CareCloud Reports Q2 2026 Results: Full Earnings Call Transcript

On Thursday, CareCloud (NASDAQ: CCLD ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. This content is powered APIs. For comprehensive financial data and transcripts, visit Access the full call at Summary CareCloud Inc.

9 million for Q2 2026, marking the ninth consecutive quarter of positive GAAP net income. 3 million. CareCloud entered the healthcare compliance and audit defense market through the acquisition of Empower Healthcare and Compliance Partners. Recurring, technology-enabled business solutions represented 75% of revenue this quarter, reflecting a strategic shift towards subscription-based revenue.

The company reaffirmed its full-year 2026 guidance with expected revenue between $128 to $132 million and adjusted EBITDA of $29 to $31 million. Significant investment in AI development continues, with plans to launch AI-enabled compliance software solutions in the fall of 2026. Management highlighted progress in AI strategy, including new AI products and platform integrations, alongside ongoing cross-selling initiatives. The company expects a stronger financial performance in the second half of 2026, driven by expanded client relationships and reduced cost pressures from previous investments.

Full Transcript OPERATOR Greetings. Welcome to the CareCloud Inc. Second Quarter 2026 Results Conference Call. At this time, all participants are in a listen-only mode.

A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star-zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Brendan Covello, Corporate Counsel.

Thank you, Brendan. You may begin. Brendan Covello, Corporate Counsel Good morning, everyone. Welcome to CareCloud's second quarter 2026 conference call.

On today's call are Mahmoud Hawk, our Founder and Executive Chairman; Stephen Snyder, our Chief Executive Officer; A. Hadi Chaudhry, our Chief Strategy Officer; and Norman Roth, our Interim Chief Financial Officer and Corporate Controller. Before we begin, I would like to remind you that certain statements made during this call are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

All statements other than the statements of historical fact made during this call are forward-looking statements, including, without limitation, statements regarding our expectations and guidance for future financial statements and operational performance, expected growth, business outlook and potential, organic growth, and acquisition. Forward-looking statements may sometimes be identified with words such as will, may, expect, plan, anticipate, approximately, upcoming, believe, estimate, or similar terminology and the negative.

These forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. These statements reflect our opinions only as of the date of this presentation, and we undertake no obligation to revise these forward-looking statements in light of new information or future events.

Please refer to our press release and our reports filed with the Securities and Exchange Commission, where you will find a comprehensive discussion of our performance and factors that could cause actual results to differ materially from these forward-looking statements. For anyone who dialed into the call by telephone, you may want to download our second quarter 2026 earnings presentation. com. Click on News and Events, then click on Events, and under Second Quarter 2026 Results Conference Call, click on the Earnings Presentation to download.

Finally, on today's call we may refer to certain non-GAAP financial measures. Please refer to today's press release announcing our second quarter 2026 results for a reconciliation of these non-GAAP performance measures to our GAAP financial results. With that said, I'll now turn the call over to CEO Stephen Snyder. Stephen Snyder, Chief Executive Officer Thank you, Brandon, and good morning, everyone.

The second quarter reflected disciplined execution across our strategic priorities and another quarter of meaningful progress against our long-term plan. We delivered 16% revenue growth year over year, our ninth consecutive quarter of positive GAAP net income, completed the full redemption of our Series B preferred stock, and entered an entirely new market—healthcare compliance and audit defense—through our acquisition of Empower Healthcare and Compliance Partners.

This morning I'll take you through the quarter's results, the redemption of our Series B preferred stock, our entry into the compliance market, where we are taking the company, and the path to our full-year guidance. Let me start with the numbers for the second quarter. 4 million in the second quarter of last year. 2 million, up 15% year over year.

Just as important as our overall growth is the composition of that growth. Our recurring, technology-enabled business solutions represented approximately 75% of revenue this quarter, up from 69% a year ago. That continuing shift toward recurring, subscription-based revenue is foundational. 9 million.

Both are lower than the prior-year quarter for reasons that reflect investment strategy rather than margin erosion: amortization and integration costs from the acquisitions that are driving our growth; a more than doubling of our R&D expense as we accelerate AI development, with more of that work now expensed rather than capitalized; and new interest expense on the facility that retired our high-cost preferred stock. In each case, we traded near-term reported earnings for durable earnings power, and we expect that trade to begin paying off through the second half of the year.

