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Greetings. Welcome to the CareCloud, Inc. Second Quarter 2026 Results Conference Call. [Operator Instructions] 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.

Good morning, everyone. Welcome to CareCloud's second quarter 2026 conference call. On today's call are Mahmud Haq, 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 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 a negative of these terms. 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 to 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 performances 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. Please visit our investor relations site, ir.carecloud.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. That said, I'll now turn the call over to CEO Stephen Snyder. Stephen?

Thank you, Brendan, 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, revenue was $31.9 million, up 16% from $27.4 million in the second quarter of last year.

During the first half of 2026, revenue was $63.2 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 towards recurring subscription-based revenue is foundational.

On the bottom line, GAAP net income was $1.1 million, our ninth consecutive quarter of GAAP profitability, and adjusted EBITDA was $5.9 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 are driving our growth. A more than doubling of our R&D expense as we accelerate AI development with more of the 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 15th, 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. That single step eliminates approximately $3.3 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.

Through the first six months of 2026 we paid approximately $6.4 million of preferred dividends. With the Series B fully redeemed, the substantial majority of that preferred dividend obligation is now permanently behind us. Beginning the third quarter, far 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 Brie, 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, and 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 $1 million 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.

Hadi 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 a 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 are 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 million to $132 million, adjusted EBITDA of $29 million to $31 million, and GAAP earnings per share of $0.20 to $0.23. 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.

The shape of our plan is first half weighted towards investment and integration, and second half that focuses on harvesting those investments. Building blocks of that ramp are specific and they're 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. 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. 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 entered 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 within 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 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. Hadi?

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 product. 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 stratusAI 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 CareVue, the parity items we committed to for this quarter, bringing legacy CareVue onto this modern platform are complete. And on Wellsoft, we completed two integrations this quarter, our Breeze patient experience layer, and cirrusAI notes are both now live in the emergency department workflow. The stratusAI 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, and 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. It 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 thing is heading. Our growth through acquisitions has, over time, left us running a number of independent platforms, each with its own back end. We have begun the work of consolidating them, moving towards a single modular platform on a shared back end 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. So across all three tracks, internal efficiency, smarter products, and new AI offerings, this was the quarter of visible measurable progress. With that, I will turn the call over to our Interim Chief Financial Officer and Corporate Controller, Norman Roth, to walk you through the quarter's financials in more detail. Norm?

Thanks, Hadi, and thanks everyone for joining our call today. I will provide some financial results for the second quarter and year-to-date. Our second quarter reflects continued execution of our long-term strategy. We return to revenue growth following the Medsphere acquisition, generated strong free cash flow, remained GAAP profitable for the ninth consecutive quarter, and continued investing in the capabilities we believe will support long-term profitable growth.

Revenue for the second quarter of 2026 was $31.9 million compared to $27.4 million for the second quarter of 2025. Recurring technology-enabled business solution revenue was $24 million during the second quarter of 2026, up approximately $5 million from the second quarter of 2025, while the non-recurring project-based professional services revenue from medSR decreased approximately $1.3 million.

Revenue increased 16% from the second quarter of 2025, driven primarily by the Medsphere acquisition. Recurring revenue continues to represent the foundation of our business model and provides increased visibility into our future financial performance. Second quarter 2026 GAAP net income was $1.1 million, as compared to net income of $2.9 million in the same period last year. As expected, profitability this quarter reflects continued strategic investments in AI-enabled capabilities that we believe will enhance our platform, strengthen our competitive position, and drive long-term customer value.

Higher interest expense due to the borrowings to redeem the Series B preferred stock and additional amortization expense due to the intangibles acquired in our recent acquisitions also impacted net income. Gross margins remain consistent between periods. Earnings per share for the three months ended June 30, 2026, was breakeven after deducting $941,000 of preferred stock dividends. As part of our ongoing capital allocation strategy, we redeemed all outstanding Series B preferred stock during the quarter, reducing our annual preferred dividend obligation by $3.3 million. Our dividend obligation going forward will be just for the remaining Series A preferred shareholders.

Free cash flow generation, as defined for the second quarter of 2026, was $5.7 million as compared to $5.4 million in the second quarter of 2025, reflecting the cash generative nature of our recurring revenue model and continued financial discipline. Adjusted EBITDA for the second quarter was $5.9 million. Adjusted net income was $2.4 million, or $0.06 per share, compared to $3.3 million, or $0.07 per share, in the same period last year, calculated using the end-of-period common shares outstanding. As of June 30, 2026, the company had approximately $13.4 million of cash and net working capital of $695,000.

Our balance sheet remains well positioned to support our strategic priorities. During the quarter, we strengthened our capital structure through a new $50 million credit facility and established a $60 million at-the-market equity program, providing additional capital to support future growth opportunities when conditions warrant. Given our technology-enabled services model, we believe CareCloud remains relatively insulated from tariff-related risks affecting the physical goods industries. Additionally, healthcare demand has historically proven resilient through varying macroeconomic environments, supporting continuing demand for our solutions.

Revenue for the first six months of 2026 was $63.2 million compared to $55 million in the prior period. For the first six months of 2026, the company's GAAP net income was $2 million, compared to a GAAP net income of $4.9 million for the same period in 2025. This equates to a loss of $0.01 per share after subtracting the preferred stock dividends.

Non-GAAP adjusted net income for the first six months of 2026 was $4.5 million or $0.11 per share. Year-to-date, adjusted EBITDA was $11.3 million compared to $12.1 million in the same period last year. We generated $8.1 million of free cash flow as defined for the first six months of the year, compared to $9.1 million in the same period last year.

Near-term profitability reflects the investment phase we planned, and we are focusing on converting it in the second half of the year. Our long-term strategy remains unchanged. We continue to see meaningful opportunities in our core markets and believe the investments we have made in our platform, AI capabilities, and recent acquisitions position us well for long-term growth. With that, I'll now turn the call over to our Chairman, Mahmud, for his closing remarks. Mahmud?

Thank you, Norm. This quarter marks an exciting milestone for CareCloud. We have simplified our capital structure, are delivering profitable growth, and are accelerating our AI-driven healthcare compliance strategy. With strong momentum and a clear path forward, we believe the best is yet to come. I would like to thank our employees for their dedication, our clients for their continued trust, and our shareholders for their confidence and support. Operator, we are now ready to open the line for questions. Thank you.

[Operator Instructions] Our first question is from Allen Klee with Maxim Group. Please proceed with your question.

Good morning. What would you say are the major factors that you expect to make second half '26 different from first half from a financial perspective?

Allen, forgive us, would you mind just repeating that? We lost your volume for a minute.

Oh, just what are the major factors that you expect to make second half '26 financially different from first half '26?

Okay, very good. And I'll let Norm dig into that a little bit more. As you said, 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. So a component of that is seasonality. But if we look at the revenue, only part of that is really seasonality. The other part of that relates to the fact that we will continue to layer growth on top of the existing business that we have, both through the expansion of the existing customer relationships, some of the enterprise relationships, and also through the Empower cross-selling that is well underway.

So part of it -- part of the story will be revenue. You think about from a revenue perspective, we'll need to go from roughly $32 million in Q2 to $33 million, $34 million per quarter in the balance of the year to achieve our guidance. And we feel comfortable that that is very doable. The other part of it really relates more to the adjusted EBITDA and EPS component. So if we think about some of the downward pressure from a profitability perspective, some of the downward pressure really relates to the fact that we've been spending significant energies integrating the Medsphere acquisition.

So from the perspective of the performance of the Medsphere acquisition, we've really been very pleased. But as we talked about at the time when we acquired Medsphere, there's significant tech debt that we knew going into the acquisition really had to be remediated. So we've been working hard to deploy the research and development resources that are necessary to accomplish that to really ensure that we have a solid foundation moving forward. Some of that development work relates to also making sure that the platform is really driven by AI, like the balance of our ambulatory platform.

And a lot of that energy and those resources have really been spent during the first half of the year, but we believe we'll see the benefits of that in the second half of the year. Also, from an integration perspective and cost duplication. We see a significant amount of that integration efforts really being in our rearview mirror having already been accomplished. There's still some more work to be done, but the lion's share of that was completed during the first and second quarters of the year. We'll see the benefits of that in the second half of the year. Are there other areas that would be helpful to talk about?

Well, I think, Steve, that was comprehensive. You know, our amortization will be decreasing. Allen, you know, we use a declining balance. It's an accelerated amortization that's related to the intangibles. That will be decreasing over time. And as Steve said, you know, we look very carefully at our forecasted revenue and expenses. You know, we feel comfortable with the sales pipeline and what opportunities will turn into recognized revenue. You know, so, you know, how we're going to manage those expenses going forward.

That was very comprehensive. Thank you. And then for the Empower Healthcare and Compliance Partners acquisition, should we be thinking of this as minor on a financial impact but then maybe becomes bigger from the cross-selling perspective or how should we think about it?

Yes, that's exactly how I think it makes sense to think about it. So again, the acquisition we closed in the middle of May. So from the perspective of Q2 results, it had minimal impact and frankly, overall it won't have a material impact on the financial data from the perspective of revenue contribution or overall EBITDA. But the benefit that we see really will be twofold. First of all, we're able now to be able to take the healthcare compliance and audit defense services that are really critical and becoming more and more important to the providers who we serve. And we're able to incorporate that expertise and that knowledge base now into our broader platform.

And we expect to be able to roll out a SaaS version of what has been up to this point in time, delivered manually from the perspective of the professional delivering these services, we'll scale that and be able to bring that to the market in a SaaS platform that we further supplemented and augmented by the professionals who we have on board through Empower. So part of it will be taking our existing customer base and cross-selling that customer base into the SaaS platform. The other part will be being able to leverage cross-selling from the perspective of the existing Empower clients and cross-selling our revenue cycle management services and EHR solution into that base.

The individual who now serves as the President of Empower, Mitch Brie, joined us through that acquisition for the company that he founded and grew. And just as a side note, we've known Mitch for some time. And Mitch has referred business to us that today represents about 10% of our overall revenue on an annualized basis.

So he's really been instrumental in terms of partnering with us and helping us grow our business from an organic growth perspective. And we think that he can do far more by being a member of the team and by having a overall structure as part of the acquisition that's heavily aligned -- heavily aligns Mitch, and Empower with what we're trying to achieve in terms of growth.

And in terms of the overall structure, I would just note that the overall structure of the acquisition really followed and tracked the same sort of structure you've seen in prior acquisitions with a minimal amount down, roughly 30% of the trailing revenues, trailing 12 months revenue, paid at closing, and then the balance of that will be paid from an earn-out, that's really based upon the ability of Empower to help us grow and to be successful in leading cross-selling initiatives.

Thank you. On slide 11 of the presentation, I think it's stratusAI Front Desk, it might be referring to, you know, you have a section called demand and you say, you talk of new business signed through Q2. Basically, I was wondering if you could dig into a little bit of the -- when you say new business signed through Q2 and demand from across the client base?

Absolutely. So from an AI perspective, I'll let Hadi talk a little bit more about the AI initiatives that we're seeing success on today, both in terms of stratusAI and also within our broader platform. And one other thing I'd mention too is that we're in conversations also, and some of these conversations are in the relatively early phases, but we're in active conversations with private equity groups about whether or not there may be an opportunity that relates to their portfolio companies. So private equity groups that are focused on healthcare companies.

And we really see an opportunity to be able to partner with these private equity groups long term and to be able to assist them in accomplishing the ability to optimize their overall revenue structure and increase revenues while at the same time being able to be effective in helping them reduce their costs. So really the same thing that we do as we acquire companies. We think we can accomplish the same thing on their behalf. And a lot of those discussions really revolve around our ability to assist them in particular with regard to the AI needs that their portfolio companies have.

Again, no promise that any of these individual conversations will result in new business, but we've had some promising conversations. But in terms of the overall AI, Hadi, if you don't mind just providing a little bit more color on that, that'd be great.

Thanks, Steve. So, as Steve mentioned, in terms of the stratusAI, I think your question, we continue to see the demand. We continue to sign up more deals on from stratusAI and other AI products. We are extensively in the implementation phase, and I think when we get to a point of where the numbers, the AI specific revenue numbers are scalable enough that we should be able to start disclosing, we will separate it out from the technology-enabled service revenue.

But if you look at it from the AI, it's the same three tracks we continue. One is our using it internally to perform the work more efficiently and effectively and cost efficiently, and then the front-end application that we are developing and selling to the customers.

[Operator Instructions] Our next question is from Richard Hantke with Zacks. Please proceed with your question.

Hello, everyone. Yes, I'm filling in. Lisa had to jump off at 9:00, so as you know, I'm going to ask a couple questions on her behalf. How are you doing?

Doing well, Richard. Thanks for calling in.

All right. Yes, good. Now, her first set of questions related to AI and what's going on there, I think you guys have covered that quite extensively, both in your remarks and in answer to the previous question. So we're going to -- I think you've covered that. I think she got what she needs there. Let's talk about cross-selling a little bit. I know, Hadi, you made a comment that you're in the early innings of cross-selling opportunities. Are you referring to Empower and Medsphere, or just Empower? Let's just focus on Medsphere. Have you exhausted all the opportunities there?

Good question. And if we kind of break that up, so from the perspective of Empower, we're focused heavily today on these cross-selling initiatives. So cross-selling is already well underway with regards to Empower. We don't have any new signings yet in terms of from the perspective of the Empower cross-selling, but since it's only been a couple months, I guess that would be understandable.

From the Medsphere perspective, we still have significant opportunity to score additional wins from a Medsphere cross-sell perspective. We've already really seen some pretty significant traction in terms of the hospitals that we're working with from Medsphere acquisition perspective, we've been able to cross-sell and to expand the overall wallet share of those hospitals. Having said that, I still think we're just beginning in the whole scheme of cross-selling from a Medsphere perspective. And, Hadi might add to that.

Right. So, actually, the one that you were referring to, Richard, that I was referring to, and I'll be careful here because that deal has not yet been signed, but all that I can say is that we are in active conversation with one existing PE-backed, a large enterprise client about an AI-powered platform engagement. So we will hold the specifics for now in terms of the name, the scope, or any number until it gets materialized. I would simply frame it as a strong validation of our capabilities in AI and over the decades that we have developed into our space. So that's other than the Empower or the cross-sell opportunities that Steve is referring to.

Okay, excellent. Thank you. Now, next question I think is related. Lisa was under the understanding that you have tripled your sales force. I'm not sure over what period of time that was. How's that changed your expectations? Are they up to speed? Are you -- do you to plan to expand any further? Could you talk a little bit about your sales force?

That's correct, Richard. We really significantly expanded the overall sales force, and the sales force continues to be focused primarily on cross-selling, expanding the existing wallet share. That's where we see the opportunity. That's where we're seeing the successes, and from an expense structure perspective, in terms of the overall cost, it's less expensive to sell to our existing customers as opposed to pursuing more broadly net new wins.

So we continue to focus on that cross-selling. The team is fully up to speed in terms of our applications. Many of the individuals who are part of this expanded sales team joined us through the Medsphere acquisition. So they already understood their applications, understand the place in the market for those various applications and solutions, and also how to position those solutions from a cross-selling perspective.

Okay, excellent. Thank you for that. Just one final question, different subject completely. You had that cyber breach back, I guess it was in Q1, March, something like that. Any update on that? Insurance is going to substantially cover all the costs, too early to tell. Any update there?

