CCLD - Earnings call transcript Q2 2024

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Operator

Ladies and gentlemen, welcome to the CareCloud Second Quarter 2024 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I will now turn the call over to Kristelle. Thank you.

You may begin.

Unknown Executive

everyone. morning, Good Second CareCloud's Conference Call. Welcome Quarter to XXXX our our today's Executive Chairman, Executive are Norman Officer Controller. Officer Haq, call Mahmud Founder Roth, and Hadi President; Director; Snyder, and Chief Stephen Financial and On and our Interim Chaudhry, our Chief

as statements and made Before meaning expected performance, regarding to future you the of forward-looking of of Securities statements acquisitions. without XXXX, would Section amended. All that of for are other historical forward-looking growth XXXX, operational statements like conference of during statements, growth, Act than fact business Act and limitation, Exchange our of statements during guidance XXA Securities this call and are I expectations outlook Section as statements and this we certain begin, and remind made conference financial within XXE amended, organic the including, potential the

statements Forward-looking anticipate, words as negative plan, will, be expect, the and of may, estimate terminology with may sometimes similar terms. these believe, such upcoming, identified or

differ and and these could our Exchange release statements of will actual of and Forward-looking many from forward-looking statements a performance factors forward-looking and to cause materially of results information risks future new in you variety a and press events. contemplated reflect reports the beyond forward-looking of from not refer to to subject light cause revise uncertainties, comprehensive in guarantees find and we actual are date no statements. statements. these as to performance to that discussion of which control, which These where results undertake the obligation to are differ our would or future filed our opinions promises materially these statements our those Commission, of are Please or only this more Securities our presentation, with

then and For ir.carecloud.com, second the by our on earnings XXXX presentation. XXXX Conference Quarter download News Relations wish dialed on click our site, Investor the IR into click download calendar, Please click quarter telephone, Second presentation. anyone Events, call Results may to and you earnings visit Call who

refer measures. performances non-GAAP results financial our financial Finally, today's to reconciliation refer non-GAAP results. these our second call, today's we may release on GAAP to to announcing of quarter measures XXXX for press certain a Please

I'll With over Hadi? Hadi said, now turn that our CEO, call to the Chaudhry.

A. Chaudhry

professional Kristelle, you, joining very you Thank I'm XXXX direction, us down net facility flow on metrics second all lower pleased with call. income, we improved thanks our nonrecurring as to to are revenues, and even the free towards related services that to announce are enabling and year. corner date all the for this right our of cash strongly pay to earnings turning credit our our pivot moving in profitability in quarter million $X.X

a everyone on doing great Repaying hear debt Norm, to from generating more using stock. instead Steve each we step is and this will but for restart is our priority month You job able being key and to is last of our year. us preferred a a as the cash dividends cash about were

the first for of in this High-level focus remain focus will half a half. profitability expenses second and year, reducing has the on improving been and the

are have investors hear attention know to which about. to some waiting growth, We starting to been I turn

of generative provide deployed now an On about to AI I has on which been CirrusAI last of CirrusAI small pleased update a our of clients. subset I'm talked addition CareCloud notes. our call, new at progress called earnings Today, notes, product existing CareCloud the

producing time. The during of in Our patient capturing embedded clinical CareCloud have efficiency clinical CirrusAI and the has NB&TI documentation. and notes dialogue transcribing users accuracy reported precised in notes real significant at pilot proven interactions, technology, within improvements effective crucial

notes. of The explore time-saving and with transcription. our with part their these benefits users them fully users, been CareCloud initial workflows integration positive, has trial the to risk-free As XX-day the feedback allowing CirrusAI overwhelmingly existing real-time of seamless offered a we highlighting capabilities rollout with strategy, the of