Shifting our focus now to our capital structure, the recent retirement of our Series B preferred stock marked the most significant simplification of CareCloud's balance sheet since our IPO. On May 15, we redeemed 100% of our outstanding Series B preferred stock, funded through a $50 million credit facility with Citizens Bank and Provident Bank, with zero dilution to common shareholders. 3 million of annual preferred dividends and, with it, the preferred overhang that shaped our capital structure for many years. Let me take a moment to explain what this means for our financial results and, more importantly, for our shareholders moving forward.

4 million of preferred dividends. With the Series B fully redeemed, the substantial majority of that preferred dividend obligation is now permanently behind us. Beginning in the third quarter, more of every dollar of net income we generate flows through to our common shareholders, reduced only by the cost of the debt that replaced the preferred, which is meaningfully less costly. That structural shift, combined with our operating plan, is an important part of the earnings per share outlook we are reaffirming today.

So that's the balance sheet. Let me now turn to the business we're building on top of it, starting with our most recent acquisition. In May, we acquired Empower Healthcare and Compliance Partners, a full-service compliance and advisory firm founded by industry veteran Mitchell Bry, who joined us as president of Empower. The transaction was funded from operating cash flow and follows the same disciplined tuck-in playbook we have now executed more than 20 times since our IPO.

Empower takes CareCloud into an entirely new category—compliance, audit defense, and regulatory readiness—at precisely the moment demand for those services is accelerating. The providers we serve are contending with rising payer scrutiny and audit activity, industry-wide denial rates, expanding privacy and security obligations, and a new layer of governance questions raised by the very AI adoption now sweeping through healthcare. Compliance has moved from back-office checkbox to an operational priority. Empower gives our providers a trusted partner for all of it, delivered through the platform they already rely upon every day.

We saw that value proposition in action within a few weeks of closing. In June, Empower's certified coding and compliance team helped a wound care provider reverse more than a million dollars in alleged overpayments in a successful audit defense before a hearing and appeals board. That is the kind of concrete, high-stakes outcome that builds durable client relationships, and it is a story we can now tell across our entire client base. Looking ahead, we plan to launch AI-enabled compliance software solutions during the fall of 2026, converting Empower's expertise into a scalable, recurring revenue model.

This will include a tiered, subscription-based proactive compliance program driven by our AI-powered SaaS platform and supported by Empower's certified compliance professionals. It is the same motion we have run with every acquisition: acquire trusted capability, integrate that capability into our platform, and amplify it with AI. And that motion—acquire, integrate, amplify with AI—is a thread that runs through everything we're doing because our AI portfolio continues to scale. ADI will walk you through our AI progress in a moment.

What I'll offer here is the market context, because the environment is moving decisively in our direction. Industry surveys show that physician adoption of AI has more than doubled over the past three years, with administrative burden consistently ranked as the single largest opportunity for AI in medicine. At the same time, the pressures on provider economics—denial, staffing, documentation, regulatory complexity—are intensifying, not easing. Taken together, these secular trends reinforce our strategy and strengthen our confidence in the long-term opportunity for our solution.

An integrated platform that pairs AI with clinical, financial, and now compliance workflows allows providers to rely upon our solution as the one that they trust. Separately, it was a true pleasure to have the opportunity to spend time with many of you in person last quarter. For those who were not able to attend, in May we hosted our Analyst Day at the Nasdaq MarketSite and rang the Nasdaq closing bell, where we laid out four themes that define CareCloud: an AI-first operating model; second, a clean common stock story; third, compounding free cash flow; and, finally, a proven acquisition engine.

And in June, our shareholders overwhelmingly approved every proposal in our annual meeting. The second quarter was, in every respect, execution against these four themes. All that brings me to our outlook. We are reaffirming our full-year 2026 guidance of revenue of 128 to $132 million, adjusted EBITDA of 29 to $31 million, and GAAP earnings per share of 20 to 23 cents.

3 million in adjusted EBITDA in the first half, our guidance implies a meaningfully stronger second half. The shape of our plan is a first half weighted toward investment and integration and a second half that focuses on harvesting those investments.

The building blocks of that ramp are specific, and they are underway: continued growth in our recurring revenue base; the expansion of relationships with existing enterprise clients; expense management and integration initiatives designed to align our cost structure with our profitability objectives; and, on earnings per share specifically, the elimination of the Series B preferred dividend for the entire second half of the year.