Certainly based upon what we know today, we don't believe that this incident will have any material impact on our operations or financial conditions. So we still feel very strongly that that's the case. But if we just back up for a minute, we just talk more generally about the security incident. I think you're referring to the March 16th incident that we had. And as you recall, this was really an incident that affected a single environment within CareCloud Health. And we were really thankful that we had the ability to fully restore our system the same day that it was impacted. We restored it the same afternoon that it was impacted.

Also, I'd say beyond that, from the perspective of customers, I think they can rest assured that we were able to expel the bad actor from our system on that same day, on March 16th. And we've since had forensic analyses performed that validate our belief that we had cut off their access or essentially kicked them out of the system on March 16th. So it was a limited universe of our overall platform and client base. It was restored quickly and the threat no longer, to the best of our knowledge, exists within our platform as validated by our third-party forensic examiner.

We are in the process right now of sending out notices to the patients who were impacted by that breach. So that's well underway. And we continue once again to believe that the insurance coverage will provide everything that we need from a financial perspective to be able to both communicate these -- to the patients, to perform the forensic analysis, which is already in our rearview mirror, legal costs, litigation fees, and the like, we believe will be within that premium -- I'm sorry, within that coverage amount.

Okay, sounds like you had it very well contained. That's excellent. All right, well, then I'll just leave you with this. It looks to me like you met or slightly exceeded Lisa's expectations for you, top and bottom line for Q2, so that's good. Anyway, thank you and thanks for taking my call.

Thank you, Richard.

[Operator Instructions] We have reached the end of the question-and-answer session. I would like to turn the floor back over to Norman Roth for closing comments.

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

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Thank you all for joining us in person, and thank you to those who are tuning in online. We are live currently from the NASDAQ market site in New York City, and we appreciate you all making the trip coming in virtually for the 2026 Analyst Day. So without further ado, I'll go ahead and introduce our Chief Executive Officer, Stephen Snyder.

Great. Thanks so much, Casey. Appreciate it. Thanks again. Really appreciate everyone making the time to come out. Whether you're joining us by the live stream or even in person, I couldn't be more thankful for the fact that you took some time to hear a little bit about our story. And obviously, there'll be individuals joining who know our story very well. And if you know our story very well, a lot of what we might talk about today will be a bit redundant, but we're also hoping to share with you some additional insights that will help you understand what our overall strategy is. For those who don't know our story, we'll also be including some additional overall highlights and the like, so you can better understand who we are and what we're doing.

Today, as we think about the overall day and the agenda, I'd like to at least walk you through some of the high points, some of the things that we'll be doing today. So from the perspective of the overall presenters in the room, I'll walk you through the team in just 1 minute. These are the individuals who will be talking with us today about CareCloud. And at the end of the discussion, we'll have a Q&A session, too, where we'd love to be able to answer any questions that you have. I'll walk you through the agenda. Quickly, these are the key points we'll be talking about. I'll also talk about some of the key elements of our overall story, some of the key themes when we look at the story that we think exemplify the overall company and really accent the places in our story that makes sense to focus in on. So if we think -- sorry, if we can go back just to the prior slide for 1 minute, I'd love to just talk about some of the presenters.

Mahmud Haq, who's our Founder and Executive Chairman. Mahmud is joining us remotely by live stream is traveling. I would have loved to be here, but he's joining us by live stream. Mahmud's story is interesting. It's the kind of classic entrepreneur story. Mahmud was looking for a solution for his health care provider wife's practice. She was starting out of practice. He searched the market, couldn't find a solution that probably meet his wife's needs. So he started MTBC at the time. MTBC then over time became CareCloud. So the story is really an outgrowth of that need that his wife had and Mahmud working to try to fill that need and appreciating the fact that there's an opportunity in the market.

Norm Roth is our Interim CFO and our Controller. Norm is one of the hardest working guys that you'll ever meet, and he'll be walking us through our financials. Hadi Chaudhry will focus on AI and focus on IT. I and I have been working together side by side for 20 years, and I think you'll learn a lot from what Hadi has to share with us. Crystal Williams serves as our President, helps oversee operations, delivery, customer support. We are really excited to be able to bring her on board. Like many of our other team members, she joined us through an acquisition, which for us has been a wonderful way to make sure that we're able to find talent in this space that can help leverage not only the acquisitive opportunity that we're working through from perspective, but then long term serve as a member of our team.

And many of the members of our existing team join us in exactly that same way. So Chris will be speaking soon as well. Chris joined us as well through an acquisition. And Chris joined us through the most recent acquisition of medSR. Chris served as the COO of medSR. And in speaking with Chris and getting to know Chris, we really thought that he was the right person to lead our overall growth strategy. So we couldn't be more excited to have Chris on board. And you'll recall that the overall growth strategy has a very heavy emphasis on expanding the wallet share of existing customers. So at least as we thought about it, we think there's really no one better to be in that role than Chris. So we're excited to have him on board.

Brendan Covello serves -- who heads up our business development team and also serves as corporate counsel and is doing a phenomenal job in that role. He'll also be joined when we talk about M&A activity by Dan Davis, who likewise joined us for an acquisition. Dan Davis was the CEO, founder of a company that was really focused on the hearing health space. He'll talk about that some more. But he really exemplifies the model that has really worked very well for us. He grew the business, got to the point where he thought that he needed someone from the outside to be able to come in and to provide the tools so we can get to the next level. And I won't steal this relevant share more about his story. But I think you'll find a story very interesting. He can talk to the integration, but then also the flywheel effect that from an organic growth perspective, the acquisitive activities then have in terms of being able to position us to expand our wallet share. That's the team internally.

More importantly than the internal team, I would say, we have 3 of our customers here as well. And we couldn't be more honored and pleased to have our customers with us. Dr. [indiscernible] is the CEO of [indiscernible]. He's grown [indiscernible] now to more than 5,000 clinicians, serving more than 4 million patients each year across 40 states, and they're just getting started. So we're excited to hear more about his story.

[indiscernible] is the Founder and CEO of the Lung Center, and he is the driving force for respiratory care in Alabama, and he's been doing that since the late '90s. So we're very excited to have him on board. And last but certainly not least is Dr. Masoud. Dr. Masoud is a serial entrepreneur. He's the Founder, Chairman and CEO of [indiscernible]. He's a philanthropist beyond all of that. Maybe we'll tell you a little bit about that when he talks, the activities he's involved in. And if you think about [indiscernible] is the company that he founded, it's one of the largest providers of home infusion services in the U.S. And again, he'll tell his story. All 3 of these customers will really talk about not only their own story, but how it is that they found us as a company and what works well and maybe what doesn't work well. So they'll be candid and share their own stories around. We can flip to the next slide, please.

Again, in terms of the overall agenda, we'll go through pretty quickly the strategic frame. That will really be -- that will consist primarily of, first of all, a high-level overview of the company for those who aren't as familiar with the story, everyone in this room, we'll frankly know most of that, but we want to make sure we take time to go through that for the rest of our attendees. And then we'll focus in on some of the key themes that we'll be tracking today. We'll talk about the financial performance overview, our historical financial performance and a little bit about what lies ahead. Norm will handle that.

From a capital structure perspective, we'll touch on that briefly. Then we'll shift into the M&A and the overall organic growth engine. And in that portion, again, Chris and Brendan and also Dan will play a key role. We'll focus on AI, and Hadi will walk us through AI, and then we'll get into the client success stories and operations, and Crystal will take the lead there. So if we go to the next slide, we have a quick high-level overview of the company and then the next slide after that, please. So we were founded about 25 years ago. We went public then about 11, 12 years ago.

Today, we work with more than 45,000 health care providers throughout the U.S. 250-plus hospitals, and we do business in all 50 states and many of the U.S. territories. These providers use either one or multiple of our solutions or services. So our EHR, our practice management system, our revenue cycle management platform or services, patient experience management tools, advanced analytics, AI and on and on and on. So within this existing 45,000 health care providers and 250 hospitals really lies the opportunity for us from an expansion of the overall wallet share and being able to meet the needs of these existing customers and being able to expand from an EHR-only customer, as an example, to a customer who wants to leverage our revenue cycle management services for AI and the like.

We're also an AI-first company, and again Hadi will talk about that some more. We have 150-plus team members in our AI center of excellence. And again, Hadi will touch on that some more. From an AI perspective, AI is incorporated throughout the majority of our platform, even the more newly acquired platforms that we acquired during the medSR acquisition. We've really made great strides at beginning to incorporate AI into those platforms. From a financial perspective, again, Norm will give a little bit more detail. But last year, we generated over $120 million in revenue. We had positive GAAP EPS of $0.10. This is our first positive earnings year, GAAP earnings year. And from an adjusted EBITDA perspective, we're at $27.5 million. This year, we expect to double our EPS and also further increase our free cash flow. On the next slide, if we could, please. So we're really kind of grouping the themes into these kind of 4 main categories.

Obviously, we'll talk about more today in the overall context of the discussion, but these are at least 4 of the main themes that we think are prominent in our overall story. Starting with the first theme, of course, health care, as we all know, is huge. Health care is a $5 billion-plus segment of the U.S. economy, represents close to 1/5 of the overall GDP in the U.S., $15,000 roughly per capita. AI is fundamentally reshaping the health care space. It's not a question of if, it's not a question of whether it is. It's fundamentally reshaping the health care space. And increasingly, it's really driving efficiencies, it's driving the effectiveness of care and the like. that's one theme that we think comes through in the story. The second would be, for us, while our preferred equity historically has played a really critical role in helping us grow our business successfully, we now have a clean, simple common stock story.

So for us, it really played a key role, and we'll talk about that a little bit more. But we're at the point where we're really pleased to be able to say that really, for the most part, is a thing of the past. That's the second theme. The third theme is today, free cash flow is now the engine that's driving or powering our overall growth. It's really not a constraint today. And then a fourth and final theme would be we're one of the most accomplished acquirers in our particular space. I couldn't have said that 16 years ago in our first acquisition, which was quite frankly, a disaster. But the second one was a bit better. The third one was significantly better, and we got into a cadence, build out the overall processes, the overall approach, understood what was important and what was less important and really focused in on the important things and continue to try to build on the successes.

So we're in a very different place today. In fact, we've been in a different place for quite some time when it comes to acquisitions. But in any event, that's another core part of our overall theme. What do we acquire? We acquire companies that have recurring revenue streams. So it's the same sort of relationships that we compete for in the organic space. So why we then also compete in the acquisitive space. It's really because, in large part, kind of 2 key reasons. One would be it helps us build our overall team. And then the second key reason would be from the perspective of the overall customer acquisition cost, it allows us to acquire the same sorts of recurring revenue relationships, but at a multiple that's far less expensive than traditional organic growth. And with that, let me invite Norm to come up and share with us some more about the financial performance.

Thank you, Steve. So just turning to the first slide and continuing what Steve was saying, we've been a very acquisitive company over the last several years. You can see just some of our key acquisitions. We've done 25-plus acquisitions to date. Last year, we had a very large acquisition, medSR. And in October, we had the MAA and AI app that we acquired. People ask what do we look for when we're evaluating a target company. So we look at at or near breakeven, recurring revenue base, low operational risk and a business that fits in with our overall model. We're also concentrating on attractive valuations.

So we're looking for a purchase price ideally is less than 1x revenue, so maybe $0.60 to $0.80 of revenue, near-term accretive. and a strong customer base. Once we do the acquisition, our focus is on rapid margin expansion. So our target is 30% margins within 3 quarters, reduce the operating expenses, some of that work we can move offshore, sometimes we just bring a duplicative people and expenses. We certainly deploy our CareCloud technology, which a lot of the small companies that we purchase just don't have, especially in the AI arena, and we look to improve the efficiency and scalability. We do look at a lot of companies.

However, we talk to a lot if they just don't fit our criteria, we pass. So that's just a little bit of our acquisition history. So if you look at our cash flows, Steve said cash flows have been improving, and Steve will get into the free cash flows later. One of the things we just did last Friday is we eliminated the dividends on our Series B preferred stock by purchasing all the preferred stock back. That eliminated dividends at 8.75%, which are not tax deductible. We took a loan, which is at 7% tax deductible. So it's not only strengthened our capital structure, which just reduced our outgoing cash flows.

The other nice thing with the term loan is with the preferred stock, we had eliminated in one shot, whereas with the term loan, it's self-liquidating in the documents that you see that we filed. It's a 48-month term loan, which we plan to pay a little sooner than that, but 148 of the loan gets amortized every month. So over the term, principal is continually going down. If you look at our balance sheet just compared to last quarter this time, we've increased our cash. We've doubled the amount of working capital.

So we feel that we have turned this around and we can rely on our cash flow going forward. If you flip to our balance sheet, I think we've cleaned up the balance sheet over the last several years. I believe we have a strong balance sheet that will help us propel going forward. One of the things you'll notice in our balance sheet is something called contingent consideration, which is a liability, which allows us to pay for some of these acquisitions through the revenues that we generate once the acquisition is accomplished.

So almost just paying for it through their revenues. So I think from -- at this point, we've got a good balance sheet, and we're strong going forward. If you just look at our guidance and our revenue, you can see in 2024, we had $111 million. Last year, we reported $120 million. This year, our guidance is $128 million to $132 million. Same thing with adjusted EBITDA, we were at $24 million, went to $28 million in 2025. And this year, our guidance is $29 million to $31 million. The better story is with the EPS. We had a $0.28 loss per share in 2024. We reported $0.10 positive EPS last year and $0.20 to $0.23 this year. And this guidance was just reaffirmed on our earnings call. With that, I'll turn the floor back to Stephen. Thank you.

Thanks, Norm. And Casey, if we can go to the next slide, please. So first of all, I want to just touch base real briefly in terms of the overall capital structure. And maybe I'll step back a little bit further and just share with you what the purpose of the preferred was and the role that it played. If we go back to 2015, we were at about a $20 million, $23 million revenue company at the time. And we, at that point in time, we're thinking about how do we go about acquiring other businesses, how do we go about from the perspective of the overall growth opportunities that we saw in this space. One of those opportunities that was presented to us was this opportunity in terms of the preferred.

And as [indiscernible], who's here with us, will tell you, this particular instrument is pretty rare. You don't come across many small cap companies, microcap companies at the time who leverage preferred. But for us, it worked well. So what preferred helped us do is preferred helped us grow from a $23 million, $20 million company to about $130 million company this year or let's frame it last year, about $120 million company. And really preferred was the growth engine in part that helped us get there. It helped us close acquisitions and to move forward. Now it was very successful in doing that. But over time, what it also created was it created an annual dividend burden and also in addition to the annual dividend burden created the overhang. So what we embarked to do starting about 2 years ago is we recognize the fact that we had largely outgrown the need to use preferred.

So we considered different paths of actually making sure that we were able to eliminate the majority of that overall dividend burden and also the overhang. So I'm really pleased to say that from -- if we go back 2 years ago and compare that to today, we've eliminated more than $13.5 million worth of cash dividend obligation on an annual basis. We've also removed $140 million plus of that overhang between the preferred stock and the accumulated dividends that were associated with them. So we really hit reset in terms of the overall structure, we successfully get reset. And we're pleased, as Norm said, to have been able to close out the -- one of the final chapters of that most recently this last Friday. So if we go back 30 days before last Friday, we closed an acquisition line with Citizens Bank.

As you would imagine, like any acquisition line, let alone a $50 million facility for a company our size and involves a significant amount of due diligence, pressure testing, our overall cash flows, understanding the overall dynamics of the business, understand the industry. We're really pleased to say that Citizens moved forward with us about 30, 35 days prior to then. And then that set us up to be able to redeem the shares. So we used $42 million roughly of the overall facility to redeem those shares. And then thereby removed a significant part of that overhang or at least completed the removal of that overhang together with the dividends.