After license This trial notes structure that the notes of completion of provider to care. the competitive fee and brings at period, value month. pricing provider per per reflects $XXX the available CareCloud CareCloud patient efficiency will CirrusAI be CirrusAI enhancing a

will their are gain that continue AI tangible practices We integrating confident this momentum more of offering as to operations. the benefits into recognize daily

revenues to moment, Even have of very though the recognize to in started to this begin X the significant XXXX. small as more number practices adoption growth operation. see it's value it increases we product We brings a quarter anticipate from and at the

used with X early our very are "I'm clinic. dictation One devices, medical commented, using providers adopters to of basic but we

and I to found trying make in I'm it. been that based codes trying very suggested CareCloud far, dictation. when nuances easier. encounter. our to it's for software out Instead on was me I talking way the still will so it chart, It are the tools puts to comes workload look to patient, everything this needs I'm learning automatically the where of amazing. enjoying AI be, to I'm it So information of efficient where go any should to figure as But add the program. this

are We care conclusion, time innovative notes. solutions CirrusAI through on like saving back lot we health committed the technology remain to CareCloud of a end." In AI advancing

and a driving broader our for expect continued and growth audience, value we adoption, CareCloud CirrusAI to we As shareholders. clients both notes anticipate

but let's on In medical opportunities. hospitals revenue practices our multiple including Now not unlock to we relationships, each line and With clients. solutions that our services, our offer us the base, of expand and stakeholders. value needs over evolving turn spans segments, comprehensive to of all significant proprietary have client uniquely tailored this our for both meet integrated strategic of cross-sell which quarter, stabilizes our allows growth continued diversity sizes. are enhance and driving diversified and our positioned our and products approach footprint retention market capitalize segment, attention streams, suite This within to top client long-term upsell to also growth. This we only revenue deepen

upsell the and doubled compared to last year. cross-sell from initiatives period have same [indiscernible]

recognized our a including bookings health CareCloud revenue see tremendous from remote QX, a higher recognize last XX% health monitoring, exceeding of issues from patients increase, within by in program, taken year. Most of revenue base. time this care this the costs It chronic XXX% client committed serious. this immediately. to are care these and providers $X the In who expect we for patient has We get time first simultaneously use care existing be control health recognized will program revenue patient value in management long derived to Wellness saw million identifying remarkable in revenue they than approximately quarter. upselling revenue that year-over-year XXXX is this expanding We And for recognize opportunity solution before and think in further a stream. and earlier more our our improve

our This us, strong have in year significant fortifying establishing for for we foundation a pivotal reached which during already the position marks milestones a financial and transition future.

free preferred Our primary focus crucial, down operating on covering for growing which dividends. only cash positive and paying also expenses, flow, remains our over but not eventually resuming line is credit

maintaining fully We these to and this are goals trajectory. have considerable towards made positive progress committed

shift look ahead driving XXXX, towards will focus our back we As growth. to

year-over-year revenue consistent is while increases, goal to Our enhancing deliver profitability.

fully fueled and our channels, sales, CareCloud expansion are new integrated growth solutions by program. be will including confident of the the cross-sell opportunities, We AI this Wellness upsell of continued multiple that and our innovation

our partnerships, leverage utilize solutions to we highly technology workforce. skilled our Additionally, white strategic and to players table plan enabling industry our our global

capitalize health to data aim care payers. health set we high-quality life sciences Finally, extensive providers on and companies, our care to support

our on strategy details growth earnings more share will We our during call. next

I the floor will Steve. Steve? now turn over to

Stephen Snyder

joining everyone, today's you, Good for morning, call. us thank and on

team, of $XX cash cost at which credit us dividends. which With eliminate increasing start entire of the a our balance achieving free line, the us accomplishing making flow, on we will transforming this of enable and goal As structure. we year our closer objective at transformation, great our are are million year, move this was progress to to resuming our the our

Our into and during margins as heavily further revenue been us to we've expand will revised cost growth structure XXXX beyond. position

annualized in-year million. the this have expect million cost of X a million our $XX savings, quarters, in expenses we savings. than identified to more Over Of to $XX in last XXXX reduction approximately $XX realize we

