CareCloud Reports Second Quarter 2026 Results
Rhea-AI Summary
CareCloud (Nasdaq: CCLD) reported Q2 2026 revenue of $31.9 million, up 16% from $27.4 million in Q2 2025, and GAAP net income of $1.1 million, down from $2.9 million. GAAP EPS was $0.00 versus $0.04, and adjusted EBITDA was $5.9 million versus $6.5 million.
Year-to-date 2026 revenue reached $63.2 million (vs. $55.0 million), with GAAP net income of $2.0 million (vs. $4.9 million) and adjusted EBITDA of $11.3 million (vs. $12.1 million). The company completed the acquisition of Empower Healthcare & Compliance Partners, marking entry into the compliance and audit-defense market, and fully redeemed all Series B Preferred Stock on May 15, 2026.
CareCloud generated $10.7 million of operating cash flow in the first half, ended June with $13.4 million in cash, and reaffirmed its full-year 2026 guidance: revenue of $128–$132 million, adjusted EBITDA of $29–$31 million, and GAAP EPS of $0.20–$0.23.
Positive
- Revenue +16% YoY to $31.9 million in Q2 2026
- Year-to-date revenue up to $63.2 million from $55.0 million
- Ninth consecutive quarter of positive GAAP net income
- Operating cash flow of $10.7 million in first half 2026
- Cash balance increased to $13.4 million from $3.1 million year-end
- 2026 guidance reaffirmed: revenue $128–$132m, adjusted EBITDA $29–$31m, EPS $0.20–$0.23
Negative
- GAAP net income down to $1.1 million from $2.9 million in Q2 2025
- Adjusted EBITDA lower at $5.9 million vs. $6.5 million in Q2 2025
- Net income attributable to common fell to $0.2 million from $1.5 million in Q2 2025
- Interest expense surged to $0.8 million from $0.1 million in Q2 2025
- Total liabilities rose to $76.4 million from $28.1 million at year-end 2025
- Operating cash flow for first half declined to $10.7 million from $12.5 million
Market reaction after 2Q26 earnings report: CCLD -10.63%
Following this news, CCLD has declined 10.63%, reflecting a significant negative market reaction. Our momentum scanner has triggered 8 alerts so far, indicating moderate trading interest and price volatility. The stock is currently trading at $2.27.
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Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 07 | Q1 earnings report | Positive | -17.4% | Revenue growth, positive income, guidance reaffirmation, and financing updates preceded selloff. |
| Nov 06 | Q3 earnings report | Positive | +17.6% | Raised revenue guidance, earnings growth, acquisition progress, and reduced borrowings accompanied gains. |
| Aug 05 | Q2 earnings report | Positive | +0.0% | Positive EPS, net income growth, AI initiatives, and reaffirmed guidance produced no change. |
| Jul 10 | Index inclusion | Positive | +0.8% | Russell Microcap inclusion, acquisition activity, and cash strength accompanied quarterly stock gains. |
| Jul 02 | Index inclusion | Positive | +7.9% | Index inclusion, AI initiatives, acquisitions, and cash position accompanied reported stock appreciation. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Tag-specific earnings events showed mixed reactions, including one substantial negative divergence despite positive reported results.
Key Terms
gaap financial
adjusted ebitda financial
revenue cycle management technical
restricted cash financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Revenue Grows
SOMERSET, N.J., Aug. 06, 2026 (GLOBE NEWSWIRE) -- CareCloud, Inc. (Nasdaq: CCLD), a leader in AI-powered healthcare technology and revenue cycle management solutions for medical practices and health systems nationwide, today announced financial results for the quarter ended June 30, 2026 and reaffirmed its full-year guidance.