On the next slide, we're going to just talk very briefly about free cash flow. And really, it was the free cash flow that really had -- was one of the things that positioned us to be able to move forward with that credit facility and also to remove a lot of that overhang. And then by extension, the dividends associated with the preferred. If we go back to 2023, our overall free cash flow was a little shy of $4 million. we progress then to last year, $20 million and change.

This year, we're -- we've provided guidance, and we're confident that, that number will be approximately $25 million of free cash flow. So we've been able to increase free cash flow by about 6x during this period of time. If we step back and just think for just one moment about the Citizens Bank for a minute, Citizens Bank, the principal interest on that overall line is about $1 million, give or take. Norm can get into specifics, but it's approximately $1 million every single month.

During the second half of the year, we're confident we'll be producing well over $2 million I may be a little bit more conservative, approximately $2 million, but maybe well over $2 million each and every month. So the idea is we're able to not only pay the principal and interest and thereby complete the overall -- the kind of tail end of that overall redemption by paying off the underlying line, but we're also able to use that excess free cash flow for continuing to grow the business for acquisitions, organic growth and the like.

If we can flip to the next slide, Casey, and I'm going to invite Brendan to come up, please. Brendan is going to talk with us some about our overall acquisition strategy, and we'll really start with the themes that Norm has spoken about. And Brendan, please come over. has been with us for about half a year or so, is just doing a great job in this role.

Thank you, Stephen. My name is Brendan Covello, I'm Vice President of Corporate Development here at CareCloud. I lead our growth and M&A efforts. And right now, it's a really exciting time to be in this seat. As Stephen mentioned, with the capital structure cleaned up and cash flow accelerating, we're actually in one of the strongest positions we've ever been to pursue acquisitions. And I'm going to show you a little bit more about how we're going to put that to work. So it starts with the opportunity.

Right now, there's a fragmented market in the revenue cycle management space. There's more than 2,000 companies that we are currently targeting and the vast majority lack their own technology, AI capabilities and global resource delivery team. Those are the 3 ingredients that CarePl can offer and turn a mid-market RCM book into a margin compounder. The model is what makes these companies attractive. It's their entry price. Many of the sellers are owners ready to retire or derisk. We're acquiring these companies with reoccurring revenue at 6.6 to 1x revenue. You compare that to the cost of winning the same company organically, which in the health care IT space runs above 1x, you can see why M&A is such an efficient growth channel for us. And the third pillar of our M&A strategy is the deal structure. We structure these deals to protect against downside. 40% to 60% of the consideration is cash at close. and we structure the rest as an earn-out that only pays when the acquired book hits the agreed upon financial milestones.

And these 3 pillars and overall M&A strategy is exactly why CareCloud is built for M&A compounding this year and into the next. Next slide. And the next question is how do we fund this and what does the integration exactly look like. So as Stephen mentioned, and connecting back to the cash facility that we just previously closed on is we now have free cash flow of approximately over $1 million in the second half of this year. And after paying back the principal interest, this is what's going to pay for the tuck-ins and investment in the global delivery expansion that we are hoping to pursue. We won't have to have any equity dilution or we will not have to draw on the credit line. And we're going to be able to do this with our tried and proven playbook on the integration side.

We have been able to acquire clients, bring them to the CareCloud platform, layer in our RCM automation and shift the services to our global resource team. And the result is acquired entities move from roughly breakeven to 25% to 30% contribution margins within 3 to 4 quarters. And this isn't theoretical. We've closed 4 tuck-ins in 2025, all funded from internally generated cash flow, and we even have another small tuck-in currently under a nonbinding agreement. And to discuss this further is Dan Davis. He's going to bring this to life. He's currently running our Hearing Healthcare division, and I'll turn it over to Dan.

Thanks. Appreciate that. So my name is Daniel Davis. I am the President of the Hearing Healthcare division of CareCloud. I've been in the health care business for about 45 years, and I've been in the hearing industry area for a little over 10 years. I was the CEO of Revenue Medical Management and part owner of it. We were a medium-sized RCM company. And we were specific in the audiology and hearing aid space, which sets us apart from a lot of the other RCMs, but we are that little unique -- I'm in a unique position here of being on sort of both sides of what we're going to talk about today, being on the M&A side of it and on the operational RCM side of it as well. So a little bit to talk about what happened with RevenueMed.

So as you can imagine, being a small to midsized RCM company trying to grow, we started in Southern California. We had an office out there. We put our teeth in Cali. We started small, and we started to grow. And you can imagine being a small company with staffing, not only was I the CEO, but I was also the HR. I was also payroll, I was also marketing and accounting and business development, [indiscernible] at times as well. Whatever it took is what we did as a small company. So I would tell you that a lot of companies like ours run into these problems as you're trying to grow and you're trying to figure out where are you going to go and how you're going to do this and how you can do it organically without over operational cost and everything else. And I summed it up in basically 3 words, and it's support, bandwidth and focus. And -- there's a lot of challenges to this as you're trying to look at things because as you're trying to grow your bandwidth, that creates another problem in the fact that now you've got all this other operational stuff to do and you start to lose the focus.

So how do you grow this? And how do you give the support to do this as a small company? So in 2024, we did some decent growth. We started out pretty small. We only had a few clients, but we are doing pretty good. 2024, we are averaging about a client a month. So we were basically in California, 2024, we actually expanded out and started getting it and we are in 11 states. We went from about 4 or 5 clients to a little over 20. So we were doing pretty well. Well, when you start doing pretty well, I guess what happens? Here comes bandwidth problem. So now we're based in Southern California, and I've got a client in Florida. And that client in Florida at 9:00 in the morning wants an answer about a verification of benefit.

Well, it's 6:00 in the morning in California.

So now you're having to talk about remote staff. Now you're having to talk about geographic problems. And so your bandwidth becomes a very, very stagnant part of what you're trying to do. And while you're focusing on this, guess what you're not focusing on, the business side of it and the growth in the revenue because there's only so much you can do as a small company when you're trying to do that. So you've got your time zone problems, you've got all your staffing problems, you're trying to train people.

And that's really where we got to a point in that tipping point of where is RevenueMed going to go and how are we going to do this? And we started off 2025 when we started thinking about things. And I think it was late February. I got an and Dave coincidental from Stephen Snyder. And it talked about CareCloud and what it could do to help companies and the opportunities they had and the AI generation and all these other cool things. And I was just like, well, this is interesting because what we didn't want to do is we didn't want to go venture capitalist. We didn't want to go get bank loans. We didn't want to -- we were trying to organically grow this.

And what he was presenting through this e-mail, which I found out later was AI generated. It was very intriguing. So I reached out and we talked to him, and we went through some stuff. I told him about the challenges, where [indiscernible] was going, what we're trying to do. We grow it organically. We go to conferences. We do our business development and -- but this is where I am now. I'm stuck. And so -- we went back and forth for a little bit. And I would tell you that in April, actually, it was April 1, so cools day. But on April 1, we became part of the CareCloud family, and they acquired our company. And it was really cool because it basically was transitioned over.

Our staff came over, our clients came over. It was a very smooth transition. None of our clients fell off. They all stayed. It was very great. I would tell you that we spent the first 60 days or so just doing the transition, teaching the CareCloud staff, the craziness of the industry of audiology and hearing aids, and we created the hearing health care division. So by the end of December, we actually had doubled our client base. In those 8 months, we actually doubled our client base. So that takes us into 2026. So 13 months into the acquisition where we were going from a client a month, we're now going to a client a week.

So talked about support and bandwidth and focus. So the support, this is what we got. I've got the support. I got the support from Stephen and administration. I got the support from Norm and finance. I got the support from Crystal and all of our operational team. I got the support from the sales and marketing team. Chris, I got all the support that I could ever do. And I got the bandwidth to go with it. So guess what happened? It allowed me to do the last problem, focus. When you can focus, you can do exactly what we did there. When you go from 24 clients to 72 clients in 13 months, 300% growth, 126 providers to 230 providers, 183% growth.

So we were in 11 states. We're now in 29, soon to be 30, 264% growth. And with our new clients, like I said, new client velocity, 22 in the first 8 months. We've done 35 clients since January. That's focus. That's what this method does when we talk about the M&A and finding companies that need the assistance. It's not about a takeover. It's not about take pretty woman and buying the company and demolishing it. That's not what this is. This is bringing it in and organically growing it to become a bigger and better revenue source for the company. And that's exactly what happened with this.

And it's been very cool for me to be able to be part of it and just to be able to focus on what I do best. And I think those numbers are pretty staggering for 13 months. a lot everybody here on the focus team. So that's my story. I appreciate it. And to talk more about that on the Revenue med side and where we're going, I'm going to let Chris come up and he's going to give you some insight on how we're doing on growth from [indiscernible] and the sales.

Thanks, Dan. Exciting times, guys. We've got a uniform platform at the right moment right now. If you look at what's happening, go ahead and hit the next slide, Casey. Thanks. The market is shifting our way. Reimbursements and margins are lower, makes it harder for the physicians to make money. Every dollar in operational efficiency matters, and that pressure is driving consolidation. Providers are moving away from point solutions and towards integrated platforms to do more with less ultimately. Further, automation and demand are accelerating that shift.

Providers want tools that reduce manual work and scale without adding that headcount. So these dynamics are already at play and across the market. And how do we win in that space? So we have a broad platform of ambulatory inpatient and other specialty care solutions. [indiscernible] that range on one roof is something that very few of our competitors can do. Existing relationships lowers that cost and time to expand, and we're not starting from scratch. We are deepening what's already there. Our operational data gives AI meaningful context from day 1. And our multiproduct customers drive higher retention and lifetime value.

The more of the platform they use, the stickier the relationships are ultimately. Where we play at is in self-billing providers are looking to simplify their billing operations and RCM is a key entry point to that and all things adjacent within the portfolio. Physician groups that are consolidating vendors, they want one platform, one relationship, one contract and health systems looking to modernize. Also our existing HR customers is a clear path to the full platform, for example, like [indiscernible], I mean we have a couple of hundred customers that are mid-flight right now we're looking to migrate and expand with. Next slide, please. So we're going after this in 2 different directions. One to expand existing customers and also for net new acquisition and new customer growth. expanding relationships to cross-sell. These customers are already on the platform and the highest probability growth opportunity we have period. AI is opening up that broader platform conversation.

It gives us a reason to go back and have conversations with them and what else we can do together ultimately. The installed base creates scalable expansion. These existing relationships mean shorter cycles, lower cost and higher close rates ultimately. The platform that improves retention. The more workflows we touch, the harder it is to leave us. When we look at new customers, we're using our own AI-enabled engagement expands reach across target markets. We can run more touch points more consistently than a traditional team could manage.

These diversified channels keep our pipeline moving, paid referral events, so no single source creates a bottleneck and that overall lead gen engine. The multiproduct deals from the start, higher ACV, and we're building that retention baked in from day 1 by expanding not just a single point. Automation allows growth without proportional headcount expansion, the output scales and the costs do not. A lean SDR team using AI and automated sequences to engage accounts at a scale, a small team normally could not. So we leverage these same sequences to our tools and automation.

So right now, the pipeline ACV are tracking ahead of the same period last year, and the adoption with the installed base is creating new expansion opportunities as an entry point and the cross-sell accelerant ultimately. So let me show you how the team is structured. Next slide, please. So as Stephen mentioned, a lot of us in this room, we all came from acquisitions. We're built on M&A experience, integrating acquired businesses, expanding solution set and compounding value across the base ultimately.

In our ambulatory portfolio and platform rather, we have RCM clinical AI and patient engagement. It's basically a full stack for ambulatory providers. Our insight teams covers the smaller groups, 1 to 3 providers, high volume, efficient motion and our field sales team works larger, more complicated, more complex, higher ACV opportunities. We also have specialty support like Dan working in audiology, and we have dedicated individuals selling Stratus -- cross-selling stratus and cirrusAI into our customer population, for staffing. In our inpatient platform, which is unique because a lot of different companies are coming out from different angles. But for us, we have an ability to go after critical access hospitals, urgent care, freestanding EDs, smaller behavioral health facilities.

And with our consulting, we can lead in with operational revenue cycle stabilization but then expand to broader platform opportunities from there if we earn the right to grow. And then data convergence in archive services, it's a practical entry point for systems the transition. As far as our outside sales team has grown 3x since the same time last year. This is deliberate investment and not incremental hiring. The capacity is in place to execute the growth plan. And then with our flywheel, we acquire by bringing organizations on the platform. We integrate, we embed across financial, clinical and operational workflows and then cross-sell, again, AI and adjacent solutions as trust deepens.

And lastly, compound, retention improves, ACV grows and acquisition costs decline ultimately. So the platform is broader, the team is larger and the market is moving in our direction right now. And with that makes, I'd like to invite [indiscernible] up to talk more about AI. Thank you.

Thank you, everyone, for taking the time to come here. You already have gone through what CareCloud is. You only went through the M&A and the numbers and the capital structure. I'm going to take the next 20 minutes or so talking about our overall the AI strategy, how the AI is working into our product base and in CareCloud. So our focus has been on using the AI implementing in the AI on the 3 different tracks, 3 separate tracks. So one is the -- it's a one investment, and it's a 3 economic or you can say 3 economic outcomes. That's our overall architecture.

If you look at the track 1, there's some new products, which are the stand-alone AI high-value workflows such as AI and AI into the clinical space. The outcome is here is the new revenue line at the moment as it's not showing as a separate into our P&L. But as we grow and as the implementation keeps taking place, we should be able to show that revenue separately. The track through, which is implementing the AI into our own operations behind the scenes where Crystal is going to talk about a little more as part of our presentation. This is where we can see the outcome in the margin.

We can see the same employee can do a lot more. We can have AI to generate the deals. So there's a lot of workflows where the AI is working behind the scenes. The third one is the AI -- embedding the AI into our existing product base. As you already know, we have the EHR, the practice management and now the inpatient after the medSR acquisition, the whole product suite. So the team has been working on implementing the AI, embedding the AI into the existing -- the product suite that we have. So the outcome here is the more stickier relationship. It shows up in retention.

The clients who are using it, it's making our products more competitive while comparing with the other competitive -- the competitors. So economic outcomes, so I just want to make this one point here. So this one implementation of one track derisks the other. So even if there is some delays in the implementation, we are still getting the benefit of the AI into the back-end operation or getting the AI benefits into the -- it's still creating -- improving the retention rate and creating more stickiness there. So that's our overall AI strategy.

It's not -- none of these are the bolt-on AI strategy that you come in and build a product and try to connect and sit there on the site as part of a separate line for the business. In our case, it's part of the workflow, it's the layer on top of who we already are, whether it's the operations, whether it's the product base, it's part and parcel of our overall company, the overall -- the product and the services strategy. Can we flip to the next slide, please?

So where it shows up, that's one of the question always being asked in the P&L, the same 3 tracks. If you look at the track 1, the new products, that's a new revenue line and it's recognized as deployments ramp through 2026. Future weighted by design, that's the one that shows up the latest. The second one is the back-end optimization that shows up in the cost to serve gross margin, operating leverage. This is recognized today already in the run rate and expanding.

The track 3 embedded AI that shows up in retention, net revenue retention, expansion inside the installed base and recognized continuously progressively, and it strengthens the core a little more every quarter for us. wo of these 3 tracks strengthen the existing base before they ever create a new revenue line, and that is the most what is moving today.

