0001493152-26-009872
SEC filingCareCloud, Inc. (CCLD) reported strong FY 2025 results with net revenue of $120.5M, up 9% YoY from $110.8M in 2024, driven by $10.5M from the Medsphere acquisition and growth in technology-enabled business solutions ($76.9M, 63% of revenue) and professional services ($25.4M). Operating income rose to $11.3M (9.4% margin) from $9.1M (8.2% margin), reflecting cost discipline amid 7% operating expense growth to $109.2M. Net income reached $10.8M, up from $7.9M, with EPS basic at $0.10 vs. $(0.28). Adjusted EBITDA improved 15% to $27.5M. Cash from operations hit $28.6M, funding $24.5M in investing (including $16.5M acquisitions) and $5.6M financing (Preferred dividends). Balance sheet shows $87.6M assets, $59.5M equity, low debt. Strategic focus on RCM, AI, and acquisitions positions CareCloud for healthcare IT growth amid market expansion, though offshore reliance and competition pose risks.
CareCloud delivered robust FY 2025 performance with net revenue of $120.5M, a 9% YoY increase from $110.8M in 2024. Key drivers included $10.5M from Medsphere acquisition and organic growth in RCM and professional services. Operating income climbed 24% to $11.3M (9.4% margin vs 8.2%), supported by 7% expense growth to $109.2M despite R&D up 69% to $6.4M. Net income surged 38% to $10.8M from $7.9M, with basic EPS $0.10 vs $(0.28). Adjusted EBITDA rose 15% to $27.5M. Providers grew to 45,000 across 2,900 practices. No goodwill impairment in 2025 vs $42M in 2023.
Revenue breakdown: technology-enabled business solutions $76.9M (63%, +4% YoY), professional services $25.4M (+40% YoY), medical practice management $13.9M (12%, -3% YoY), printing/mailing/group purchasing $4.3M. Growth fueled by Medsphere ($10.5M revenue) and 13% provider increase to 45,000. RCM remains core (percentage of collections), bundled with SaaS (EHR/PM). Customer renewal 91% (down from 95%). Serves 80 specialties in 50 states, low concentration risk. Offshore ops support scalability.
Direct costs $64.5M (53.5% of revenue, down from 54.9%), reflecting efficiencies. Selling/marketing fell 23% to $4.8M; G&A up 14% to $18.4M on headcount. R&D doubled to $6.4M for AI/cirrusAI. D&A $15.0M stable. Adjusted operating margin expanded to 12.2% from 10.3%. Restructuring $154K (vs $596K). Profitability aided by offshore labor (17% expenses, ~17% US cost), enabling competitive pricing.
Operating cash flow $28.6M (+38% YoY), driven by $10.8M net income + $15.2M D&A. Investing outflow $24.5M ($16.5M acquisitions, $4.8M PPE, $3.2M software). Financing $5.6M outflow (Preferred dividends $6.3M). Cash/restricted $3.6M (down from $5.1M); working capital $1.3M. Total assets $87.6M (up from $71.6M), liabilities $28.1M, equity $59.5M. No debt outstanding; line of credit unused. NOLs $271M federal.
Focus: cost reduction, profitability, positive FCF for Preferred dividends (resumed Feb 2025, arrears $6.8M). Strategies: enhance RCM/AI, organic growth, acquisitions (20+ since 2014), partner ecosystem. R&D on cirrusAI/Stratus. Employee count ~3,650, plan 2026 reductions. Risks: offshore disruptions, competition (athenahealth, R1 RCM), regulatory (HIPAA, AI), dividend sustainability if covenants breached.