Second Quarter 2026 Financial Highlights:
- Revenue of
$31.9 million , compared to$27.4 million in Q2 2025 - GAAP net income of
$1.1 million , compared to$2.9 million in Q2 2025 - GAAP EPS of
$0.00 per share, compared to$0.04 per share in Q2 2025 - Adjusted EBITDA of
$5.9 million , compared to$6.5 million in Q2 2025
Year-to-date 2026 Highlights:
- Revenue of
$63.2 million , compared to$55.0 million in the same period last year - GAAP net income of
$2.0 million , compared to$4.9 million in the same period last year - GAAP EPS of (
$0.01) per share, compared to$0.02 per share in the same period last year - Adjusted EBITDA of
$11.3 million , compared to$12.1 million in the same period last year
Key Second Quarter Accomplishments:
- Compliance and Audit-Defense Market Entry: Expanded the product portfolio through the acquisition of Empower Healthcare & Compliance Partners, opening a new growth opportunity by bringing trusted compliance, audit-defense, and regulatory expertise to CareCloud's network of more than 40,000 providers.
- Full Redemption of Series B Preferred Stock: Completed the redemption of all outstanding Series B Preferred Stock on May 15, 2026.
- Sustained Profitability: Delivered the ninth consecutive quarter of positive GAAP net income.
Management Commentary
“This quarter we grew revenue
“Our AI and acquisition strategies have become a single, unified growth engine. Every platform we bring into CareCloud becomes smarter, faster, and more valuable when we layer in our AI capabilities. We are still in the early innings of unlocking the cross-sell potential across our expanded client base, and we are increasingly seeing customers adopt our AI-enabled offerings.” — A. Hadi Chaudhry, Chief Strategy Officer, CareCloud
"As expected, profitability this quarter reflects deliberate investments we are making today — increased R&D spending on our AI-enabled capabilities and increased interest expense from simplifying our capital structure through the Series B redemption — that we believe will deliver returns over time. We expect these investments to enhance scalability, improve operational efficiency, and support long-term margin expansion." — Norman Roth, Interim Chief Financial Officer and Corporate Controller, CareCloud
2026 Outlook
The Company is reaffirming its guidance for calendar year 2026.
| For the Fiscal Year Ending December 31, 2026 | Full Year 2026 Guidance |
| Revenue | |
| Adjusted EBITDA | |
| GAAP Net Income Per Share (EPS) |
Our expectations regarding future profitability, including adjusted EBITDA and earnings-per-share guidance, are based on management’s current beliefs and assumptions regarding, among other things, the signing and continuation of certain client and vendor relationships, the anticipated timing and scope of client projects, and our timely execution of integration and expense-management initiatives intended to align our cost structure with those objectives.
Conference Call Information
CareCloud management will host a live conference call today, August 6, 2026, at 8:30 a.m. Eastern Time to discuss second quarter 2026 results and the Company’s 2026 strategy.
Webcast: ir.carecloud.com/events
Dial-in (Audio Only): 201-389-0920 | Reference: “CareCloud, Inc. Second Quarter 2026 Results Conference Call.”
Replay Dial-in: 412-317-6671 | Access Code: 13761329 (available approximately 3 hours after the call).
About CareCloud
CareCloud brings disciplined innovation to the business of healthcare. Our suite of AI and technology-enabled solutions helps clients increase financial and operational performance, streamline clinical workflows and improve the patient experience. More than 40,000 providers count on CareCloud to help them improve patient care, while reducing administrative burdens and operating costs. Learn more about our products and services, including revenue cycle management (RCM), practice management (PM), electronic health records (EHR), business intelligence, patient experience management (PXM) and digital health, at carecloud.com.
Follow CareCloud on LinkedIn, X and Facebook.
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: Norman Roth Interim Chief Financial Officer and Corporate Controller CareCloud, Inc. nroth@carecloud.com | Investor Contact: Stephen Snyder Chief Executive Officer CareCloud, Inc. 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 U.S. Private Securities Litigation Reform Act of 1995. These statements relate to anticipated future events, future results of operations or future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “shall,” “should,” “could,” “intends,” “expects,” “plans,” “goals,” “projects,” “anticipates,” “believes,” “seeks,” “estimates,” “forecasts,” “predicts,” “possible,” “potential,” “target,” or “continue” or the negative of these terms or other comparable terminology.