So these are the 2 from the new -- even though there are a number of other products that we are working on. These are the 2 products that are in production today. The first one is the Cerus AI notes and the Assist. Another one is the Stratus AI, our front desk agent. On the clinical side, so what it does is it listens, it summarized and converts that into a clinical documentation. It's a smart solution. It's just not simply a transcription solution, but listens and converts into a transcript. It looks at the social history of the patient, the previous medication, the previous charts and converts them into a more precise summarized compliant chart for that provider.

We have seen that it can help saving about 70% of time into the clinical documentation. 49% reduction in after-hours charting, which is one of the biggest problem in the health care industry today. And the 7% more charts can be done. We have seen this through the experience through our customers today. This is completely for us and integrated similar to any other solution. It's part of our EHR and the practice management platform. It's not a separate where you need to copy and paste all the information is part and parcel of our EHR platform. The second one is the Stratus AI, the front desk agent that administrative, which is many times has been one of the most neglected area.

That's where most of the problems, the staffing issues and the real problem starts at the front desk. So it's basically agentic AI voice agent that intercepts the call, it listens to the call, -- in our initial deployments with the customers, we have seen that up to 80% of the end-to-end calls are being handled with [indiscernible] AI solution. It can handle the scheduling. It can take the prescription refill calls, it can take the lab inquiries, it can answer the general questions in a very human-like way. There are 0 hold time. It can speak and understand 30-plus languages.

If you are -- if a call is coming in, in 2:00 p.m. during the day or if the call is coming in at 2:00 a.m. in the night, it can be handled in the same way at the same second at the same expertise. The only difference is that if there is an escalation in the night, you may not be able to have an office staff number available. But beyond that, everything else can be handled through the Stratus AI. So these are the 2 that we are -- our flagship or the 2 key products that we are -- that we have on the portfolio. It's again, it's tightly integrated into the existing platforms in the EHR system. So the agent is aware of if the patient is calling who the patient is, what's the clinical information, it's completely connected with the platform.

Go to the next, please. Now this slide, I think it's just to -- before getting into that 1 million plus the projected call volume number, just to put the things in perspective. This is -- the first thing is this number is based on the contracts we already have signed. These are the Stratus test agent under the contract today across the installed base with deployments actively in progress. This is not a pipeline number or not a hope, it's a paper that exists today. The second one is this builds over roughly 6 months of a ramp-up.

Deployments move through a trial period into production of about 30 days. So the clients have an opportunity to evaluate this, look at it. And if they think that this is something useful for them, they can continue. Otherwise, they have an option to exit within the 30 days without being liable for long-term contracts. With that, so what we already have signed, once it's ramped up, the projected call volume for those -- the practices that will be handled, the call that will be handled through our stratusAI is over 1 million calls in a year. This is a full ramped up annualized call volume projected number.

And it's not that we have stopped signing, but the purpose here was just to give that there's no lack of interest from the customers. So the moment they listen to the call, they listen to -- they experience the quality of the call, we continue to -- they continue to opt in and we continue to sign the contract. And just one of the quality matrix here, one of the customers after completing the 30 days trial, they themselves said they want a 2 years contract. They won't even sign less than less than 2 years contract just to have a longevity as part of the contract. They did see the value -- how effectively the stratusAI is working.

Next slide, please. Okay. Now just talking about the same back to the SAI nodes I was talking about before. It's similar to us has been the proven entry point after proving its abilities into the ambulatory space after the acquisition of Mediphere, the team is actively working on integrating this into the ED and the inpatient and which is the product of the Wellsoft in that space. It's actively in progress, and we are on track to get it delivered in the second quarter -- by the end of the second quarter. This will help us -- this is one of the proof point after acquiring the companies is not just the revenue we are looking into.

It's taking that technology and how we can layer and integrate our AI technology into that platform, which can multiply, which can create that further flywheel impact that Chris was talking about earlier. So we are on track. We are working towards implementing the clinical documentation. Our Stratus AI, the FDA is also in progress. Even if we have a signing today, we are in a position to do the deployment of Agentic AI voice agents as well. Next slide, please. So just a little bit into what's coming next. I don't want to oversell on this because these are the things that we are -- that we have in progress and the goal for during the 2026. Those are the 3 major areas. One is the AI prior authorization, which is one of the more significant administrative burden in health care.

So it predicts when the prior authorization is needed. It collects it pulls the required information from different places in the documentation. It compile it in the final format and then routes it to the right payer. And after routing it to the right payer, then it keeps a track of it if that authorization has been completed or if it's needed, we can track that. The second one is the AI assisted with the medical coding. This is where a basic coding even that does exist today into our cirrusAI notes application. But when it comes to more complex specialties like radiology or ophthalmology or surgical specialties.

So our team has been working on with the leveraging of our years of data and the AI technology, where we should be able to either take the medical documentation and digital formats or the ple formats, AI can analyze it and convert it into the right medical diagnosis and procedure codes and also suggesting the modifiers to be appended. So those can be reimbursed effectively at the level it should be reimbursed. The third one is we are extending. We're expanding further our cirrusAI notes application because each specialty needs some further optimization, the more complex like neuro surgery and the like, they're going to need a lot more training and a lot more complexity. So our team has been working on focus -- this is another one of the focus for the 2026.

Go to the next one, please. And this is -- I'll just quickly go through over this because this I'll leave it for Crystal to talk about it. So our approach on the back-end operation, this is our track to. We are -- we have implemented our AI behind the scenes in the RCM operations, financial and administrative functions, whether it's about reducing the claim errors before any claim gets submitted. It's our AI-based claim scrubbing engines that look at the claim and look at the rules of even that specific payer and highlights, okay, this claim will not be paid or cannot be paid.

So it flags it where it can take an appropriate action, it can automatically take the action and fix the claim before a claim can go up. The second one is improving the documentation, increasing the first pass acceptance rate with the payer as if the staffing is done effectively, if the fixation is done effectively, it will help improving the first-time pass rate with individual -- each payer and the higher volumes with the less site accounts as our M&A engine is expanding as the organic growth is expanding.

This will help us keeping with the less number of staff members and still be able to deliver more because a lot of work can now be handled and supported at a higher quality with the AI. And this is helping us basically move towards starting to track the lead indicators instead of the lagging indicators, which have been of the -- we think are the of the past. It's the lead indicators that how many touches were done on the claim before the claim gets if you look at it, the first-time pass rate could have been good, but if you have touched the claim 5 times before achieving that first-time pass rate, it's not as effective as if the claim was not touched at all and still achieve the same first-time pass rate.

Our North Star zero touch claim from prior authorization and the intake took place with the help of an AI, the prior authorization kicks in, take the prior authorization, convert that to the claim. AI does the coding, scrub the claims, convert it according to the requirement of the specific payer, send it out, post it end-to-end, no touch. not happening tomorrow, but eventually, I think this is where with the help of AI, the industry is moving towards. -- this is just -- we also have started to extensively focus on leveraging the AI into our software development teams, whether it's the various tools everyone -- I think everyone has been speaking about in the industry, whether it's the Microsoft Copilot or it is the [indiscernible] and the like.

So the team have been actively adapting to those new tools. The outcome is simple. It helps in designing. It helps in code reviews. It helps in analyzing the code for -- from the QA standpoint. It provides a higher code quality and it helps us produce more output per engineer. Next slide, please. This is the third track, which is embedding the AI into the existing -- the client base -- sorry, the existing product suite that we have, multiple EHRs on the ambulatory side, EHR and CareCloud charts application. We are expanding into the inpatient inpatient product suite as part of the medSR acquisition, incorporating into the practice management, things as simple as summarizing the charts, things as simple as providing the recommended and suggested diagnosis code at the time of the treatment to the providers for that specific patient, showing up into the patient check-in apps at the time of the check-in asking the basic questions from the patient and AI can guide the best next questions from the specific patients to be asked.

So by the time the patient walks into the room, the system already has created a draft of the of that chart for the patient. This is what we are calling it basically an invisible AI in many cases. It's just the system will start doing more for the same medical provider. So it's behind the scene. It's part of that product that the clients are using. And we are -- this medSR and NAA integrations are taking place at the moment. Next one, please. Inpatient portfolio, the 3 areas, Wellsoft and cirrusAI, ambient clinical documentation and emergency and department -- emergency department workflows Marketware AI, turning a physician recruitment relationship tool into an AI-powered recommendation engine. Wellsoft and [indiscernible], which is our patient Breeze patient engagement tool. We're extending the patient experience and engagement layer into the ED with the clinical data transaction synchronized across both platforms. Three integrations, 3 different users, all in active development this quarter. This is what it looks like when an acquisition stop being just line on a time line and start an AI in a clinician's hand. Next one, please.

So these are some of the things that we are focusing, just to summarize everything for Forward 2026 milestones. We will continue to -- on the agent expansion on the stratusAI. This is making sure if, let's say, the agent for appointment scheduling has been deployed, but the prescription agent has not been deployed. So there are more agents each customer that we need to keep on deploying and expanding. We will continue to sign more contracts for Stratus AI as we move forward. Incorporating our AI into the inpatient product suite that we have as well other products. That's the cirrusAI and Stratus AI. And then in the pipeline, the upcoming the 3 products I talked about between the authorization, AI-assisted coding and additional documentation. So at least one of those 3 for the general availability.

And we are very confident that all 3 should be at least be available for the first evaluation customers that we use during 2026. Completion of the integration for medSR, there's a lot of technical debt that we need to -- that we had to take care of, which the team have been extensive and aggressively working towards it to completing that integration during 2026. And then the lead indicated transparency as we start to show the results -- as we start to see those results of the lead indicators with the help of AI implementation behind the scenes at the back-end operations. So we should be able to start talking about in terms of numbers, those lead indicators.

And Chris will be sharing some of those numbers today, but more continue throughout the year, how we are progressing towards how those -- the outcome is being converted into those metrics and the numbers. Perfect. And thank you. And we have, as Steve mentioned, introduced Dr. [indiscernible]. I would request just come and say a few words. He has been our customers for [indiscernible] agent. one of the initial users of that product. So it would be good to just hear direct from his [indiscernible]

Thank you. Good afternoon Again, I'm Dr. Russell Holden. -- my notes written if that's okay. I'm a physician in private practice in Florence, Alabama. After a Vanderbilt, I've been in private practice since 1995. My practice is focused on pulmonary and sleep and critical care medicine. My clinical team cares for a large number of patients on a daily basis. Since starting my practice, I've had 3 electronic medical systems. I was an early adopter in the early 2000s. I was of 3% of physicians that had EMRs at the time. And almost my last system before CareCloud was functional, but very basic. Almost all of our administrative tasks were analog. We had human scribes, and they were very good, but they got carpal tunnel, their children became sick, they could show up to work. Staff answering fumps when they could long wait times, we had missed appointment rescheduling.

Our lab data imaging results had to be manually input into our system. And my front desk people did their best, but the manual intake forms and insurance verification, high-volume phone calls made it impossible for them to keep up. No matter how many staff we hired or how we arrange the workflows, the administrative burden precluded our ability to provide optimal patient care. And so this is unfortunately a common story in many medical practices even today. I adopted the CareCloud platform in October 2024 at the suggestion of my business people at LBMC in Nashville. And since then, working with the CareCloud team, we systematically addressed most of these administrative problems. Our patients can now use a Breeze app on their phone or tablet to get online scheduling. We can perform insurance verification before they arrive.

The patients can update their clinical histories before arrival. They now get automated appointment reminders. The patients can now communicate with our office staff via text and e-mail. And all these developments have significantly reduced the workload of my front and back office staff. Once in the exam room, -- most of the patient's labs and imaging data are already in the patient's chart via interfaces with our local hospitals, Quest Lab, LabCorp and local imaging centers. Manual input for these tasks are now virtually 0. And I now have an AI scribe, which when I use CareCloud cirrusAI, the clinical information is captured in real time, integrates into the EMR.

It's a life-changing timesaver. I mean, I believe you said 7%. It's really 100% charts closed in my office at the end of the day. We can close the trucks quickly. This allows me to focus directly on the patient and their concerns without having to look at the computer. And I'm very excited about the CareCloud's development of AI agents. In December of 2025, we deployed the Stratus AI automated front desk Assistant. And we named her [indiscernible], and we were able to give her a southern accent that she could talk like me. And so -- and in fact, it was really odd. We had patients coming in asking to speak to Stacy, and they thought she was a real person there. So successful scheduling, 83%. We did 3,608 calls in 1 month. Stacy handled 1,871.

But I think importantly, the empathy expressed was 87%. So the patients felt that empathy from the AI, which I thought was interesting. It wasn't without some problems in all honesty that Stacy would sometimes double book appointments. We initially did not write our phone system properly, and that led to some miss phone calls and setting up the appropriate KPIs to measure success took some time. But most importantly, from a patient perspective, we've had some objective measures indicate since we've changed the CareCloud, we feel as though their care has improved. I'm embarrassed to see our previous patient satisfaction scores were 2.5 out of 5. I'm embarrassed to tell you that.

The main comments that while they thought the medical care was excellent, the office experience was terrible. Since adopting CareCloud, our patient satisfaction scores are now 4.7 to 4.8, and they continue to go up. Many of our patients have communicated to me that their office experience is much smoother, much more efficient and with less wait time and increased attention to their medical problems. And I think the main driver, the main driver of these improvements, we now have a better practice management system in CareCloud that allows us to measure areas we need to work on in order to address patients' concern in a proactive way.

Our next future phase will hopefully be to deploy outbound AIH particular tasks. We specifically plan to focus on our CRM or customer relation management using outbound agents to remind patients who've not followed up in a while and to provide them information about upcoming things that they can help with. I'd also like to use outbound agents at some point in the future to focus on specific population health needs for our community.

And finally, I just want to acknowledge the development team, [indiscernible] and you guys, I mean, amazing work, and they've accomplished a truly transformative for my practice and a great partners for. I appreciate it very much. Thank you. Thank you [indiscernible], and it's great to hear about your experience to be here in person.

So I'm Crystal Williams, and I'm the Head of our client success operations and revenue cycle strategy. So I will talk about how we're using AI within operations and how that's translating into operational metrics improvements and client satisfaction. So let me start with some operational metrics that best reflect our progress across our platform. One of the strongest indicators of operational maturity is the claim quality at the point of submission.

Today, our first half claim acceptance rate is 99%, which is outperforming traditional best-in-class benchmarks. That performance reflects the optimization of our AI-driven validation, payer intelligence and continuous workflow optimization. It's embedded directly in our operational model. So I'm, first and foremost, a customer of the AI team and consistently giving feedback and tweaking it and working as well with that group to make sure that it's being optimized.

What's most important is that we're proactively preventing issues before the claims submitted rather than after the denials are occurring. This accelerates reimbursement cycles and creates a better provider experience. Insurance denials remain to be one of the largest operational pain points in health care. And through predictive analytics, intelligent claim scrubbing and payer behavior modeling, we're continuing to reduce avoidable denials earlier in the workflow, and you'll hear more about that when you hear it from Fox.

Today, our denial rates remain below 5%, which is also exceeding the best-in-class industry standards and reflecting our effectiveness of our operational discipline in AI embedded workflows. We believe these capabilities becoming increasingly valuable over time as workflow data and payer intelligence continue to become accumulated. What makes us different is that our AI capabilities are embedded into our operations, our technology teams, our operational leaders and frontline billers continuously refine our workflows using real-time operational data and payer feedback and our clients reap the benefits of them.

Go to the next slide.

As we evolved our operational model, we also recognized that the industry needed to adapt how we were measuring success. As for years, revenue cycle has been measured on lagging indicators and what happened after the fact, for example, AR days. We believe the future of revenue cycle management is predictive, automated and increasingly driven by leading indicators. So in order for us to determine how effective we are being with AI, we took a baseline in 2025 when we started the AI division. And what we determined as part of that is since implementing those measures, we've seen -- already seen meaningful improvements in trends.