X-pronged these savings We a strategy. achieving are through

our enabling us and the technology, are in our control second, reduce we on third-party reliance a deploying contractors, manner; our that effective leveraging and at proprietary the while overall in-house and reducing the to we third, the contractor leaned cost process, First, us handle strength day-to-day costs, our bandwidth, business repeatable associated for also come further tasks more our core prior accomplishing cost-efficient model, relying effective our while with functions; systematic, fraction leveraging global to critical resource to parties while increase and enabling of each expertise our increasing we discrete risks small reduce third-party strategically costs, thereby business have to natural third both continued costs. into on have strategically a our of most of reducing simultaneously

been this has model. of In eliminating our cost summary, made of proprietary relationships third-party possible the and embracing use expensive CareCloud's for transformation technology, global our strength

half cash first we negative pleased to operations. XXXX, cash of significantly first the years. provided realize in flow the During we from from increase improved were depositors turned large income GAAP And net in our a X and time year-over-year free for

see decisive underway. transformation are actions beginning financial to and that to well are fruit, team's excited yield Our we is our

stock SEC. shareholders, a a footing as B control in special shareholders for right separate Series to a to a common terms change we with the approved, described equivalent in On more proxy communicated the our proxy exchange of event approval rights. and all to recommending stock preferred company preferred the Series A placed distributed the Series as protections certain materials fully of more stock. have before, If Series the holders would on A equal preferred dividend Further, of we filed the Series of be with of having shares, we will front, important changes that A have A the preferred similar

The to leading unambiguous. our initial date shared have proxy by been vote support changes. XX% response proposal been and of the preferred analyzed amendments. that vote advisory A firm favor for that the returned than has proxies shareholders Lewis, overwhelming and shareholders the has The been of of a Glass in More recommended Series

popular we to for like a level let proxy one, the support read of materials of shares, a take least proposal fragmented Therefore, we strong, vote and this need shareholders the given still Series been X/X base. challenge A encourage be retail even all to a time voices then of outstanding has heard. preferred at the While ownership affirmative their

our turn over Norm CFO, now Norm? floor to Roth. interim the I'll

Norman Roth

to talking flow, cash and for about welcome which all Thanks, I Steve, like and start for sure thank today. net news our call joining income I am GAAP our are you by would investors. positive

net GAAP since positive Second quarter XXXX. with income XXXX our of was first quarter

XX, from During the line June operations million $X.X profits $X.X We and were million and to the flows the on Valley of XX% X months generated of ended Silicon flow. cash as we XXXX, we cash to of today. Bank use repay able credit of cash generated of balance our free

X million more on January year X bringing As $X repaid XX, repaid our XXXX, we June of $X.X have today. we financial $X.X Since additional had the the balance of of This of from this much means XX, June to million, credit. million we January on million line flexibility. an balance $XX

million. revenues quarter, second the In we $XX.X of reported

of since due $X.X million business XXXX. softness we in we which of fluctuate. to is see the that hopeful year, project-based growth tends second will the down million to half decline that continuing, the SR services While a Med second some professional are half SR, of which had is but was year-over-year, last Med $X

and million $X for is in generated However, revenue X this XXXX. over first up year $X.X months for million quarter first this the by to CareCloud Wellness the time compared

costs continued to from nearly direct QX million they and down XXXX. are Our operating $X.X by decline,

expenses, R&D million. $XX and marketing decreased annual by these $X.X million Our operating On since an are down XXXX. basis, including G&A, already run expenses, and rate operating over expenses QX sales

million compares This GAAP operating common income declared they QX preferred per paid loss The $X.X net both GAAP and net of amount and of $X.XX during a whether In account which were based quarter. QX loss highest share the the to or reported quarter, was positive takes dividends $X.X on XXXX. GAAP into earned operating $X.X the million loss a of stock second million, attributable to during or net since shareholders, not the income million GAAP of $X.X GAAP loss the XXXX. net we

loss the little recorded though GAAP dividends whether on our paid. shown been This income requires these GAAP explanation. net reflects declared accumulate or only dividends, were or a common the dividends are Directors dividends has before not always the Even definition, Board of net balance per sheet, which and declared by calculation have by share monthly, that

quarter shares net reported year. the of million $X million for the per quarter highest income of period second $X.X calculated second adjusted since or Non-GAAP adjusted share, outstanding. last million common the in was We compared EBITDA This to XXXX XXXX. $X.X end-of-period same our in the is second EBITDA using quarter $X.XX the adjusted

of in XXXX. first X Of to the Med XXXX million for was was $X.X million months million $XX.X Revenue to first compared of million months the the SR. X $X.X decline, attributable $XX.X

not the GAAP to in dividends X or million income net X the share stock first loss a compared declared $X.X first This GAAP the of XXXX, loss but $X.X For months to net $X.XX of after was earned the subtracting million company's of XXXX. per preferred equates paid. months of a

first Non-GAAP EBITDA in million, was was for $X adjusted the of share. $X.X of or $X.X year. Year-to-date, income an adjusted last $XX.X period million million million the XXXX per same half net from increase $X.XX