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, the impact of pandemics on our financial performance and business activities 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.
| CARECLOUD, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| AS OF JUNE 30, 2026 AND DECEMBER 31, 2025 | ||||||||
| ($ in thousands, except share and per share amounts) | ||||||||
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 13,395 | $ | 3,117 | ||||
| Restricted cash | - | 500 | ||||||
| Accounts receivable - net | 14,117 | 15,062 | ||||||
| Contract asset | 3,426 | 3,664 | ||||||
| Inventory | 471 | 507 | ||||||
| Current assets - related party | 16 | 16 | ||||||
| Prepaid expenses and other current assets | 2,758 | 2,872 | ||||||
| Total current assets | 34,183 | 25,738 | ||||||
| Property and equipment - net | 7,259 | 7,775 | ||||||
| Operating lease right-of-use assets | 4,864 | 3,106 | ||||||
| Intangible assets - net | 14,929 | 18,968 | ||||||
| Goodwill | 31,835 | 31,442 | ||||||
| Other assets | 779 | 569 | ||||||
| TOTAL ASSETS | $ | 93,849 | $ | 87,598 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 6,071 | $ | 6,937 | ||||
| Accrued compensation | 3,846 | 4,136 | ||||||
| Accrued expenses | 5,943 | 5,970 | ||||||
| Operating lease liability (current portion) | 1,573 | 927 | ||||||
| Deferred revenue (current portion) | 4,507 | 4,148 | ||||||
| Term loans and other (current portion) | 10,756 | 728 | ||||||
| Contingent consideration (current portion) | 400 | 909 | ||||||
| Dividend payable | 392 | 668 | ||||||
| Total current liabilities | 33,488 | 24,423 | ||||||
| Term loans and other | 29,223 | 441 | ||||||
| Borrowings under line of credit | 9,000 | - | ||||||
| Contingent consideration | 290 | 232 | ||||||
| Operating lease liability | 3,462 | 2,187 | ||||||
| Deferred revenue | 934 | 809 | ||||||
| Deferred tax liability | 50 | - | ||||||
| Total liabilities | 76,447 | 28,092 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| SHAREHOLDERS' EQUITY: | ||||||||
| Preferred stock, | 1 | 2 | ||||||
| Common stock, | 43 | 43 | ||||||
| Additional paid-in capital | 75,735 | 119,936 | ||||||
| Accumulated deficit | (53,788 | ) | (55,832 | ) | ||||
| Accumulated other comprehensive loss | (3,927 | ) | (3,981 | ) | ||||
| Less: 740,799 common shares held in treasury, at cost at June 30, 2026 and December 31, 2025 | (662 | ) | (662 | ) | ||||
| Total shareholders' equity | 17,402 | 59,506 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 93,849 | $ | 87,598 | ||||
| CARECLOUD, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||||||||
| FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025 | ||||||||||||||||
| ($ in thousands, except share and per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| NET REVENUE | $ | 31,880 | $ | 27,377 | $ | 63,150 | $ | 55,009 | ||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Direct operating costs | 17,457 | 14,480 | 34,307 | 29,944 | ||||||||||||
| Selling and marketing | 1,300 | 1,118 | 2,714 | 2,249 | ||||||||||||
| General and administrative | 5,370 | 4,358 | 10,866 | 8,690 | ||||||||||||
| Research and development | 2,194 | 1,020 | 4,610 | 2,255 | ||||||||||||
| Change in contingent consideration | (34 | ) | - | 23 | - | |||||||||||
| Depreciation and amortization | 3,731 | 3,382 | 7,768 | 6,719 | ||||||||||||
| Restructuring costs | - | 23 | - | 137 | ||||||||||||
| Total operating expenses | 30,018 | 24,381 | 60,288 | 49,994 | ||||||||||||
| OPERATING INCOME | 1,862 | 2,996 | 2,862 | 5,015 | ||||||||||||
| OTHER: | ||||||||||||||||
| Interest income | 73 | 51 | 83 | 93 | ||||||||||||