We expect those to continue as automation matures. So one example, as [indiscernible] talked about earlier, is zero touch rate. So this measures how many claims go through the life cycle of revenue cycle from the point of entry to payment posting to claim submission and ultimately payer adjudication. Since we've taken those measurements, we have increased the zero touch rate by 7%. This creates greater consistency, scalability and faster processing cycles. Now although the long-term objective is increased automation, we all know that the health care revenue cycle and insurance industry remains highly regulated and complex where human expertise will always play an important role.

That's why we're closely monitoring that first touch payment performance. It reflects how effective our teams are when manual intervention is required. Since AI deployment, we have seen a 6% improvement in our first touch payment performance, helping accelerate payments and drive client cash flow. We believe this represents one of the defining shifts occurring within the RCM industry, moving from a labor-intensive processing model to more intelligent workflows, orchestrating and leveraging our operational leverage. Now operational performance matters, but ultimately, it only matters if it translates into stronger client outcomes and long-term partnerships.

At CareCloud, we believe client retention is not just an account management function. It's the outcome of execution, responsiveness, transparency and trust. We've invested heavily in our client health monitoring program, which combines operational, financial support and engagement indicators to identify risk earlier and intervene proactively. This allows us to move from a reactive service recovery to a predictive relationship management. One thing that separates CareCloud is our executive involvement. Our leadership team remains closely involved in those complex strategic priorities, especially within our complex relationships.

Our governance model is highly collaborative, cross-functional, bringing our operations support, product and leadership teams together to create tighter alignment on our products and services. In parallel, our voice of the client program creates a direct feedback loop between our customers and our product evolution, helping prioritize workflow enhancements and automation initiatives. Over the past year, we have seen measurable improvements in our client retention, and we believe the market is increasingly looking for strategic partners that can combine technology, automation, analytics within a one single ecosystem rather than fragmented solutions. But ultimately, the best validation of our strategy and performance will come directly from our clients. So I'd like to introduce Anthony [indiscernible]. He is the CEO of [indiscernible].

Executive engagement and complex relationships, and then they introduced me. So that's great. And for the record, doctor, I'm a clinical doctor of physical therapy, the CEO of Fox Rehabilitation. So happy to be here with everybody. For the record, when I went to physical therapy school, presenting at the NASDAQ and the suit was not on my bingo card. So I got wage listed from Temple University for physical therapy. So someone can like take a picture and send it to the program. That would be really cool. A little bit about -- I want to thank the CareCloud team, you can take the picture for having us to be part of this milestone today for the company and for the partnership that we both have. So who is Fox? We are an outpatient physical therapy, occupational therapy and speech language pathology provider. to the geriatric client in the home. So our average patient age is about 83 years of age. These are patients for us that are like right on the tipping point of institutionalization.

These are the people who need our care the most, and we need to be able to get the access to the care that they need good aggressive outpatient therapy services. A little bit about the size and scale of the practice. We're greater than 5,000 clinicians now in 38 states plus D.C. From a volume perspective and scale, greater than 4 million visits annually right now. We provide care in residential communities, homes, patient centers as well as 1,500 -- greater than 1,500 senior living community assisted living across the nation. You can see our patient satisfaction score of 98% Care. You can see kind of our service mix -- we -- when we entered the market, we're very disruptive. We're not traditional brick-and-mortar outpatient therapy services. We provide a different product 28 years ago when Dr. [indiscernible], our founder, really came upon kind of like, boy, there's a niche here that's needed in the health care market.

And that's great in many ways as we sought to scale this organization. But on the flip side, there really weren't a lot of like out-of-the-box solutions to the problems that we have to be able to have a remote workforce of this magnitude, right, doing what it is we do. So why did we engage with CareCloud, right? We had an EHR system, a legacy system, a bit antiquated, but we really needed solutions for the front end and back end of the organization. So we'll flip to the next slide. These legacy systems just simply weren't sufficient -- we were looking for a partner that could handle a lot of different things and technology enabled and was nimble.

We were different in this space and disruptive. We needed someone to come into Fox and actually help evaluate the journey that our therapists were going on, evaluate the journey that our patients were a part of and help to answer some of the challenges that we face. The electronic health record itself was okay, but we really didn't have the capabilities from a tech perspective on the front end or the capabilities on the back end to really handle RCM at the scale and size that we needed. So you can see here on the outset of the partnership, CareCloud came in and really identified with us in conjunction with us, in partnership with us, a series of deployments to help us really on the front end. And I think that circle there represents a lot of different things. If you look in the far right corner, you'll see just one note, [indiscernible], just an example. right, an application and app that all our therapists have that allows us to sort of like geo monitor where they are, track it with relation to where the patients are, optimize patient scheduling, right? You can imagine the efficiency of trying to figure out where a patient lives and get your therapists nearby and can go to see it and then make that scheduling all efficient.

That simply didn't exist in our space and the partnership with CareCloud that's one example of a great number of others that this partnership has been able to execute on. Really, what I was seeking is if we -- an out-of-the-box solution from a front-end experience in our practice through the end. And what the CareCloud partnership allowed us to do is stay with the electronic health record that we were comfortable with, which was growing in their own right, but answer the solutions on both the front and back end very effectively. And has allowed us since 2017 to scale fairly significantly. to the next slide here. So just some supporting metrics around the performance of the practice as we scaled. You can note -- I think you were saying you're seeking to get inside 5% denial rate with us right now, we're at 1.5%, which is pretty good. I know we were greater than 5% before this relationship.

I'm not proud to say that, but it was what it was. Electronic claims, 99.96% essentially claims are untouched at this point. I know we're trying to get to that 100% mark, and I think we eventually will. First pass reduction, as you talked about earlier, 9.74% and ERA adoption, 98.95%, all significant in the space with respect to our performance on the RCM side. From a growth perspective, since the engagement, our admissions are up 166% practice collections up 12%. So really great partnership with respect to answering the call for who can come into [indiscernible] and really help us support our ability to touch more lives and serve the patients who need us.

So what's the future look like? We'll go to the next slide. Obviously, we're talking a lot about AI. We're putting AI in our clinical notes currently in the process of doing it, but really trying to leverage AI as the team has already discussed on the RCM side. There's even more opportunity there for us. There's certainly probably more opportunity on the front end on the scheduling and communication with patients and clients, which you guys already do a lot of the communication with our patients. I would say the thing that my team got the most excited about recently was the example of looking at appeals management using this AI technology.

And understanding CMS regulations, right, in such a way that it could look at the appeal, help us develop the appeal and actually write letters without having to involve manual individuals kind of writing and creating let. You can imagine the efficiency creates for our team. So I know our team is extremely excited about the AI focus that the team has, and we're already seeing great performance enhancements as a result of it. In closing, under Stephen Snyder's leadership, CareCloud has been an outstanding strategic partner to Fox and lockstep with Hadi Chaudhry, Chief Strategy Officer; and Crystal Williams, President. Our team has been consistently impressed with the support and relationship we have maintained with their executive team from the very onset of this relationship, which was super important to me.

At FOX, culture is very important. Our mission is to believe in the strength of people to live better longer. It's our job to providers with the tools necessary to take care of our aging population. So my expectation within our practice is anyone from CareCloud is expected to be part of the team and accountable as part of that team to one another for the success, the spirit of team. That brings me to [indiscernible], Division President, SVP of Integration and frankly, Fox employee 5001 as far as I consider it. I'd be remiss if I did not highlight the critical role that Lorraine has played in fostering and managing this relationship and partnership with frankly, Surgical Excellence. Lorraine is FOX. She's part of our team and bleeds Orange. This is obvious in our interaction and in her interface with our executive team. Steve and team, you have Jim and Lorraine. I'm certain you're aware of that. I've said this many times already, we wanted a partner here in this relationship, not a vendor, and CareCloud exemplifies that to not just myself, to the entire team here at Fox that we both view this as a partnership.

So I commend our executives for speaking to this in a similar fashion. Even when we have had challenging conversations about future paths, they assure me the right people are aligned with our executive to drive our growth. And CareCloud understands our success is their success. Said simply, CareCloud is part of our practice. To that end, congratulations to CareCloud and yet another exciting milestone. We look forward to the continued growth and success of Fox and CareCloud as we together seek to provide the highest quality functional primary care to help our age population live better long. So thank you.

So we're also honored to have with us today Dr. [indiscernible] Masoud. He's Chairman and CEO of [indiscernible]. Dr. Masoud has spent over 35 years advancing patient care, driving innovation in home and infusion therapy and helping improve outcomes for patients.

Good afternoon. I will try to go through some of the points. And part of the presentation I have may not be that detailed about what we are doing with CareCloud because I have a whole lot of members at [ KabaFusion ] who deal directly with CareCloud team and Lorraine has done a wonderful job with cabo as well. So thank you for mentioning her. So just a quick background on me. I came to USA in 1981. I was 19 years old, so about 45 years now, 45 years old. I started my schooling at University of Southern California in Los Angeles. In 1988, I got my doctor Pharmacy.

In 1990, I was working at Gram Maran Hospital, where I came across an excellent neurologist, and we started the very first 2 patients with neuromuscular diseases. At that time, we call it progressive muscular atrophy, which was eventually diagnosed as CIDP. And those patients, they were both wheelchair bound and they got up and they started walking. So that was really my start of home infusion industry. Then 1992, I quit [indiscernible] Hospital, and I started my first company called [indiscernible] Healthcare. Within 12 years, I took it to about $100 million in revenues. I brought in the investors and decided they wanted somebody else as the CEO. So I exited and a new CEO came in, didn't do a very good job. But eventually, the company was sold to Walgreens. Then my second company, I home infusion pumps.

So first company was home infusion, providing patient care at home. Second company was building infusion pumps, and that in 2007, I sold it to Baxter International. And then 2010, I started KabaFusion. So Kabafusion is same like Crescent Healthcare was. So I started in Los Angeles in 2010. That was my first pharmacy. And now in 2026, we have 33 offices nationwide. We provide patients at home with intravenous drugs and nursing, highly skilled nursing. We have about 2,000 employees in the company. And recently, we had a change in partners. So the new partners coming in valued the company at $2.2 billion. So that's pretty much our growth in the last 15 years. But we are looking at another 4, 5 years and valuation to at least double. So we are looking at $2 billion to $4 billion. So this is really the background on CA Fusion, how I came across CareCloud was very interesting. I was introduced to Mr. Hadi [indiscernible] of Pakistan.

At that time, I didn't know much about CareCloud. But when he told me about the civic engagement of Mr. Hadi in Kashmir area of Pakistan, which is a very kind of poor side of the country, I came from the bigger city called [indiscernible], never visited Kashmir about it. So when I heard about what CareCloud was doing with the local population, I was very impressed with the civic engagement that they were doing. And I knew that if somebody is that dedicated to human being, I can trust them with my business until 2023 when CareCloud came, we didn't ever contract out any services. So really CareCloud opened the doors for us. When it came in, we were having a little difficult time with our revenue cycle management, and that's how we started our relationship.

So when CareCloud came, our bad debt was about 6%. So imagine the dollar amount or 6% of that dollar amount was huge. With CareCloud help from the intake side to the billing, we were able to reduce the bad debt to 1.5%. And we believe that very soon, it will be 1%. So if we are around 1%, we'll be very happy. So CareCloud has done a great job. We started with 5 employees. We're not very sure what will happen. Now we have more than 100 employees. And the way I'm looking at it, CareCloud number of employees will continue growing. The team, not just for myself, but the investors, they have trust in CareCloud and what they have done so far. So I think that there is a lot more that we can do.

We are in the process of acquiring another company. The revenues are about $600 million, $700 million. So I know that CareCloud work will go more. And hopefully, that will bring good revenues to CareCloud and scaling of the revenue cycle at KabaFusion. So CareCloud team, they have done -- besides RCM, they have done intake, benefits verification. They have really driven efficiency and they have scaled KabaFusion's revenue cycle operations to a point where we really look at CareCloud first before we think about hiring other people. So that drop in the bad debt has led to us looking at what else CareCloud can do for us. So we're looking at on the technology side, what CareCloud can do. And we are looking at our home infusion industry, and a lot of people may not know what home infusion industry is, even though it has been around for 40-plus years.

We provide patients at home with nursing and intravenous drugs. And if you really look at it, patients who need those infusions and if they have to go to a doctor's office or if they have to go to the hospital setting, number one, it is very costly. Secondly, patients have to really go physically to some place to get it done. Here, we send the drug, we send nurse and all those kind of things. So even though the industry is 40-plus years old, the technology is very primitive in our industry. And when it comes to pharmacy software for the home infusion part of it, is not really up to standard, and that's where I talked to and Stephen, and we are looking at really developing a new software, and I think it will be the state-of-the-art for our industry.

I asked them to name it [indiscernible], which is my daughter's name. So hopefully, we will develop over the next 9 months to a year if the laws agree and sign the contract. And I know that is the hardest part of this deal, but it's going to happen soon. So my feeling is that once we have that software up and running, we will really revolutionize the home infusion industry and not just for us, we will be able to go and offer the software to other home infusion companies and revolutionize everything because right now, it's very primitive like I told you, the billing and collection alone, we were losing 6% of our revenues, and that was a big chunk and thanks to CareCloud, we were able to cut it down to 1.5%. So all in all, we are very satisfied with CareCloud, their personal relationship with us, with our employees. They're always there.

One day, I was sitting in the Board meeting and something came up and I said, oh, we don't have a solution for that. Let me call Hi. I call him, he came on the Board meeting and we found a solution. It was simple, how to take the credit card and build the patient score. We didn't have that system in place after 40 years of running the company. So we are really looking forward to CareCloud to be an integral part of KabFusion and not just in revenue cycle management, but from the beginning, from the intake to pharmacy to nursing, to billing and collection to denial management. I think that there is a whole lot of things that CareCloud can do for us, and I'm very proud of our relationship. Thank you very much.

Well, I really appreciate it. I can't thank you enough for our customers taking the time out of your day to come here and share with you -- share with the broader attendees a little bit about your experience. So thank you very much for all 3 of you, really. It means a whole lot to us. Thanks a lot for the team. Q&A. We'd love to answer any questions that you might have. And we may pull up other members of the team upon the nature of the question, but who wants to go first?

When I look at that and I see things like the note taking and stuff, there's so many companies out there that are using AI like diagnostics and medical things. Is that something that you would get involved in where like look at the notes and look at your history and your blood test and we think this person whatever -- or is that just like not a thing that you would.

That's a great question. It actually is exactly what it does today. So it listens to the patient doctor conversation. And when the conversation ends, it first of all, takes out the noise and like how was the weather, how was the commute and stuff like that. Then take that converted note to your point, go into the history of the patient, whether it's the social history, whether it's the medical history, medication and everything, take that merge that together and then suggest and recommend the next diagnosis and the procedures for the...

It does that.

It's actually touch with the doctors.

And that's where we have started -- there is always an initial adoption. challenge can it really work? It's an AI, but we're not replacing the doctor. We're just recommending and suggesting the full chart. And at the end of the day, it's the doctor who has to review and sign off on it. they have an ability to edit anything so they can do it if they want to. And if we think if everything is okay, they click on it, save it and move on.

Would you work with a company that like our experts and whatever that is like to bring in their product of your product?

I don't know maybe if I'm not misunderstanding the question. For us, this product is not a bolt-on. This is part of the workflow. This is how we design it. We don't see a reason to be integrating any other company's product into the system. But if there is anything niche that comes in, which we don't have, we will be open to it to integrate into our platform. But at the moment, we don't see the need of it at the moment.