June of million XXXX, our credit. As was line and we drawn $X.X working had XX, of cash. million of the capital $X on company had $XXX,XXX Net approximately

the an As previously stated, million XX, we $X.X to million line, June bringing the additional balance on today. since $X.X repaid

line This the are there we portions provide million credit, not liquidity considering need. would that in reducing with of the line on ample the fees cash company size the our Now the of save that is to dependent still unused the of SVB a on event is million. total the $XX $XX from line us credit of company

the quarter second returned for We're on to results year in The year. footing look good the and have put happy forward to a profitability us you ahead. to updating later

the over I'll remarks. Mahmud for call closing that, turn With to now his

Mahmud Haq

Thank you, Norm.

We achieved. are profitability great improvement very have that in we pleased with the

value our their would for on long-term employees, to shareholders. thank support customers I like mission. shareholders primary and Our focus in CareCloud's creating is our for continuous our furthering

open for floor questions. the please Operator,

Operator

question Ladenburg first is Instructions] [Operator Cohen The Thalmann. with from Jeffrey

Destiny Buch

is just Maybe what what your had percentage now now on around your for Jeff. operations wondering is contractors? is questions. I'll comments in-house? I'm through This Destiny few contractors percentage I in-house. versus quick with a start of And And

A. Chaudhry

it And the just a turn to Thank you question. clarification Steve. little for then I over

by side, CareCloud when about the So now. were us CareCloud we X specific being was which X very that of part talk -- the acquisition there or it were did, contractors on used IT contractors the we that's

side RCM it's contractors, time not the our usual workforce. of transition side very using the which So any areas were we on thing. us at some the to to which niche There operational, more a specific for the technology took little were development than

So number by you sure or any have any in do if terms not chance or Norm, contract I'm Steve, that have specific percent, the any Steve if -- for but you of percent?

Stephen Snyder

number, specific There's work our is a majority contractors. being overwhelming performed, the employees. Not Destiny, but by performed of a the minute being that's portion really by performed

that and spoke different acquisitions. America and variety India, in of an South contractors America some some us a subcontractors, really were in from really, said, were about from X we helping perspective, R&D Hadi the Central as they a that And holdover prior were

reduce So that as moving also the have spend, and in-house about to experts, expense forward really able analyze roughly that we by move reducing conclusion over long candidly we XX%, control we work which being that we're term off would to overall XX% performed. particular be to we expense, much and that our better by greater came

around. So the really all a positive way

Destiny Buch

efforts of to of partners industry potential are XXXX. Or into largely Okay. the around kind like makes Is well, there as especially And also partners, inbound? you Yes, that commentary I'd interest finding move outbound also that Got sense. are -- way? kind it. your then to moving

A. Chaudhry

both. It's Destiny. question, Great

So who one already channel have is we partners work multiple we with.

Force So they for as as let's CareCloud are example. resellers say, or, either us acting an for our

are there number leverage employees. a our who of partners So these

more we'll -- an for for investment is there be finding outreach So more the based an additional spending partners. on and interest then campaigns, marketing inbound different doing towards some expansion

Destiny Buch

pipeline. value think, your it. on provide you you've of remember And I historically, number able Got if of kind Okay. correctly, the a Are then those us I numbers? given to

A. Chaudhry

Yes.

bookings. have I forward the removed. about going if pipeline, those But now, and right we number It think think to the being in of you just what recognized number we the revenue, about XX and continuously that what the to focused generate are million-plus removed able tried on is So keeps thing we -- more but the actual do -- is adding this evolving. pipeline, keeps out revenue

the and the And not is But zoom about does cross-sell and from perspective. include you logos million from growing. just about opportunities. all way think over if XX-plus the This think new we the possible out upsell the

exists client So there's a in base. our tremendous opportunity that existing

And on expect that's year. from that upsell cross-sell, last the year basis, what mentioned than half last same year, the to time first booking. of year XX% numbers we it's year-to-date revenue compared this the of is to same The higher time. doubled be to the almost booking even from -- XX I the the revenue year this recognized And recognized be

So count too on pipeline I won't that much number.

more if think the revenue at look the that's growth where revenue it I would perspective, to. recognized we perspective, focus I give from

Destiny Buch

Okay.