As always, our expectations depend on the signing and continuation of certain client and vendor relationships, the anticipated timing and scope of client projects, and our timely execution of the integration and expense management initiatives that support these objectives. It is an important but demanding plan, and our team is working hard to deliver it. Before I hand it over to Hadi, let me step back and leave you with where we stand. The healthcare providers we serve are operating under enormous pressure—rising denials, workforce shortages, documentation burden, and a regulatory environment that grows more complex every year.

Every one of these pressures increases the value of what CareCloud delivers. We enter the second half of 2026 with more than 40,000 providers on our platform, nine consecutive quarters of GAAP profitability, the cleanest capital structure our company has had in a decade, and a growing recurring revenue base—in addition to that, an AI portfolio that is in market and scaling, and, with Empower, a foothold in one of the fastest growing needs in healthcare operations. The market opportunity in front of us is as large as it has ever been, and CareCloud is better positioned to capture it than at any point in time in our history.

With that, I'll turn the call over to Hadi Chaudhry, our Chief Strategy Officer, who will walk you through our AI strategy and product progress. A. Hadi Chaudhry, Chief Strategy Officer Thank you, Steve, and good morning, everyone. Last quarter I laid out our AI strategy across three tracks: using AI internally to do our existing work faster and at lower cost, embedding AI into the products our clients already use, and building new standalone AI products.

I'm pleased to report that we have made significant progress on all three, and I want to give you the substance behind that this morning. Let me start with our new AI products. Our AI Prior Authorization and AI-Assisted Medical Coding remain on track to bring to market this year. Both have continued to mature through the quarter.

Prior Authorization is moving through pilot deployments, and Coding continues to run internally as we refine it to the accuracy levels our clients expect. These are two of the most painful, most costly problems in healthcare administration, and we intend to meet the timeline we gave you on Stratus AI Front Desk. Our AI voice agent demand is strong, and we are continuing to sign new business with a new category like this. The work right now is in the implementation, and we are prioritizing getting each deployment right over maximizing the count—the depth-before-breadth approach I described last quarter.

Revenue is still in its early stages, but the product is performing in production, and we are building the operational foundation that turns these deployments into durable, recurring revenue. We will report that revenue as it scales. Now let me turn to our platform work because last quarter I made you some specific dated commitments, and I want to report against them directly. On our inpatient revenue cycle platform, we have completed the parity gaps between the legacy system and RCM Cloud on CareView.

The parity items we committed to for this quarter—bringing legacy CareView onto this modern platform—are complete. And on Wellsoft, we completed two integrations this quarter. Our Breeze patient experience layer and Serus AI nodes are both now live in the emergency department workflow. The Stratus AI integration follows next quarter, and the modernization of Wellsoft into a full cloud-based SaaS platform is on track to complete later this year.

The takeaway is simple: these were specific commitments, and we delivered them. We saw the same execution in Marketware, our physician relationship platform. This quarter we completed our flagship integration with PracticeMatch, added an integration with DocCafe, and launched a new candidate-facing portal that lets physicians and hospital staff apply and submit their credentials, degrees, experience, letters, licensure directly to the hiring manager. We also brought our AI candidate-matching engine live, turning Marketware from a relationship management tool into an AI-powered recruitment engine.

That was part of more than 20 enhancements delivered this quarter, with another 20-plus, including Workday and DocuSign integrations, underway for next quarter. I also want to flag something new that we are excited about. We are in active conversations with an existing private equity—based enterprise client about an AI-powered platform engagement. I will hold the details for now, but it's a strong validation of the capabilities we have built, and we will share the specifics as they materialize.

Finally, a word on where all this is heading. Our growth through acquisitions has over time left us running a number of independent platforms, each with its own backend. We have begun the work of consolidating them, moving towards a single modular platform on a shared backend with the common data and AI foundation underneath. In that model, a client simply turns on the modules they need—ambulatory, inpatient, revenue cycle, compliance, patient engagement—while everything runs on one foundation with one patient record and one place to bring our AI to bear.

I'm not going to put a timeline on the full journey today. This is a multi-year vision, and we will be disciplined about how we sequence it. But the direction is deliberate: fewer, stronger platforms built so that every new AI capability we create can be deployed everywhere at once.