And I hate to put you on the spot address that. We're not worried about that.

At this point. I mean the adoption for things that work is very risk for. What I think they're developing here is an assisted tool that helps to give us insight and information. It doesn't supplant or replace what we're doing here at this point. There may be a time in the future where that could happen. But the reality is I think it's a little way off that despite a lot of other people not about [indiscernible]. Despite the press. I think we're ways off from that. But yes, I think -- I hope that's helpful. But it really -- it helps to focus things a little better in terms of the discussion with the patient so that it gives us a little bit more of a summarized insight and some suggestions. Excellent. Very good.

Comment on the competitive environment, like who else you're buying up with and why you guys win? For sure, for sure.

So I think if you think about the competitive environment, think about companies like ECW, think about companies like [indiscernible], AdvancedMD, these are all some of the companies that we're regularly competing against. And if you think about our overall solution set, you can break that down a little bit further. So you have EHR practice management and patient experience management. So you have the SaaS solution. But then we also have the product suites or the solutions that we provide end-to-end revenue cycle management, coding, credentialing and so on and so forth, which are all still powered by technology, many of them powered by AI. But ultimately, there are services that are ultimately provided that involves some element of human capital as well. And then separate apart from that, we have the AI solutions. So to be able to answer that, we have to kind of break down each one of those. But I think the closest competitive from a competitive perspective would be [indiscernible] and [indiscernible]. Question is why are we winning? Why do we win in those sorts of scenarios? And maybe I'll let Chris jump on that. But I think that oftentimes, it's in terms of the comprehensive nature of our overall solution. So you don't need 3 different companies come to the forefront with different solutions that have to be all integrated. So especially for a smaller or medium-sized practice, we have a fully integrated solution that incorporates the service that's end-to-end and incorporates the entire technology suite, the clinical part the practice management part and also the revenue cycle that makes all work from a collections perspective.

So I think it's a fully integrated nature of it, also a price point. We're one of the lower price points in the industry. And I think the third thing would be the ability to -- on top of all that to provide an AI solution that likewise is fully implemented. I think Dr. Holt was referring to before being able to provide Stratus AI or being able to provide other AI solutions that are fully integrated.

Looking for productivity from AI. But then there's the cost of AI are kind of expensive for some. How do you think about the cost of it versus the benefit you're going to get?

I'll get started -- so then Hadi can do a better job than I can in terms of answering this question. But I'll give you just a high-level framework, and then we'll go down and then Hadi can jump in. So if you think about it, we have 150 AI team members as part of our AI center of excellence. So you say, okay, well, what's the expense associated with that? Well, the overwhelming majority of those team members are working at our offshore location where the cost of labor about 1/10 of the cost of someone who has the same sort of education, the same training, but it's situated here in the U.S.

So we use that labor cost advantage to our advantage so that arbitrage yields us dividends as well. That's part of it. Another part of it is it continues to compound so that candidly, our initial thought process was build an AI center of excellence with 500 people, about 1.5 years ago. But it didn't take long as time goes on to realize you can do far more and you can create more and compounds because of technology itself helping you do more. So from a coding perspective, a large percentage of the overall coding and the upgrades and the like with regard to our existing platform is now done through -- certainly through AI-assisted coding, [indiscernible] coding and the like.

So if you take that same principle and then think about it from an AI perspective, for us, we have a highly cost-efficient workforce would be one. And secondly, for us, we're embedding this AI into our platform. It's making our overall platform more sellable. It's increasing the overall retention rate because it's a more usable multifaceted platform. And then we have a separate revenue generator through the AI solutions.

Given and everything is basically -- these are the same 2 strengths we have been talking from day 1 and our narrative for being public, this global workforce, cost competitive intelligent, the same that Steve mentioned and the second one is this proprietary technology. So the 2 together, we are building AI to support our own entire end-to-end platform. We're not building an AI solution to go and try to integrate and sell it to someone else primarily. So that will be much more expensive than just operating into our own proprietary technology. So the 2 together, Steve mentioned, that's how we believe [indiscernible]

Yes. Early in the presentation, I think it was you talked about your acquisition targets and the evaluation process you go through and what you want to see out of them. How do you go about that? Do you use an outside firms of some kind to help you with that evaluation? Is it all internal? What's the process?

It's really all internal. We've done 25 to date, and it's been a pretty consistent team. We're evaluating it from an operational standpoint, from a financial standpoint, from a technology standpoint. So we pretty much do it all ourselves.

Got it. Got it, Dan. I was wondering just with the AI development of new tools across the business...

I was wondering if you can talk a little bit about the process in terms of doing concept to deploying new products, what that cycle looks like in terms of length and then how you just like organize the 150 personnel you have across these products?

So I think the real first thing with our advantage is we are building AI solutions for the industry, for the business that we already have been running for the last 25 years. So we are not stepping into a line of business where we are just developing an AI application without understanding the industry for which the AI is being developed -- we know the pain points. We understand the workflows for the decades of experience into this. We know the deficiencies of the system. We know the pain points of a front desk as an example. So that's where that knowledge, that experience is helping us, but there is our advantage when we come and develop those applications. So that's from where these ideas are coming from front desk, that's the first administrative bottleneck for a practice. Patient engagement, another bottleneck. Administratively, prior authorization in the specialty space, that's one of the serious bottleneck. So we are trying to hit those initial major pain points and the low-hanging fruit in terms of the major pain points in the industry and trying to come up with those solutions. And in terms of managing the 150 people, we have been already managing the 400-plus, 450-plus ITD team members. So we have been -- we have an organizational structure that already existed, the same organizational structure extended into the AI.

Makes sense. And then specifically on the Stratus AI, the front desk agent. I was wondering how you price those contracts? I know you talked about getting to about $1 million in call volume annually under the current contracts. I was wondering if that's priced on a call based on usage or it's just annual and it handles all that structure.

Steve, would you like to take that?

Yes, sure. So you'll appreciate the fact that Stratus AI was launched about let's say, 6 months ago, 8 months ago roughly. So I say that only to say that the answer I'll give now may change in 6 months or a year. Right now, we're pricing that Stratus AI as a per completed call fee. So for every completed call that's managed by Stratus AI, there's a fee associated with that. So it's a per call fee to answer your question. But we're exploring some different models associated with that, too. So...

And as far as acquisitions, are you only looking for companies where you can add customers? Or is there anything out there in technology land that you think might help?

Good question. So technology-wise, we're not looking for -- we're not looking to acquire technology because we have 450-plus IT R&D team members. So we've really built the entire platform from the ground up, and we'll continue to do that with regard to AI. We'll continue to do that with regard to patient experience management, practice management and the like. So we're not buying technology. We're looking for companies that have recurring revenue customer bases. So companies that have already built a book of business, flood are struggling to operate at the scale and size that they're either at right now or having difficulty experiencing growth and the like. So if you think about the majority of the companies we've purchased have been revenue cycle management companies, medical billing companies. But we've also purchased, as an example, medSR was a technology player that gave us an entry point into the inpatient hospital IT market. We've acquired some other technology players, but the threshold requirement is that the technology can't be simply technology. It has to have a customer base with recurring revenue element associated with it.

So to follow up on that, what do you do once you acquire it so that in 3 or 4 quarters, you get to those hopefully 30% contribution...

So we do a variety of different things. The first thing we do is we make sure that in the overall structure and the negotiation of the transaction, we feel comfortable with the overall valuation. We understand the customer base, and we have a high level of confidence that the core customer base will remain on through the transition and the like. So the first thing we do, we make sure that we essentially price it and structure it properly. The second thing we do from the perspective of the overall business, and most of these businesses are operating at breakeven or some of them are operating at a loss. So to your point, how do we take that company that's operating at breakeven or even at a loss? And how do we have a level of confidence that we can transition that to a company that's operating at 25%, 30% contribution margins within 3 quarters. 4 quarters for a larger company. The way that we do that is we -- from the staffing perspective, we look at the overall staff. We understand what the key team members are doing, and we make sure that we provide incentives to those team members who have an ongoing customer-facing relationship and who are positioned to be able to grow the business. So if we think about Dan as an example, Dan was freed up from his day-to-day grind, the day-to-day operational work and the like that he was focused in on and just freed up to do what does a phenomenal job at, which is really interact with the customers, look for new opportunities in the existing base and also expand not only the wallet share of those customers, but also expand into new relationships, so net new opportunities that he purs. So we identify those individuals who can really help us continue to solidify that customer base and then to grow that customer base. But individuals who are handling more of the kind of more mundane type activities. Candidly, artificial intelligence is increasingly stepping in and honestly handling a lot of that, a lot of those appeals, a lot of the data processing and the like. If it's not technology in our particular model, then we're leveraging our offshore team to be able to manage it. So we're able to reduce the expenses and then also able to grow revenue by rolling out our technology and by making sure relative to those customers that they have not simply as good of a service as before, but our goal is how do we add value to those existing relationships, how do we add value through technology and through increasing the overall size of the team and the throughput of technology...

Just on M&A continuing of ask a couple of questions. I was wondering if Obviously, the recurring revenue is the big focus. I was wondering if you show preference towards expanding in new areas such as like the emergency department or other like specialties such as like hearing, you built out that department. I was wondering, do you have a preference between like entering new verticals per se versus building existing or how you view...

Not exactly. Having said that, certainly, I'll use a scenario just as an example. We never -- I don't think we ever seriously explored getting into the hearing health space for a variety of reasons. One of those reasons being candidly, the average ACV per new customer signed is not all that huge. So it tends to be on the lower end of that market. But we saw what Dan was doing, we said, so there is actually an opportunity here if we approach the market a little bit differently. So there's an example of a new approach in terms of a new area within this industry that we're able to do business in that we hadn't followed before. But having said that, I think the truest answer is, no, we're not specifically looking for any particular verticals or the like. Frankly, if a company is providing services to the health care space, especially if it's revenue cycle management, but also it could be consulting services, it could be compliance services, a whole variety of other related services to RCM, and it's a recurring revenue base. And we think we have -- we can add value with our technology and team, and they're a good candidate for us.

I do have a few questions from the chat. I think we maybe have another 5 or 10 minutes, if you wouldn't mind. Awesome. I'll just pick a few for the sake of time. First one is from Jay asking, will you do buybacks eventually? The stock is very cheap right now. And also, it's a 2-parter. Do you have any plans to invest in OpenAI or partner with another AI company?

Today, we leverage a variety of other technology on the back end, including OpenAI, and we leverage Google and the like. We're not exploring any sort of partnerships like that in the near term. That would be the answer to the second question. For the first question, 100% agree, the stock price is really cheap, and we certainly advocate buying some shares in the open market for investors who are interested in our story, are aligned in terms of our overall strategy and think that we're doing something that's worth investing in the space. We're not currently though, investing that as a use of capital. For us, we see those opportunities relative to the use of capital to be more in acquisitions and organic growth and continuing to grow the business.

Okay. And I'll just pull maybe 1 or 2 more. This one is from M. He asks, given the temporary margin compression in Q1, at what exact point in 2026 will the operational leverage from your AI deployments outpace your R&D and integration spend?

Okay. Do you want to?

I would say probably later in the year, obviously, as we get into the third and fourth quarters, I think that's what was saying as we're developing AI and rolling it out, I think you'll see margin expansion in the second half of the year.

And I think probably also makes sense to think about that in terms of the overall medSR acquisition. So we closed the medSR acquisition during August of last year, the end of August of last year. So medSR had a total of 7 or 8 different technology platforms. All of those platforms had pretty significant tech debt, which from a valuation perspective as a buyer that worked to our advantage. But by the same token, there was a lot of work to do, and there continues to be some work to do relative to those platforms. So we had some additional spend associated with those platforms. But the lion's share of that first phase of that spend is really behind us. And I would say from a -- just from an ongoing perspective, you should certainly expect on a go-forward basis for that spend to be reduced certainly relative toSphere.

Awesome. And I think this -- we'll go ahead and do the last one. Dan, this is more for you. So if you wouldn't mind, I get it up there as well. But this is from [indiscernible], and he says, Dan's acquisition story was interesting, jumping from a client a month to almost a client a week, significantly expanding domestic footprint. How much of that growth is driven by CareCloud's broader footprint, creating cross-sell opportunities versus added operational bandwidth, allowing Dan and the team to spend more time on business development? And how does that dynamic compare with and relate to other acquisitions you've made? So it kind of sounds like maybe a little bit of Dan, a little bit of...

Sure. Dan, do you want to go first?

I would tell you that the majority of that has allowed me to do the business development and focus as opposed to looking more wanted to know about the cross-selling opportunities. There's a lot of cross-selling opportunities that's coming our way with what CareCloud has. But because we're a unique office space in the hearing health care industry and what CareCloud currently offers is sort of disjointed because we are separate. Our clients use separate platforms. And until we get to that next level here shortly where we can start taking like a Stratus and attach it to an outside source, that will start to develop and bring us more of that revenue source. But currently, it's the business development side that has been the focus on what we've done because of the fact that we know the industry and we haven't had that reliability on the CareCloud component yet and it's coming, and that's going to open up a whole new channel of opportunity and revenue. And Steve, you definitely have the next part of that.

No, I think Dan hit it all. The only thing I'd add is maybe more generically or more generally, which is the role that AI is playing in this space. AI, of course, is an important component in terms of the overall organic growth. So that's key. Increasingly, customers are looking to understand what your platform is leveraging AI before they make a decision with regard to EHR, practice management, patient experience management. But that same impact is really being felt in the acquisition space because companies that were operating at or near breakeven and had already built up portfolios of customer relationships, they're recognizing the fact that AI is on the cusp of being able to completely reshape the overall industry, not just the health care industry, but reshape their part of the health care industry. They feel the pressure and they're looking for partners like us. In fact, it's Dan and I spoke about initially, which is the impact that AI is having on business owners from the perspective of accelerating their overall exploration of partners to look to and to consider acquisitions with [indiscernible]

And for those who weren't able to get to your questions in the chat, please feel free to reach out directly to the Investor Relations contact, and we can address those. But with that.

Excellent. Well, I just again want to thank everyone who's here today. thank our customers for coming here and sharing our story. Thank our analysts for coming here, your thoughtful questions and taking the time out of your day to listen to our story. The team for sharing your -- the role that you're playing in terms of the overall operations for Bill and the support from the Board. It really means a lot. For everyone from live stream, again, we really appreciate you taking some time. And if you have any questions, don't hesitate to send us an e-mail, we'd be happy to circle back. Thanks so much.

Good morning, ladies and gentlemen, and welcome to CareCloud, Inc. First Quarter 2026 Results Conference Call. [Operator Instructions] This call is being recorded on Thursday, May 7, 2026.

I would now like to turn the conference over to Brendan Covello, Legal Counsel. Please go ahead.

Good morning, everyone. Welcome to CareCloud's First Quarter 2026 Conference Call. On today's call are Mahmud Haq, 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 21 of the Securities Exchange Act of 1934 as amended. All statements other than the statements of historical facts made during this call are forward-looking statements, including, without limitation, statements regarding our expectations and guidance for future financial and operational performance, expected growth, business outlook and potential organic growth and acquisitions.

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 of these terms. 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 to 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 Act Commission, where you will find a more 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 first quarter 2026 earnings presentation. Please visit our Investor Relations site, ircarecloud.com. Click on News and Events, then click IR calendar, click on first quarter 2026 results conference call and download the earnings presentation. Finally, on today's call, we may refer to certain non-GAAP financial measures. Please refer to today's press release announcing our first 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 our CEO, Stephen Snyder. Stephen?

