 400 | 232 | ||||||
| Operating lease liability | 3,390 | 2,187 | ||||||
| Deferred revenue | 891 | 809 | ||||||
| Total liabilities | 28,392 | 28,092 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| SHAREHOLDERS’ EQUITY: | ||||||||
| Preferred stock, | 2 | 2 | ||||||
| Common stock, | 43 | 43 | ||||||
| Additional paid-in capital | 117,807 | 119,936 | ||||||
| Accumulated deficit | (54,910 | ) | (55,832 | ) | ||||
| Accumulated other comprehensive loss | (3,953 | ) | (3,981 | ) | ||||
| Less: 740,799 common shares held in treasury, at cost at | (662 | ) | (662 | ) | ||||
| Total shareholders’ equity | 58,327 | 59,506 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 86,719 | $ | 87,598 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED
($ in thousands, except share and per share amounts)
| Three Months Ended | ||||||||
| 2026 | 2025 | |||||||
| NET REVENUE | $ | 31,270 | $ | 27,632 | ||||
| OPERATING EXPENSES: | ||||||||
| Direct operating costs | 16,850 | 15,464 | ||||||
| Selling and marketing | 1,414 | 1,131 | ||||||
| General and administrative | 5,496 | 4,332 | ||||||
| Research and development | 2,416 | 1,235 | ||||||
| Change in contingent consideration | 57 | - | ||||||
| Depreciation and amortization | 4,037 | 3,337 | ||||||
| Restructuring costs | - | 114 | ||||||
| Total operating expenses | 30,270 | 25,613 | ||||||
| OPERATING INCOME | 1,000 | 2,019 | ||||||
| OTHER: | ||||||||
| Interest income | 10 | 42 | ||||||
| Interest expense | (58 | ) | (58 | ) | ||||
| Other income (expense) - net | 22 | (14 | ) | |||||
| INCOME BEFORE PROVISION FOR INCOME TAXES | 974 | 1,989 | ||||||
| Income tax provision | 52 | 41 | ||||||
| NET INCOME | $ | 922 | $ | 1,948 | ||||
| Preferred stock dividend | 1,365 | 2,811 | ||||||
| NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (443 | ) | $ | (863 | ) | ||
| Net loss per common share: basic and diluted | $ | (0.01 | ) | $ | (0.04 | ) | ||
| Weighted-average common shares used to compute basic and diluted loss per share | 42,471,949 | 23,813,943 | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
($ in thousands)
| 2026 | 2025 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 922 | $ | 1,948 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 4,085 | 3,407 | ||||||
| Lease amortization | 463 | 480 | ||||||
| Provision for expected credit losses | 106 | 70 | ||||||
| Foreign exchange loss (gain) | 11 | (1 | ) | |||||
| Interest accretion | 87 | 107 | ||||||
| Change in contingent consideration | 57 | - | ||||||
| Stock-based compensation expense | 64 | 108 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (280 | ) | (1,183 | ) | ||||
| Contract asset | 162 | (105 | ) | |||||
| Inventory | 75 | (35 | ) | |||||
| Other assets | (228 | ) | (908 | ) | ||||
| Accounts payable and other liabilities | (2,595 | ) | 956 | |||||
| Deferred revenue | 682 | 269 | ||||||
| Net cash provided by operating activities | 3,611 | 5,113 | ||||||
| INVESTING ACTIVITIES: | ||||||||
| Purchases of property and equipment | (412 | ) | (624 | ) | ||||
| Capitalized software and other intangible assets | (820 | ) | (846 | ) | ||||
| Initial payment for acquisition | - | (40 | ) | |||||
| Net cash used in investing activities | (1,232 | ) | (1,510 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Preferred stock dividends paid | (1,916 | ) | (1,730 | ) | ||||
| Payment of contingent consideration | (57 | ) | - | |||||
| Payment of tax withholding on stock issued to employees | - | (21 | ) | |||||
| Repayments of notes payable | (177 | ) | (181 | ) | ||||
| Net cash used in financing activities | (2,150 | ) | (1,932 | ) | ||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND RESTRICTED CASH | 8 | (11 | ) | |||||
| NET INCREASE IN CASH AND RESTRICTED CASH | 237 | 1,660 | ||||||
| CASH AND RESTRICTED CASH - Beginning of the period | 3,617 | 5,145 | ||||||
| CASH AND RESTRICTED CASH - End of the period | $ | 3,854 | $ | 6,805 | ||||
| SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Conversion of preferred stock and accrued dividends to common stock | $ | - | $ | 2,435 | ||||
| Dividends declared, not paid | $ | 944 | $ | 1,299 | ||||
| SUPPLEMENTAL INFORMATION - Cash paid during the period for: | ||||||||
| Income taxes | $ | 14 | $ | 15 | ||||
| Interest | $ | 21 | $ | 18 | ||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO COMPARABLE GAAP MEASURES (UNAUDITED)
The following is a reconciliation of the non-GAAP financial measures used by us to describe our financial results determined in accordance with accounting principles generally accepted in
While management believes that these non-GAAP financial measures provide useful supplemental information to investors regarding the underlying performance of our business operations, investors are reminded to consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies, and management may utilize other measures to illustrate performance in the future. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP.