| Interest expense | (815 | ) | (68 | ) | (873 | ) | (126 | ) | ||||||||
| Other income (expense) - net | 104 | (35 | ) | 126 | (49 | ) | ||||||||||
| INCOME BEFORE PROVISION FOR INCOME TAXES | 1,224 | 2,944 | 2,198 | 4,933 | ||||||||||||
| Income tax provision | 102 | 42 | 154 | 83 | ||||||||||||
| NET INCOME | $ | 1,122 | $ | 2,902 | $ | 2,044 | $ | 4,850 | ||||||||
| Preferred stock dividend | 941 | 1,365 | 2,306 | 4,176 | ||||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 181 | $ | 1,537 | $ | (262 | ) | $ | 674 | |||||||
| Net income (loss) per common share: basic and diluted | $ | 0.00 | $ | 0.04 | $ | (0.01 | ) | $ | 0.02 | |||||||
| Weighted-average common shares used to compute basic and diluted loss per share | 42,493,449 | 42,321,629 | 42,482,758 | 33,118,912 | ||||||||||||
| CARECLOUD, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
| FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025 | ||||||||
| ($ in thousands) | ||||||||
| 2026 | 2025 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 2,044 | $ | 4,850 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 7,858 | 6,855 | ||||||
| Lease amortization | 896 | 901 | ||||||
| Provision for expected credit losses | 118 | 169 | ||||||
| Provision for deferred income taxes | 50 | - | ||||||
| Foreign exchange loss | 15 | 1 | ||||||
| Interest accretion | 208 | 219 | ||||||
| Change in contingent consideration | 23 | - | ||||||
| Stock-based compensation expense | 128 | 219 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 827 | (958 | ) | |||||
| Contract asset | 238 | 411 | ||||||
| Inventory | 36 | 51 | ||||||
| Other assets | 73 | (838 | ) | |||||
| Accounts payable and other liabilities | (2,146 | ) | 377 | |||||
| Deferred revenue | 316 | 264 | ||||||
| Net cash provided by operating activities | 10,684 | 12,521 | ||||||
| INVESTING ACTIVITIES: | ||||||||
| Purchases of property and equipment | (937 | ) | (1,786 | ) | ||||
| Capitalized software and other intangible assets | (1,620 | ) | (1,677 | ) | ||||
| Payment for acquisitions | (681 | ) | (40 | ) | ||||
| Net cash used in investing activities | (3,238 | ) | (3,503 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Preferred stock dividends paid | (6,436 | ) | (3,317 | ) | ||||
| Payment of contingent consideration | (618 | ) | - | |||||
| Payment of tax withholding on stock issued to employees | (1 | ) | (22 | ) | ||||
| Proceeds from term loan | 39,739 | - | ||||||
| Repayments of notes payable and term loan | (1,191 | ) | (355 | ) | ||||
| Redemption of Series B Preferred Stock | (38,169 | ) | - | |||||
| Proceeds from line of credit | 9,000 | - | ||||||
| Net cash provided by (used in) financing activities | 2,324 | (3,694 | ) | |||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND RESTRICTED CASH | 8 | (29 | ) | |||||
| NET INCREASE IN CASH AND RESTRICTED CASH | 9,778 | 5,295 | ||||||
| CASH AND RESTRICTED CASH - Beginning of the period | 3,617 | 5,145 | ||||||
| CASH - End of the period | $ | 13,395 | $ | 10,440 | ||||
| SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Conversion of Series A Preferred Stock and accrued dividends to common stock | $ | - | $ | 2,435 | ||||
| Dividends declared, not paid | $ | 392 | $ | 714 | ||||
| SUPPLEMENTAL INFORMATION - Cash paid during the period for: | ||||||||
| Income taxes | $ | 158 | $ | 144 | ||||
| Interest | $ | 517 | $ | 44 | ||||
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 the United States of America (“GAAP”). An explanation of these measures is also included below under the heading “Explanation of Non-GAAP Financial Measures.”
