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    CCLD
    Earnings call· Jun 2026(Q2 FY26)

    CareCloud Q2 FY26 earnings call CCLD

    Aug 6, 2026 Source

    Executive summary

    CareCloud Q2 FY26 — Strong Recurring Revenue Growth and Capital Structure Simplification

    CareCloud delivered strong Q2 FY26 results, marked by 16% revenue growth and a significant shift towards recurring technology-enabled solutions, now comprising 75% of revenue. The company simplified its capital structure by fully redeeming Series B preferred stock, reducing future dividend obligations. Strategic investments in AI and the acquisition of Empower Healthcare position CareCloud for continued growth and market expansion, with a focus on a stronger second half to meet full-year guidance.

    Highlights

    5

    • Revenue grew 16% year-over-year to $31.9 million.

    • Recurring technology-enabled business solutions increased to 75% of total revenue, up from 69% a year ago.

    • Completed full redemption of Series B preferred stock, eliminating $3.3 million in annual preferred dividends.

    • Achieved ninth consecutive quarter of GAAP profitability with GAAP net income of $1.1 million.

    • Acquired Empower Healthcare and Compliance Partners, entering the healthcare compliance market.

    Concerns

    4

    • GAAP net income ($1.1M) and adjusted EBITDA ($5.9M) were lower than prior year due to strategic investments in AI, integration costs, and new interest expense.

    • R&D expense more than doubled as the company accelerates AI development.

    • Adjusted net income of $2.4 million ($0.06 per share) was lower than $3.3 million ($0.07 per share) in the prior year.

    • Year-to-date adjusted EBITDA was $11.3 million, down from $12.1 million in the same period last year.

    Guidance & targets

    3
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $128 to $132 million
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $29 to $31 million
    high materiality
    High
    Full-year 2026 GAAP Earnings Per Share
    $0.20 to $0.23
    high materiality
    High

    Operational metrics

    20
    Revenue
    $31.9 millionup 16% YoY
    Q2 FY26

    Compared to $27.4 million in Q2 FY25. Driven primarily by the Medsphere acquisition.

    Revenue
    $63.2 millionup 15% YoY
    H1 FY26

    Compared to $55 million in H1 FY25.

    Recurring technology-enabled business solutions revenue
    75%up from 69% a year ago
    Q2 FY26

    Foundational shift towards subscription-based revenue. Recurring technology-enabled business solution revenue was $24 million, up approximately $5 million from Q2 FY25.

    Non-recurring project-based professional services revenue
    decreased approximately $1.5 millionYoY
    Q2 FY26

    From NetSR.

    GAAP Net Income
    $1.1 millionlower than prior year
    Q2 FY26

    Ninth consecutive quarter of GAAP profitability. Lower due to investments in AI, integration costs, and new interest expense.

    GAAP Net Income
    $2.0 millionlower than $4.9 million in H1 FY25
    H1 FY26

    Reflects investment phase.

    Adjusted EBITDA
    $5.9 millionlower than prior year
    Q2 FY26

    Lower due to investments in AI, integration costs, and new interest expense.

    Adjusted EBITDA
    $11.3 milliondown from $12.1 million in H1 FY25
    H1 FY26

    Reflects investment phase.

    R&D expense
    more than doubledYoY
    Q2 FY26

    Accelerating AI development, more work now expense rather than capitalized.

    Preferred dividend obligation (Series B)
    $3.3 millioneliminated
    annual

    Eliminated due to full redemption of Series B preferred stock.

    Preferred dividends paid
    $6.4 million
    H1 FY26

    Paid for Series B preferred stock.

    Preferred stock dividends deducted from EPS
    $941,000
    Q2 FY26

    Deducted from EPS calculation.

    Adjusted Net Income
    $2.4 millioncompared to $3.3 million in Q2 FY25
    Q2 FY26

    Calculated using end-of-period common shares outstanding.

    Adjusted EPS
    $0.06compared to $0.07 per share in Q2 FY25
    Q2 FY26

    Calculated using end-of-period common shares outstanding.

    Adjusted EPS
    $0.11
    H1 FY26

    Calculated using end-of-period common shares outstanding. Adjusted net income for H1 FY26 was $4.5 million.

    Cash and equivalents
    $13.4 million
    as of June 30, 2026

    Balance sheet remains well positioned.

    Net working capital
    $695,000
    as of June 30, 2026

    Balance sheet remains well positioned.

    Credit facility
    $50 million
    new

    With Citizens Bank and Provident Bank, used to fund Series B redemption.

    At-the-market (ATM) equity program
    $60 million
    established

    Provides additional capital to support future growth opportunities.

    Providers on platform
    40,000+
    current

    Entered H2 FY26 with this many providers.