Okay. the and call initial I -- a CirrusAI early don't and learnings to talk Got what the be on some of the then the size it areas based feedback, would would you of next? what adopter What And are want beta And the users. deploy AI when about is users? like launch, size those you it. but -- your

A. Chaudhry

Sure.

-- do are for moment -- to And hundred, in couple -- initial terms risk-free mentioned, say, as rail the XX for the I declines the days at the would pushed they couple and trial. a existing the dozen And value some of to of it have we its still and have users, we have work who convincing so the AI the I our we up adoption. signed for interest

front-end products this dialogue was X the One basically convert between which product patients guide, recommends from a perspective. to the basically was Sirios, chart. into which diagnosis launched doctor the We other and that procedure and SAI the and that listened and

So one and going both next recently are of actually worlds. that just that's is best which at the on also the we to product providers, is, least provide what next rolled working of to the out we the --

to CirrusAI recommended listen converted to then similar the cohort. into and conversation will it that's gets So notes, that the conversation,

just to the true together applications the to we X provide merge tried So value.

you So a to historical patient talking each then just only codes. but procedure the in and based diagnosis convert extract suggested same prior if dialogue think it, on chart, the information doctor at plans, care about the other, and social and the history time, recommends and it the also, not their the

it that's already we So the updated version. basis. on of to who provider roll who same just clients started use set first to will sign up notes, started to next who is test that first new will that have our the be our our will for user base be The this have out CareCloud

Destiny Buch

one right. that sounds your any one, is kind Okay. promise. M&A? of I fit that the Got it. strategy last like And in organic. of All It XXXX? be to dedicated then there into How is But part going most is to of does strategy growth growth M&A

Stephen Snyder

question, Destiny. Good

majority our of that before. in will we come XXXX, customers overall we you growth from wallet As the into existing mentioned share we then full think growth through and partnerships, growth existing expanding of mode think pivot the about which as

opportunity helps relationships, today, like. be have, have other to like we and those augment companies, primarily into sell So existing course partnerships, CCM which with the their billing them solutions but like and to we force, medical able the things XX relationships, reseller about

partnerships of also and able existing partnerships to billing those terms roughly and billing in companies take There U.S. So expand to partnerships develop are other primarily. X,XXX the with in other being those companies

profitable. able we them they opportunity their in our to force with software augmentation to enable a space with be of be be to increasingly become them grow to reseller significant them our and So think can also there's partner so able that a and to empower then to

opportunity to question we we of really this really in billing of leverage see within actually to that, really them maybe your we team acquisitions, acquisitions, to a of their the to our benefits particular quasi not to -- in current a perspective, such traditional respects, in do To regard within revolutionize way mean construct acquisitions, acquisition engage our with the in a engage doing of revenue to current cash enable flow area, kind of but the -- though, software the a this from purchase by stock. kind partnership, traditional some provide company kind see and have which perspective to business their from tradition partnership I and model without in many

cash year we're unfolds, of but committed be, then So really us and expand we'll pursue in first progresses. on to our And we flow allows flow. see as can foremost, concentrated cash the expand free growth to really to to a the any that year of as continuing continue opportunities manner will that sort

Operator

The with from Group. next Allen question Maxim is Klee

Allen Klee

Can Yes. continued mentioned on we Med execution. SR? You Great softness. start

growth to around? Or that maybe the second it half. use of hope see state to some you turn competitive Some in do market not there? where potential things the for the allowed are the you? environment Is parties the What's