Adjusted EBITDA to GAAP Net Income
Set forth below is a reconciliation of our “adjusted EBITDA” to our GAAP net income.
| Three Months Ended | ||||||||
| 2026 | 2025 | |||||||
| ($ in thousands) | ||||||||
| Net revenue | $ | 31,270 | $ | 27,632 | ||||
| GAAP net income | 922 | 1,948 | ||||||
| Provision for income taxes | 52 | 41 | ||||||
| Net interest expense | 48 | 16 | ||||||
| Foreign exchange loss / other expense | 32 | 19 | ||||||
| Stock-based compensation expense | 64 | 108 | ||||||
| Depreciation and amortization | 4,037 | 3,337 | ||||||
| Change in contingent consideration | 57 | - | ||||||
| Transaction and integration costs | 158 | 12 | ||||||
| Restructuring costs | - | 114 | ||||||
| Adjusted EBITDA | $ | 5,370 | $ | 5,595 | ||||
Non-GAAP Adjusted Operating Income to GAAP Operating Income
Set forth below is a reconciliation of our non-GAAP “adjusted operating income” and non-GAAP “adjusted operating margin” to our GAAP operating income and GAAP operating margin.
| Three Months Ended | ||||||||
| 2026 | 2025 | |||||||
| ($ in thousands) | ||||||||
| Net revenue | $ | 31,270 | $ | 27,632 | ||||
| GAAP net income | 922 | 1,948 | ||||||
| Provision for income taxes | 52 | 41 | ||||||
| Net interest expense | 48 | 16 | ||||||
| Other (income) expense - net | (22 | ) | 14 | |||||
| GAAP operating income | 1,000 | 2,019 | ||||||
| GAAP operating margin | 3.2 | % | 7.3 | % | ||||
| Stock-based compensation expense | 64 | 108 | ||||||
| Amortization of purchased intangible assets | 928 | 89 | ||||||
| Transaction and integration costs | 158 | 12 | ||||||
| Change in contingent consideration | 57 | - | ||||||
| Restructuring costs | - | 114 | ||||||
| Non-GAAP adjusted operating income | $ | 2,207 | $ | 2,342 | ||||
| Non-GAAP adjusted operating margin | 7.1 | % | 8.5 | % | ||||
Non-GAAP Adjusted Net Income to GAAP Net Income
Set forth below is a reconciliation of our non-GAAP “adjusted net income” and non-GAAP “adjusted net income per share” to our GAAP net income and GAAP net income per share.
| Three Months Ended | ||||||||
| 2026 | 2025 | |||||||
| ($ in thousands ) | ||||||||
| GAAP net income | $ | 922 | $ | 1,948 | ||||
| Foreign exchange loss / other expense | 32 | 19 | ||||||
| Stock-based compensation expense | 64 | 108 | ||||||
| Amortization of purchased intangible assets | 928 | 89 | ||||||
| Transaction and integration costs | 158 | 12 | ||||||
| Change in contingent consideration | 57 | - | ||||||
| Restructuring costs | - | 114 | ||||||
| Non-GAAP adjusted net income | $ | 2,161 | $ | 2,290 | ||||
| Three Months Ended | ||||||||
| 2026 | 2025 | |||||||
| GAAP net loss attributable to common shareholders, per share | $ | (0.01 | ) | $ | (0.04 | ) | ||
| Impact of preferred stock dividend | 0.03 | 0.09 | ||||||
| Net income per end-of-period share | 0.02 | 0.05 | ||||||
| Foreign exchange loss / other expense | 0.00 | 0.00 | ||||||
| Stock-based compensation expense | 0.00 | 0.00 | ||||||
| Amortization of purchased intangible assets | 0.02 | 0.00 | ||||||
| Change in contingent consideration | 0.00 | - | ||||||
| Transaction and integration costs | 0.01 | 0.00 | ||||||
| Restructuring costs | - | 0.00 | ||||||
| Non-GAAP adjusted earnings per share | $ | 0.05 | $ | 0.05 | ||||
| End-of-period common shares | 42,492,949 | 42,321,129 | ||||||
For purposes of determining non-GAAP adjusted earnings per share, the Company used the number of common shares outstanding as of
Net cash provided by operating activities to free cash flow
Set forth below is a reconciliation of our non-GAAP “free cash flow” to our GAAP net cash provided by operating activities.