    Industry KPIs

    5
    MetricValueDetails
    Free cash flow$5.7 millionUSD
    Adjusted EBITDA$5.9 millionUSD
    Healthcare client count40,000+providers
    Revenue adjusted EBITDA guidanceRevenue: $128-$132 million; Adjusted EBITDA: $29-$31 millionUSD
    Subscription recurring revenue growth75%% of total revenue

    Product announcements

    5
    ProductTypeDetails
    AI-enabled compliance software solutionslaunch
    AI prior authorization and AI assisted medical codingroadmap
    Stratus AI Front Desk (AI voice agent)update
    Wellsoft modernizationmilestone
    Marketware (physicians' relationship platform)update

    Deals & partnerships

    1
    Empower Healthcare and Compliance PartnersAcquisition of a full-service compliance and advisory firm.

    Acquired in May. Funded from operating cash flow. Takes CareCloud into healthcare compliance, audit defense, and regulatory readiness. Payment structure involved a minimal amount down (roughly 30% of trailing 12-month revenue) paid at closing, with the balance tied to Empower's growth and success in cross-selling initiatives.

    Risks & headwinds

    4
    Payer scrutiny and audit activityongoing

    rising payer scrutiny and audit activity, industry-wide denial rates

    Mitigation: Empower acquisition provides compliance and audit defense services.

    Expanding privacy and security obligationsongoing

    expanding privacy and security obligations

    Mitigation: Empower acquisition provides regulatory readiness services.

    Governance questions from AI adoption in healthcareongoing

    new layer of governance questions raised by the very AI adoption now sweeping through healthcare

    Mitigation: Empower acquisition provides compliance services for AI.

    Cyber security incidentQ1 FY26 (March 16th)

    March 16th incident affecting a single environment within CareCloud Health

    Mitigation: System fully restored same day, bad actor expelled, forensic analyses performed, notices being sent to impacted patients, insurance coverage expected to cover all costs. No material impact on operations or financial conditions expected.

    What to watch in Q3 FY26

    5

    Second-half revenue and EBITDA ramp

    H2 FY26
    CurrentH1 FY26 revenue $63.2M, Adjusted EBITDA $11.3M
    TargetAchieve full-year guidance of $128-$132M revenue and $29-$31M adjusted EBITDA, implying significantly stronger H2.

    Why it matters

    Critical for meeting full-year financial targets and demonstrating the payoff of H1 investments.

    With $63.2 million in revenue and $11.3 million in adjusted EBITDA in the first half, our guidance implies a meaningfully stronger second half.

    Q&A highlights

    6

    What factors will make H2 FY26 financially different/stronger than H1 FY26?

    Management expects a stronger H2 due to natural seasonality, continued growth from existing business expansion, Empower cross-selling, and benefits from H1 investments in MedSphere integration and AI development. Reduced amortization and expense management will also contribute.

    “the second half of the year, we expect to be much stronger than the first half of the year. Part of that is simply related to the natural seasonality that exists in our space.”

    asked by Alan Klee · answered by Steven Snyder

    2 min read5 chapters

    Detailed Narrative

    01

    AI Strategy and Product Progress

    CareCloud is advancing its AI strategy across three tracks: internal efficiency, embedding AI into existing products, and building new standalone AI products. AI prior authorization and AI-assisted medical coding are on track for market launch this year, with pilot deployments underway. Stratus AI Front Desk is seeing strong demand and is in early-stage production, with a focus on implementation to build a durable recurring revenue foundation.

    02

    Platform Modernization and Integration

    The company has completed parity gaps for its inpatient revenue cycle platform and CareVue, bringing legacy systems onto modern platforms. Wellsoft modernization to a full cloud-based SaaS platform is on track for completion later this year, with two integrations already live and a Stratis AI integration planned for next quarter. Marketware saw over 20 enhancements, including an AI candidate matching engine and new integrations, transforming it into an AI-powered recruitment engine.

    03

    Capital Structure Simplification

    CareCloud fully redeemed its Series B preferred stock on May 15th, funded by a new $50 million credit facility with Citizens Bank and Provident Bank. This action eliminates approximately $3.3 million in annual preferred dividends, significantly improving the flow-through of net income to common shareholders and simplifying the balance sheet. This structural shift is a key part of the reaffirmed EPS outlook.

    04

    Empower Healthcare Acquisition

    In May, CareCloud acquired Empower Healthcare and Compliance Partners, marking its entry into the healthcare compliance, audit defense, and regulatory readiness market. This tuck-in acquisition, funded by operating cash flow, integrates Empower's expertise into CareCloud's platform. The company plans to launch AI-enabled compliance software solutions in Fall 2026, converting Empower's expertise into a scalable recurring revenue model.

    05

    Long-term Platform Vision

    CareCloud is consolidating its independent platforms into a single, modular platform with a shared backend, common data, and AI fundamentals. This multi-year vision aims to create fewer, stronger platforms where new AI capabilities can be deployed universally. This unified foundation will support various modules like ambulatory, inpatient, revenue cycle, compliance, and patient engagement, all running on one patient record.

    AI-generated summary of the company’s earnings call. Not investment advice.