A. Chaudhry

Allen. you, Thank

right. So you're

think is least by all stakeholder one be market continue know, and rest industry of X the still I or as X the of the to other dominated we the between vendors. shares system, the next at health

the to and And market. vendors. started try the do that the one, with still years. into we of When other market was it expand in the only X completely piece to to a relationship overall can for the and last and we for since business stopped for the player work to earn first dominated market, that continue we the small third we So offered comes us the industry have smaller the the second that share services could it

work. and projects are track on to some time realistically signed is back in because getting already the going So take

project sign is and by up going who before that. the new can earn revenue, the we we months us someone it's to time to recognize start even to looking couple a take a So of started get

can But can these, SR we solutions, overall, it's we or whether and solutions grow and upsell how MeriSR is how technology-enabled that which AI-based our we cross-sell tools space, an into into bigger leverage our picture some continue of think for that tools BI to space. or Med RCM

we -- So the marketing and order. second will towards continue third we and to the continue push first the is thing our And to that. largest after continue expanding relationship the second to the

Allen Klee

And then you had billing? positive commentary expanding on it patients customers remote patient the -- existing monitoring up as they're wellness to like get overall. and How compliant customers? just is set -- is of where number that growing from with longer it get Or also takes

A. Chaudhry

a [indiscernible] both. for care this next-generation an combination launched management. Great. And years evolved care the over started monitoring, X it's management years remote and example, so actually, chronic X.X last and platform into we we for more patient the years, recently, the now now, then we roughly now And -- have chronic X patient the as monitoring of as

So now engage to we instead of Mayers other started just the patient the patient. calling to leverage

text fill patient to calling click type patient them also we're sending of So sending our can engage video, it the text the then to on time e-mails, forms in care addition messages, and now them through the has the and different which the training involved. up managers trying them get whenever the messages, through

approaching are the we patients. So to trying engage we the and way overall improved have

adoption us. have clients one, existing the this secondly, started even already the it And increase who doing existing chronic the to sales patient existing in our existing yes, base care from our expanding service management client base. the client So from -- will, the new take

the do this we secondary external new to the of terms becomes a those but nature. In to try clients, logos, pitch

the also always this With management for monitoring remote and to a the for hope the we solution, care SaaS us, management we would chronic that can of solution overall try RCM in and chronic part to our the Because this services offer provide plus help more be patient patient and up full the then monitoring technology-enabled of best sign care being customer it. sign end-to-end for service. thing one up

Allen Klee

Or How makers? about the could you broader? talk of Do little it do going thinking sales Last infrastructure from is you CareCloud you that? feel decision you relatively competitive CirrusAI. a market you question about a how how customers -- it to you how that? to on -- small of the And you're would amount have do feel affecting do expanding approach about

A. Chaudhry

Yes.

and similar -- about companies days days challenge the say, the on on. think their XX for AI the So before, if until are you results, focusing other first it, refining let's to XX last our

and own plus help use AI we to tried how other with we players, Google our So leveraged by provided own already the partnership data, LLMs using the can our whether of it's technology, other or either through the leverage data or Google players.

over the XX existing the then days finally, to able out last the to -- to push base. So we applications. client in we kept on it And was our refining XX

service We XX,XXX opportunity the existing have, clients. work any BI with client our Similar best including and the to solution other and base. with exists offering the practices we solution X,XXX-plus providers,

into existing the client there's that expand to think tremendous base. I opportunity exists So a

direct practice the same improving e-mail ChatGPT, But use So part existing minutes. When AI driver. X the can how because becoming X their say, the let's think workflows, written to that, revenue be to line can AI of one, I addition is seconds now is you in, -- workflows. top compared the and save the in same time

collection direct but on the will workflow help the driving the but fee, revenue of increase. that be of since So improve will our the revenue overall And will client. charge the you not -- our it's them most revenue, clients, we

when existing there to service can and of the is the of it, competitive AI But improve the out system, solution market our So yes, an to this the EHR us, existing out trying a about AI going take client and solutions solutions. workflow. answer to the for think up you question, sign if there The part part go as you is existing out for example. sell transcription service become the

of separate running one platform. fully is us there. and to one not the to into think might when that differentiation we competitors where need our have independently they this their existing solution out you compare So integrated

Operator

to further conference [Operator As would like there now Norman questions, the Roth Instructions] hand remarks. I are no for over closing to

Norman Roth

Thank Have great conference a our attending you, everyone, for day. today.

Operator

today's concludes This you. teleconference. Thank

disconnect for time. your this Thank may lines You at you your participation.

CareCloud (CCLD) 13 Aug 242024 Q2 Earnings call transcript