| Three Months Ended | ||||||||
| 2026 | 2025 | |||||||
| ($ in thousands) | ||||||||
| Net cash provided by operating activities | $ | 3,611 | $ | 5,113 | ||||
| Purchases of property and equipment | (412 | ) | (624 | ) | ||||
| Capitalized software and other intangible assets | (820 | ) | (846 | ) | ||||
| Free cash flow | $ | 2,379 | $ | 3,643 | ||||
| Net cash used in investing activities 1 | $ | (1,232 | ) | $ | (1,510 | ) | ||
| Net cash used in financing activities | $ | (2,150 | ) | $ | (1,932 | ) | ||
1. Net cash used in investing activities includes payments for acquisitions, purchases of property and equipment and capitalized software and other intangible assets. Purchases of property and equipment and capitalized software and other intangible assets are included in our computation of free cash flow.
Explanation of Non-GAAP Financial Measures
We report our financial results in accordance with accounting principles generally accepted in
Management uses adjusted EBITDA, adjusted operating income, adjusted operating margin, and non-GAAP adjusted net income to provide an understanding of aspects of operating results before the impact of investing and financing charges and income taxes. Adjusted EBITDA may be useful to an investor in evaluating our operating performance and liquidity because this measure excludes non-cash expenses as well as expenses pertaining to investing or financing transactions. Management defines “adjusted EBITDA” as the sum of GAAP net income (loss) before provision for (benefit from) income taxes, net interest expense, other (income) expense, stock-based compensation expense, depreciation and amortization, integration costs, transaction costs, impairment charges and changes in contingent consideration.
Management defines “non-GAAP adjusted operating income” as the sum of GAAP operating income (loss) before stock-based compensation expense, amortization of purchased intangible assets, integration costs, transaction costs, impairment charges and changes in contingent consideration, and “non-GAAP adjusted operating margin” as non-GAAP adjusted operating income divided by net revenue.
Management defines “non-GAAP adjusted net income” as the sum of GAAP net income (loss) before stock-based compensation expense, amortization of purchased intangible assets, other (income) expense, integration costs, transaction costs, impairment charges, changes in contingent consideration, any tax impact related to these preceding items and income tax expense related to goodwill, and “non-GAAP adjusted net income per share” as non-GAAP adjusted net income divided by common shares outstanding at the end of the period, including the shares which were issued but are subject to forfeiture and considered contingent consideration.
Management considers all of these non-GAAP financial measures to be important indicators of our operational strength and performance of our business and a good measure of our historical operating trends, in particular the extent to which ongoing operations impact our overall financial performance.
In addition to items routinely excluded from non-GAAP EBITDA, management excludes or adjusts each of the items identified below from the applicable non-GAAP financial measure referenced above for the reasons set forth with respect to that excluded item:
Foreign exchange loss/other expense. Other expense is excluded because foreign currency gains and losses and other non-operating expenses are expenditures that management does not consider part of ongoing operating results when assessing the performance of our business, and also because the total amount of the expense is partially outside of our control. Foreign currency gains and losses are based on global market factors which are unrelated to our performance during the period in which the gains and losses are recorded.
Stock-based compensation expense. Stock-based compensation expense is excluded because this is primarily a non-cash expenditure that management does not consider part of ongoing operating results when assessing the performance of our business, and also because the total amount of the expenditure is partially outside of our control because it is based on factors such as stock price, volatility, and interest rates, which may be unrelated to our performance during the period in which the expenses are incurred. Stock-based compensation expense includes cash-settled awards based on changes in the stock price.
Amortization of purchased intangible assets. Purchased intangible assets are amortized over their estimated useful lives and generally cannot be changed or influenced by management after the acquisition. Accordingly, this item is not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are recorded.
Contingent consideration. Contingent consideration represents the portion of consideration payable to the seller of some of our acquisitions, the amount of which is based on the achievement defined performance measures contained in the purchase agreements. Contingent consideration is adjusted to fair value at the end of each reporting period. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred.
Transaction costs. Transaction costs are upfront costs related to acquisitions and related transactions, such as brokerage fees, pre-acquisition accounting costs and legal fees, and other upfront costs related to specific transactions. Management believes that such expenses do not have a direct correlation to future business operations, and therefore, these costs are not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred.
Integration costs. Integration costs are severance payments for certain employees relating to our acquisitions and exit costs related to terminating leases and other contractual agreements. Accordingly, management believes that such expenses do not have a direct correlation to future business operations, and therefore, these costs are not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred.
Restructuring costs. Restructuring costs primarily consist of severance and separation costs associated with the optimization of the Company’s operations and profitability improvements. Management believes that such expenses do not have a direct correlation to future business operations, and therefore, these costs are not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred.
Free cash flow. Management believes that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating the Company’s financial performance. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net operating results as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. Additionally, the Company’s definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our condensed consolidated statements of cash flows.