Thanks, Brendan, and good morning, everyone. I'm pleased to report that the first quarter of 2026 marked a strong start to the year for CareCloud, with revenue growth of 13%, the broadest product portfolio in our history, accelerating commercial traction in our AI platform and a transformational simplification of our capital structure that we executed shortly after quarter's end. We delivered the kind of momentum we expected entering 2026, and we are reaffirming our full year guidance with great confidence.

Let me start with our top line numbers. For the first quarter of 2026, we generated revenue of $31.3 million, up 13% from $27.6 million in Q1 of last year. On profitability, GAAP operating income was $1 million for the quarter and GAAP net income was $900,000 as anticipated, both lower than the prior year's quarter, driven primarily by increased amortization of acquired intangible assets and integration costs associated with the Medsphere acquisition. Adjusted EBITDA, adjusted net income, and adjusted EPS were each essentially in line with the prior year, and we generated $2.4 million in free cash flow. These non-GAAP measures are the cleaner read on our underlying operating performance, and they show a business that is holding margin while we absorb a material acquisition. Norm will walk you through this in more detail in a few minutes.

Next, I'd like to spend some time on our capital structure, because what we executed in April represents the most significant simplification of CareCloud's balance sheet since our IPO. On April 13, we closed a new $50 million credit facility with Citizens Bank and Provident Bank, comprised of a $40 million term loan and a $10 million revolving line, which replaced our previous $10 million Provident Bank facility. In parallel, we also put an at-the-market or an ATM equity facility in place, not as a financing we plan to lean on, but as a flexible just-in-time tool we can deploy on opportunistic terms if and when it makes sense for our shareholders. The day after closing, on April 14, our Board elected to redeem 100% of our outstanding Series B preferred stock. The redemption is scheduled for May 15, and we have already prefunded approximately $41.6 million of the new credit facility to satisfy it.

Let me underline what this means in plain terms. Together with the conversion of approximately 80% of the Series A preferred stock that we completed in March of last year, the full redemption of our Series B preferred stock effectively removes the preferred equity overhang that has shaped our capital structure for many years. We are exchanging high-cost preferred dividends for lower-cost senior debt, dramatically simplifying our story for investors. And we are doing it with zero common shareholder dilution from the redemption itself. This is more than a balance sheet exercise. A simpler capital structure broadens our investor universe, particularly among institutional investors who have historically been deterred by complex preferred equity stocks, improving the visibility of common shareholder economics and it lowers our weighted average cost of capital. In short, the structure of the company now aligns with the way we run it as a focused, profitable, growing healthcare IT technology platform.

Turning to our acquisition portfolio. The integration of the transactions we completed in 2025 is progressing well. Through Medsphere, we entered the inpatient hospital market and significantly expanded our addressable market, adding the #1 Black Book-ranked Wellsoft emergency department information system, the CareView inpatient EHR, ChartLogic for surgical specialties, Marketware for physician relationship management, offline for hospital supply chain and managed IT services. That portfolio took us from ambulatory first to care continuum.

On MAP App, our HFMA partnership is opening hospital finance conversations that would have taken years to build organically. Hadi will walk you through how we're layering AI-driven recommendations on top of MAP App's benchmarking foundation. But the strategic point is quite simple, MAP App identifies where hospitals underperforming and our RCM and AI capabilities demonstrate how to fix it. That is a powerful combination and 2026 is the year where we believe we'll scale it. As to our AI platform, it is really no longer a vision, it is a product line in the market with paying customers and measurable results. StratusAI Desk Agent, our agentic AI phone receptionist, reached full commercial release in December and is scaling. Across early adopters, the platform is now handling approximately 75% of inbound calls automatically, bringing Front Desk staff to focus on more complex patient needs and lifting the throughput of every practice that deploys it.

Our AI Center of Excellence launched in April of last year is fully operational and is the engine behind everything in our AI portfolio. In a moment, Hadi will walk you through the 3-track framework we use to apply AI across the business inside our own operations embedded in the products our clients already use every day, and as a stand-alone AI solution. And where each track stands today? The point I want to leave you with is that the believed addressable market for our AI Front Desk capability alone exceeds $4 billion in the United States, and we are bringing it to the large provider customer base that already trust CareCloud with its core clinical and revenue cycle workflows. That integration advantage is hard to replicate.

Our 2026 growth strategy is unchanged and fully on track. First, we are actively cross-selling stratusAI and our RCM services to our existing ambulatory client base. Second, we are penetrating the Medsphere installed base of hospital and health system customers with our RCM and AI capabilities, creating a multiplier effect on sales efficiency. Accordingly, we are reaffirming our 2026 guidance. We continue to expect revenue of $128 million to $132 million, adjusted EBITDA of $29 million to $31 million, and GAAP earnings per share of $0.20 to $0.23, which would represent more than a 100% increase over our 2025 EPS of $0.10. Our confidence in this outlook is grounded on our continued growth in our RCM business, accelerating AI revenue contribution from stratusAI and the synergy of cross-sell opportunities from our 2025 acquisitions, each of which we expect to ramp meaningfully through the back half of the year.

A brief word on operational efficiency. We are also deploying AI inside our own back office and consolidating overlapping systems from our 2025 acquisitions, and we expect that work to be an ongoing source of margin improvement through 2026 and into 2027. Hadi will go deeper on this as the first of his 3 AI tracks. Stepping back, this is exactly the kind of quarter we wanted to deliver to start 2026. Revenue grew by 13%. Our AI platform in in-market and scaling. Our acquisition portfolio is contributing as planned. Our integration work on Medsphere is well underway, and we have used the early weeks of the second quarter to fundamentally simplify our capital structure, closing a new credit facility, putting an ATM in place and announcing the full redemption of our Series B preferred stock.

The underlying business, recurring revenue, cash generation, the customer base, the product road map is moving in the right direction, and we are reaffirming our 2026 guidance, and we are entering the rest of the year with more capability, more scale and more momentum than at any point in our history. We are a profitable, growing company with a clear AI strategy and the operational discipline to execute on it. I look forward to sharing our progress with you throughout the year.

With that, I'll turn the call over to Hadi Chaudhry, our Chief Strategy Officer, who will provide more details on our AI strategy and product road map. Hadi?

Thank you, Steve, and good morning, everyone. Before I get into first quarter, I want to remind everyone of the framework we are using to apply AI across CareCloud, because everything I'm about to walk you through fits inside that framework. And I think it's the clearest way to understand both what we are doing today and what compounds over time.

As Steve mentioned, we are pursuing AI along 3 parallel tracks. The first is back-end cost and efficiency optimization, where AI applied inside our own RCM, financial, and administrative operations to do the work we already do for our clients, but faster, more accurately and at a much lower cost. The economic outcome shows up in the margins. The second is embedding AI into our existing customer-facing applications, our EHR, practice management, patient engagement and benchmarking platforms, bringing AI inside the products our clients already use makes them smarter, stickier and more valuable without asking clients to buy something new. The outcome shows up in retention, expansion and the strength of our existing revenue base.

The third is building entirely new AI products for discrete, high-value problems in healthcare operations. StratusAI Front Desk Agent and cirrusAI Notes are the 2 most visible examples today with AI prior authorization, AI-assisted medical coding and additional clinical documentation capability and active development. The outcome is new revenue lines as those products mature. These 3 tracks are not separate strategies competing for resources, they are the same investment compounding 3 different ways.

Let me walk you through where each one stands at the end of Q1. On the back-end track, we continued in Q1 to apply AI across our own RCM financial and administrative operations. This is a track that gets the least external attention, but it is where AI is creating its most measurable near-term impact. Inside our RCM operations, AI is reducing claim errors, improving documentation accuracy and increasing first pass acceptance rates to payers. Across our administrative and financial functions, it is helping our internal teams handle higher volumes with the same headcount. We are also adopting AI-driven tools across the software development life cycle such as code generation, code review, QA and testing and application design. This is the same productivity revolution the broader software industry is going through, and we are participating in it as a deliberate strategy.

Over time, we expect 2 compounding outcomes, higher code quality and meaningfully more output per engineer. For a company shipping across the wide product surface EHR, RCM, practice management, patient engagement, benchmarking and an expanding AI portfolio, that engineering leverage matters. How we measure progress on this track matters. We are not just tracking lag indicators, outcomes like acceptance rates and denial ratios that tell you what already has happened. We are actively monitoring lead indicators, the signals that predict revenue cycle performance before it shows up in the financials. How early errors are caught, how many claims are pre-validated before submission, how much human intervention is required for a claim and how effectively our AI predicts denials, so that rules can be configured proactively, not reactively. These upstream metrics are where AI creates its leverage, and they are what give us confidence in where the trajectory is heading, not just where it has been.

Our longer-term ambition is to set a new industry benchmark, zero-touch claims, a fully automated workflow where AI handles intake, validation, submission and follow-up with minimal human intervention, allowing billing teams to focus on acceptance rather than routine processing. Q1 was a quarter of measurable progress on the underlying lead indicators that bring that vision closer. The second track is bringing AI into the products our clients already use every day. Our existing suite, EHR practice management, patient engagement, benchmarking represents thousands of touch points per client per day. Everyone is an opportunity to make our software more intelligent without asking the client to buy something new. This creates more lasting AI value than launching a new product, because it improves everything already deployed with customers.

In Q1, we continued deepening AI inside these platforms, improving how our EHR surfaces relevant information at the point of care, making our practice management system more predictive about scheduling and intake, and enhancing the analytical depth of our benchmarking capabilities. None of this is a new product announcement, it is continuous embedded improvement to platforms our clients are already paying for. The most successful version of this track is one where AI inside the product is invisible to the user. They simply find that the software is doing more for them than it used to. We will share specific results as they become meaningful to disclose.

This track is also where leverage on our acquisitions plays out. Some of the platforms we brought in through Medsphere and the MAP App serve a different client segment than our ambulatory base, hospital systems, health networks and emergency departments. The AI work there is in earlier stages, but the principle is the same. The platforms get more value and AI is part of them. And that value accrues to clients already on them, that is leverage we paid for, and we are working through it methodically. The third track is the one that gets the most public attention, new stand-alone AI products for specific high-value workflows. This is where stratusAI Front Desk Agent and cirrusAI Notes live and where our development pipeline continues to expand.

Let me start with stratusAI Front Desk Agent, our agentic AI Front Desk solution. We continue to sign new business in Q1, almost entirely from within our existing client base, exactly the motion we wanted at this stage. Our priority right now is not maximizing contracts signed, it is making sure every agent we sign is implemented well, completes its trial successfully and earns the right to expand inside this account. Expansion means more agents per client, additional functions, extended coverage hours and broader used cases. This is the curve we are deliberately working depth before breadth, because it produces durable standing revenue rather than a flurry of signed contracts that don't convert into real used case. Within the Desk Agent suite, stratusAI Voice Audit continues to play an important complementary role, giving practice administrators visibility into both AI handled and staff handled calls. Some clients adopt Voice Audit alongside Desk Agent from day one. Others bring it on later as their AI deployment matures. Either way, it deepens our broader stratusAI footprint inside the account.

Turning to cirrusAI Notes, our ambient documentation product. Notes continues to be an entry point for many providers into the cirrusAI family on ambulatory side, where it serves the most acute pain point in clinician stay. What I want to highlight this quarter is the integration efforts underway to bring cirrusAI Notes into the inpatient platforms we acquired through Medsphere, opening the door to AI-assisted documentation inside hospitals and health systems, a different clinical workflow, user and buying center that ambulatory market we have served historically. This is exactly the cross-pollination between our acquisitions and our AI portfolio that we described as the multiplier effect when we closed Medsphere. Beyond Front Desk Agent and Notes, our pipeline continues to advance. AI prior authorization, AI-assisted medical coding and additional clinical documentation capabilities are all in active development inside the AI Center of Excellence and bringing those to market is a goal for this year. We will share more on each as they get closer to client readiness.

Let me close by coming back to the 3 tracks framework, because I think this is where the strategic picture comes together. A company pursuing only the third track, only new AI products is making the bet that depends entirely on those products achieving scale. A company pursuing only the first track, only internal cost optimization captures margin, but doesn't differentiate its products. A company pursuing only the second track only bringing AI into existing apps strengthens retention, but doesn't create new revenue lines.

CareCloud is doing all 3 at once, and the reason that matters is that each track derisks the other. Internal AI improves our economics regardless of how fast the new AI products itself. Embedded AI strengthens our existing revenue base regardless of how fast we capture new markets. And new AI products give us a path to entirely new revenue lines built on top of an installed base that AI is already making stronger every day. Q1 was a quarter where each of those 3 tracks move forward. Each one continue to compound in the direction we have been describing and together, they form the durable profitable AI strategy we are executing.

With that, I will turn it over to Norm to walk you through the financials. Norm?

Thanks, Hadi, and thanks, everyone, for joining our call today. As you've just heard, we had another strong quarter and are moving forward with our plans for the remainder of the year. In particular, we are continuing to generate sufficient amounts of free cash flow, and in May, we will liquidate all of the outstanding Series B preferred shares. Revenue for the first quarter of 2026 was $31.3 million compared to $27.6 million for the first quarter of 2025. Recurring technology-enabled business solution revenue was $23 million during the first quarter of 2026, up approximately $5.3 million from the first quarter of 2025, while the non-recurring project-based professional services revenue from ASR decreased approximately $2.9 million.

First quarter 2026 GAAP net income was $922,000 as compared to net income of $1.9 million in the same period last year. This is our eighth consecutive quarter of positive GAAP net income. Although our revenue has increased, we are continuing to integrate the Medsphere acquisition and eliminating duplicative costs. As a result of the 2025 acquisitions, there was also an increase in the amortization of intangibles and transitional costs impacting net income. We generated $2.4 million of free cash flow for the first quarter of this year compared to $3.6 million last year. Again, the decrease resulted primarily from the Medsphere integration.

Adjusted EBITDA for the first quarter 2026 was $5.4 million or 17% of revenue compared to $5.6 million in the same period last year. Adjusted net income was $2.2 million or $0.05 per share compared to $2.3 million in the same period last year, calculated using the end-of-period common shares outstanding. As of March 31, 2026, the company had approximately $3.9 million of cash and net working capital was $2.6 million, both of which have slightly improved since year-end. We are fortunate that we have not been affected by any of the tariffs that were instituted or are contemplated since tariffs are being applied to physical goods, not services.

Even better, the revenue of doctors' practices, our customers should not be significantly affected by the tariffs or the uncertainty of potential recessions or inflation, so we don't anticipate the pressure of reduced demand for our services. The conflicts in the Middle East and Ukraine have also not impacted us. Our financial position remains strong as the company continues to take a disciplined approach to spending, ensuring our investments are aligned with clear returns. We are encouraged by the progress we've made and remain focused on executing through the remainder of the year. We look forward to reporting strong results for the remainder of 2026.

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

Thank you, Norm. CareCloud is a profitable growing company. The full redemption of our Series B preferred and last year's Series A conversion mark a major step towards a simpler capital structure and a stronger story for our investors. We are also focused on leading the industry transformation and our AI strategy positions us well for what's ahead. Thank you to our employees, clients and shareholders for their continued support.

Operator, please open the line for questions.

[Operator Instructions] We will now take our first question, and this comes from the line of Allen Klee from Maxim Group.

To start with in the in-house like patient software segment, talk a little about your traction and the plans to -- it seems like you have a good strategy there, but it seems like this could be a big driver for the future. So if you could maybe just highlight kind of what you're focused on strategically?