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 June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| ($ in thousands) | ||||||||||||||||
| Net revenue | $ | 31,880 | $ | 27,377 | $ | 63,150 | $ | 55,009 | ||||||||
| GAAP net income | 1,122 | 2,902 | 2,044 | 4,850 | ||||||||||||
| Provision for income taxes | 102 | 42 | 154 | 83 | ||||||||||||
| Net interest expense | 742 | 17 | 790 | 33 | ||||||||||||
| Foreign exchange loss / other expense | 54 | 41 | 86 | 60 | ||||||||||||
| Stock-based compensation expense | 64 | 111 | 128 | 219 | ||||||||||||
| Depreciation and amortization | 3,731 | 3,382 | 7,768 | 6,719 | ||||||||||||
| Change in contingent consideration | (34 | ) | - | 23 | - | |||||||||||
| Transaction and integration costs | 166 | 11 | 324 | 23 | ||||||||||||
| Restructuring costs | - | 23 | - | 137 | ||||||||||||
| Adjusted EBITDA | $ | 5,947 | $ | 6,529 | $ | 11,317 | $ | 12,124 | ||||||||
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 June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| ($ in thousands) | ||||||||||||||||
| Net revenue | $ | 31,880 | $ | 27,377 | $ | 63,150 | $ | 55,009 | ||||||||
| GAAP net income | 1,122 | 2,902 | 2,044 | 4,850 | ||||||||||||
| Provision for income taxes | 102 | 42 | 154 | 83 | ||||||||||||
| Net interest expense | 742 | 17 | 790 | 33 | ||||||||||||
| Other (income) expense - net | (104 | ) | 35 | (126 | ) | 49 | ||||||||||
| GAAP operating income | 1,862 | 2,996 | 2,862 | 5,015 | ||||||||||||
| GAAP operating margin | 5.8 | % | 10.9 | % | 4.5 | % | 9.1 | % | ||||||||
| Stock-based compensation expense | 64 | 111 | 128 | 219 | ||||||||||||
| Amortization of purchased intangible assets | 945 | 193 | 1,873 | 282 | ||||||||||||
| Transaction and integration costs | 166 | 11 | 324 | 23 | ||||||||||||
| Change in contingent consideration | (34 | ) | - | 23 | - | |||||||||||
| Restructuring costs | - | 23 | - | 137 | ||||||||||||
| Non-GAAP adjusted operating income | $ | 3,003 | $ | 3,334 | $ | 5,210 | $ | 5,676 | ||||||||
| Non-GAAP adjusted operating margin | 9.4 | % | 12.2 | % | 8.3 | % | 10.3 | % | ||||||||
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 June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| ($ in thousands ) | ||||||||||||||||
| GAAP net income | $ | 1,122 | $ | 2,902 | $ | 2,044 | $ | 4,850 | ||||||||
| Foreign exchange loss / other expense | 54 | 41 | 86 | 60 | ||||||||||||
| Stock-based compensation expense | 64 | 111 | 128 | 219 | ||||||||||||
| Amortization of purchased intangible assets | 945 | 193 | 1,873 | 282 | ||||||||||||
| Transaction and integration costs | 166 | 11 | 324 | 23 | ||||||||||||
| Change in contingent consideration | (34 | ) | - | 23 | - | |||||||||||
| Restructuring costs | - | 23 | - | 137 | ||||||||||||
| Income tax expense related to goodwill | 50 | - | 50 | - | ||||||||||||
| Non-GAAP adjusted net income | $ | 2,367 | $ | 3,281 | $ | 4,528 | $ | 5,571 | ||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| GAAP net income (loss) attributable to common shareholders, per share | $ | 0.00 | $ | 0.04 | $ | (0.01 | ) | $ | 0.02 | |||||||
| Impact of preferred stock dividend | 0.03 | 0.03 | 0.06 | 0.09 | ||||||||||||
| Net income per end-of-period share | 0.03 | 0.07 | 0.05 | 0.11 | ||||||||||||
| Foreign exchange loss / other expense | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| Stock-based compensation expense | 0.01 | 0.00 | 0.01 | 0.01 | ||||||||||||
| Amortization of purchased intangible assets | 0.02 | 0.00 | 0.04 | 0.01 | ||||||||||||
| Transaction and integration costs | 0.00 | 0.00 | 0.01 | 0.00 | ||||||||||||
| Change in contingent consideration | 0.00 | 0.00 | 0.00 | - | ||||||||||||
| Restructuring costs | - | 0.00 | - | 0.00 | ||||||||||||
| Income tax expense related to goodwill | 0.00 | - | 0.00 | - | ||||||||||||
| Non-GAAP adjusted earnings per share | $ | 0.06 | $ | 0.07 | $ | 0.11 | $ | 0.13 | ||||||||
| End-of-period common shares | 42,493,859 | 42,322,039 | 42,493,859 | 42,322,039 | ||||||||||||
For purposes of determining non-GAAP adjusted earnings per share, the Company used the number of common shares outstanding as of June 30, 2026 and 2025. Non-GAAP adjusted earnings per share does not take into account dividends declared or earned on preferred stock.
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 June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| ($ in thousands) | ||||||||||||||||
| Net cash provided by operating activities | $ | 7,073 | $ | 7,408 | $ | 10,684 | $ | 12,521 | ||||||||
| Purchases of property and equipment | (525 | ) | (1,162 | ) | (937 | ) | (1,786 | ) | ||||||||
| Capitalized software and other intangible assets | (800 | ) | (831 | ) | (1,620 | ) | (1,677 | ) | ||||||||
| Free cash flow | $ | 5,748 | $ | 5,415 | $ | 8,127 | $ | 9,058 | ||||||||
| Net cash used in investing activities 1 | $ | (2,006 | ) | $ | (1,993 | ) | $ | (3,238 | ) | $ | (3,503 | ) | ||||
| Net cash provided by (used in) financing activities | $ | 4,474 | $ | (1,762 | ) | $ | 2,324 | $ | (3,694 | ) | ||||||
| 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 the United States of America, or GAAP. However, management believes that, in order to properly understand our short-term and long-term financial and operational trends, investors may wish to consider the impact of certain non-cash or non-recurring items, when used as a supplement to financial performance measures in accordance with GAAP. These items result from facts and circumstances that vary in frequency and impact on continuing operations. Management also uses results of operations before such items to evaluate the operating performance of CareCloud and compare it against past periods, make operating decisions and serve as a basis for strategic planning. These non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by eliminating certain non-cash expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods more difficult, obscure trends in ongoing operations, or reduce management’s ability to make useful forecasts. Management believes that these non-GAAP financial measures provide additional means of evaluating period-over-period operating performance. In addition, management understands that some investors and financial analysts find this information helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors.
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 before provision for income taxes, net interest expense, other (income) expense, stock-based compensation expense, depreciation and amortization, integration costs, transaction costs, and change in contingent consideration.
Management defines “non-GAAP adjusted operating income” as the sum of GAAP operating income before stock-based compensation expense, amortization of purchased intangible assets, integration costs, transaction costs, and change 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 before stock-based compensation expense, amortization of purchased intangible assets, other (income) expense, integration costs, transaction costs, change 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.
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 of 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.
Income tax expense related to goodwill. Income tax expense resulting from the amortization of goodwill related to our acquisitions represents a charge to record the tax effect resulting from amortizing goodwill over 15 years for tax purposes. Goodwill is not amortized for GAAP reporting. This expense is not anticipated to result in a cash payment.
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.