Thanks for joining. And that's a great question. And I think I'll use this as an opportunity to dive into a little bit details about whatever road map or the strategy is when it comes to the Medsphere product. So as you know, this acquisition brought us a comprehensive suite of platforms across the inpatient and hospital ecosystem, as example, Wellsoft in emergency, and CareView for inpatient EHR, Marketware for physician relationship management and Healthline for hospital supply chain. Across all 4, we are executing on a deliberate value creation strategy with 4 parallel work streams.

So first one is, if you think about the technical debt remediation and modernization. So as Medsphere had paused most enhancement activity going into the acquisition. So the foundational catch-up has been substantial. So Wellsoft, CareView, they are being modernized from tech client desktop application to fully cloud-based SaaS platforms. To put one number on it, just if you think about on the RCM side only, we are closing more than 50 carryforward items this quarter to bring desktop and cloud to functional parity. Similar work is running in parallel across the entire portfolio.

Our second one is the net new capability development, moving these platforms well beyond where we acquired them on Marketware alone, more than 20 new features are in active development this quarter, including our flagship integration with PracticeMatch, that's the leading physician talent network that automates candidate data transfer and streamline recruiter workflows. On the supply chain side, we have already delivered web-based mobility for warehouse workflows, and we are building exploration and implant log tracking as an example.

Third is our cross-portfolio integration with the existing CareCloud suite. Wellsoft is being integrated with -- our patient experience platform, which will bring a seamless patient engagement layer into the emergency department. And we are also connecting Wellsoft to CareCloud's RCM infrastructure to extend RCM capabilities into urgent care.

And the fourth one is our AI infusion. The clearest example is integration of cirrusAI into Wellsoft emergency department workflows, NBN clinical documentation and care setting that has historically been an underserved AI innovation, as we believe. We are also embedding AI into market player to surface intelligent candidate recommendation, turning it from a relationship management tool into AI-powered recruitment engine. So -- and in addition to that, there's a lot of other things from the ONC, from the compliance standpoint, ONC Cures Certification, SOC 2 Type 2 for EPCS migrations and the like. So we are -- our focus at the moment is just making sure we go through these 4 tracks simultaneously. And we already -- the teams have started to reach out to the customers where we can bring the value and then start cross-selling and upselling activity. I'm sorry for the long answer, but I just want to take this opportunity to give you the -- our strategy and the road map for the entire acquisition of Medsphere platforms.

No, that was great. In terms of some of your new AI products like stratusAI, Voice Audit and Notes, can you just give us a sense of how customers have been how -- any feedback you've been getting?

Right. So first of all, there has been no lack of interest at all from the customers. We are getting a lot of traction. We continue to close the new business from the existing client base throughout the first quarter. And as you know, our strategy has been the first -- after the signing of the contract, they will be going through an initial implementation, then there is a 30-days trial, then many times the customers say just because of the first AI adoption resistance, you would say, or okay, we'll only implement refill agent as an example. So we go through those one by one. And as I mentioned in our -- in my remarks earlier, our goal today is that every single customer and the agent is implemented, complete the trial successfully and start growing beyond just the trial and keep adding and activating more agents. So to answer your question, we are getting a lot of tractions, there are no issues in terms of finding the interest and rolling the contracts. We are right now laser-focused on implementation and expansion.

My last question now is you showed your pipeline of AI prior authorization, AI-assisted medical coding and additional clinical documentation. How do you think about what the opportunity is here?

And for both of those, and just to give a little more detail for -- as an example, for medical coding, we already have started to deploy it internally, because, as you know, we provide the medical coding to many clients today. So internally, we have -- and that will be used as a proof point and maturing and refining the product to achieve the right accuracy levels. And then we can start expanding and start selling into the other -- the client base where we are not doing the coding as an example today.

And then also, this also helps us define further our cirrusAI and Notes application because our long-term vision is it should be a one cohesive starting from this Notes. The coding should be done automatically right off of that. So that's our -- and these pieces will eventually will be integrated into that entire workflow or the stream. Same case goal for the prior authorizations since we also, in addition to the AI-based development on our side, we also need to complete our integration with external clearing houses and the payers, so we can submit those authorizations electronically. We are -- we have completed significant milestones in terms of completing the testing -- in the testing environment. We are in the initial phase of picking up the pilot customers to deploy this AI authorization.

So if you think about both of these 2 things and authorization as an example, I don't have the industry numbers in front of me at the moment, but this is one of the most -- one of the pain points, especially in this healthcare industry for specialties such as orthopedics, for neurosurgeries, where you really need these authorizations to be done accurately on time before the procedure is done. And then in the hospital space on the Medsphere, we see a tremendous opportunity there once these products get materialized.

And the next question comes from Lisa Thompson from Zacks Investment Research.

I have a few questions for you. First off, I would like to -- for you to discuss the Series B redemption. I know it's a good thing and you enumerated some things that were positive. But could you talk about the timing? Why now?

For sure. Thanks for the question, Lisa. So as you mentioned, this probably is the single biggest capital structure simplification in our history, at least as a public company. The Series B redemption removes a preferred equity overhang that has existed since shortly after IPO. But it's a good question like why now? Why is now the right time to make sure that we remove that overhang. And at least from our perspective, there are 3 main reasons, that first is from an operating performance and free cash flow. We've really reached an inflection point. We're generating the cash to support a senior debt funded redemption. So we have the capacity, we have the capability to do it. That's one.

Second would be from a credit market perspective, we're able to secure an attractive senior debt facility with attractive economics for the $50 million facility. So the ability to move forward with very attractive senior debt economics was another key driver. And then the third thing was the fact that we're eliminating the preferred dividend burden and that really frees us up from a cash flow perspective to redirect the capital to growth investment, M&A and common shareholders.

So from a strategic perspective, there's been a long-standing complexity in our equity story that really is driven by the preferred. It's something that we've heard in the majority of the conversations we have with institutional investors. And we really believe that this transformation allows us with zero dilution to create an investment in the common shares that's far more attractive for a broader base of investors. So for a variety of reasons, we thought the time is now, and we're excited about being able to move forward with that redemption. Of course, the official redemption will occur later this month on the 15.

Okay. Great. And as far as the ATM goes, you said that you would be using it when appropriate. Could you give us some examples of when that might be appropriate?

Sure. So think about the ATM, Lisa, as really simply a tool that gives us optionality, not as a plan. So our default posture has always been and will continue to be a very conservative posture. We've intentionally refrained from issuing new common equity opportunistically, and we'll continue to do that. So it's not a general financing source. When would we consider it, we really consider it in a few different circumstances. One, we would consider it to fund attractive accretive M&A transactions where the strategic value is moving quickly, and we can do so without dilution. So that will be one to be able to fund M&A transactions.

The second would be if the stock price is trading at a level where we're able to opportunistically derisk the balance sheet, we'd consider it then. And then maybe a final point would be more so to support clear growth objectives, so investments with a defined return profile. So those would be really the 3 main reasons why we would use it. But again, I think it's important to remember that, again, our posture has been very conservative. We'll continue to be very conservative. We'll only use the proceeds when there's a clearly accretive acquisition or one of these other criteria is met.

Okay. Great. That makes sense. I was wondering if you could just talk about where you are with AI versus competitors? Are there other people out there with the same capabilities? And in that respect, what functionality is AI giving you that's most helpful for the salesforce when they're going out versus the competition?

Absolutely. Yes I'll let Hadi dive into that a little bit more, but the common theme that we hear is that AI incorporated into the fully integrated system, which includes EHR, the practice management system and patient health experience that, that AI that's embedded within that ecosystem or that environment is really what unlocks the utility, the usefulness of AI. So really where we've been focusing from a sales perspective has been on things like stratusAI, where there's a very clear picture from a healthcare provider's perspective in terms of the return on that investment. So they're able to see a very clear path towards return on that investment and to free up their internal resources to focus on higher-value activities. So really stratus, I think, exemplifies one of the key areas where our healthcare providers are increasingly appreciating the value of AI and are embracing it.

But I'll let Hadi address that more broadly.

Sure. And as Steve mentioned, Lisa, there is no shortage of point solution AI vendors. They are targeting individual workflows in healthcare. As an example, you might find very -- many vendors who are providing the NBN solutions. Other, you will find vendors who are providing something similar to what we are -- with our stratusAI Front Desk Assistant Agent as an example. But what really differentiates us is it's a full embedded integrated solution versus a bolt-on solution, which most of these vendors are providing. So as our overall AI strategy is a 3-pronged approach. So back-end optimization to embedding the AI into the existing platform, as Steve is saying. And the third one is where stratus is the NBN solution of our stratusAI most application and the like. So those are the ones from the net new revenue perspective, where the sales team is focusing on.

And we have a follow-up question from Allen Klee from Maxim Group.

You stated that you're reaffirming your full year guidance and the first quarter is seasonally always the lowest quarter and then you had integration-related items during the quarter. But I thought it was important how you said that margins you expect to improve throughout the year. Could you comment a little on how you think about how that progresses and any seasonality?

Sure. Thanks, Allen. And I'll let Norm jump in. But to your point, quarter one is always a seasonally weak quarter for us, because of deductibles and other factors. So that not only compresses our overall top line, but also from a profitability perspective, you see the impact associated with that reduced revenue. I'll let Norm talk about it in a little bit more detail.

Sure. Thank you, Steve. Thanks, Allen. So we bought the Medsphere Corporation in August of '23. So even in the first quarter, we were eliminating some duplicative costs with some transitional costs and integration costs. So we're trying to get through those, sometimes duplicative personnel. Also, you see in our purchase price allocation, a significant amount of intangible assets that are amortized. We amortize them on a double declining balance. So that amortization is going to decrease over time. So as we digest the acquisition, we removed the duplicative costs and get past the transitional cost, we would expect margins to improve.

Allen, maybe one other thing to think about -- sorry, Allen, I was just going to mention one other thing to think about in terms of margins for the year is as we progress through the year, as you get -- especially as we get into the back half of the year, you'll see those margins continue to grow. And if you just think about the kind of the typical average month, we believe that free cash flow will exceed $2 million on average during any given month. If you kind of counterbalance that against our obligations, the obligations associated with the loan will result in payment obligations of about $1 million, $1.1 million.

So from a cash flow perspective, we have that cash to continue to reinvest in attractive M&A opportunities. We have the cash to continue to invest in other growth opportunities and the like. So even from an ATM perspective, that's why we truly say that ATM is really -- it's really a tool to give us optionality down the road, really not a plan. Obviously, we went public at -- or you may recall, we went public at $5 per share. There really have to be a very compelling reason to sell shares at less than that. It doesn't mean it's impossible, but there has to be a very compelling thesis to sell shares at something lower than $5. And that's because we're generating this cash flow internally. If you think about the acquisitions last year, we closed 4 total acquisitions, and those acquisitions were paid with zero common shares, so zero dilution and paid from our internally generated cash flow. So we continue to see really that being the proper path for us as we move forward.

That's great. Is it available any of the terms on the new credit facility?

Yes, Allen, we filed an 8-K and in there is all of the exhibits as required in the 8-K, so you can see all the related documents.

Great. And maybe the last thing, just you guys had a history of like you could buy things with a better cost of customer acquisition cost than doing it organically. But now it seems like you have the opportunity on both sides. In terms of like having a salesforce to go after the opportunities you have, how are you approaching that?

So from a salesforce perspective, our salesforce today is multiple times what it was at the same time last year. So I would say it's grown probably 3x compared to what it was last year at the same time. So that sales team is focused on cross-selling within our existing base. And as our existing base continues to grow through the Medsphere acquisition and through organic growth and through the other acquisitions, then the overall size and scope of that cross-selling campaign continues to increase. So that team is really primarily focused on sales activities that are oriented towards expanding the wallet share within our existing base. So I think that will continue to be the case.

But I think what we have now is now we have really 2 prongs from the growth strategy perspective that we're comfortable with, one prong being the organic growth and the other prong being the acquisitive growth of the inorganic growth. From a cost perspective, you'll recall that the acquisitive growth for us generally is somewhere between 0.6x and 1x revenue is the cost of acquiring portfolios of customers, recurring revenue relationships in the context of these acquisitions.

In our space, of course, the industry average is somewhere between 1.2x to 1.4x revenue for that same cost of acquiring that customer relationship. We're attempting to do that at a lower cost. And again, we're -- you'll appreciate the fact that we're relatively early in terms of this overall expansion. So the jury is still out, quite candidly, in terms of whether we can do that at a comparable CAC to our acquisitive growth, but that's what we're endeavoring to do. We have the capital to push forward and to give that a full try, and which is what we're doing. So with the capacity, with the capital to be able to invest in that 2-pronged strategy, that's what we're doing. And we believe that the results will bear out the wisdom of that overall approach. But again, time will tell.

And there are no further questions that came through at this time. I'll now turn the call over back to Norman Roth for any closing remarks. Please go ahead, sir.

Yes. Thank you, everyone, for attending our call today. Hope you have a great day. Thank you.

Thank you. This concludes our conference call for today. Thank you all for participating. You may now disconnect.

Greetings. Welcome to CareCloud, Inc. Fourth Quarter 2025 Results Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Brendan Covello, Corporate Counsel. Please begin.

Good morning, everyone. Welcome to CareCloud's Fourth Quarter and Full Year 2025 Conference Call. On today's call are Mahmud Haq, 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 21 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 and operational performance, expected growth, business outlook and potential organic growth and acquisitions.

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 of these terms. 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 to 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 other reports filed with the Securities and Exchange Commission, where you will find a more comprehensive discussion of our performance and factors that could cause actual results to differ materially from those forward-looking statements.

For anyone who dialed in the call by telephone, you may want to download our fourth quarter and full year 2025 earnings presentation. Please visit our Investor Relations site, ir.carecloud.com. Click on News and Events, then click IR Calendar, click on Fourth Quarter and Full Year 2025 Results Conference Call and download the earnings presentation. Finally, on today's call, we may refer to certain non-GAAP financial measures. Please refer to today's press release announcing our fourth quarter and full year 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 our CEO, Stephen Snyder. Stephen?

Thanks, Brendan, and good morning, everyone. I'm pleased to report that 2025 was a transformational year for CareCloud, marked by exceptional financial performance, strategic acquisitions that expanded our market reach and a successful launch of our flagship AI platform. We delivered results that underscore the strength of our business model and validate our vision for the company's future. In particular, I'm pleased to be able to talk today about our revenue growth, the remarkable acceleration of our profitability and free cash flow, the current status of our capital structure, the significance of our 2025 acquisitions, the evolution of our services offering and AI platform, our market position and growth drivers as we enter 2026 and our guidance for the year ahead.

First, let me start with our top line numbers. For the full year 2025, we generated revenue of $120.5 million, representing nearly 9% year-over-year growth. In Q4 specifically, we achieved revenue of $34.4 million, up nearly 22% year-over-year, demonstrating accelerating momentum as we entered this year. Importantly, we raised our revenue guidance twice during 2025 and still exceeded the final target, a pattern that reflects the underlying health and predictability of our recurring revenue streams.

Second, as to profitability, we reported GAAP net income of $10.8 million for 2025, a year-over-year increase of more than 37%. We achieved earnings per share of $0.10, marking our first full year of positive EPS since our 2014 IPO, a remarkable milestone that reflects our multiyear transformation to sustainable profitability. In Q4 alone, we posted GAAP earnings per share of $0.04. Adjusted EBITDA expanded to $27.5 million with a 23% margin, up more than 14% year-over-year. But perhaps most importantly, we generated $28.6 million in GAAP operating cash flow for the full year, a 38% increase year-over-year and $8.7 million in Q4 alone, up 66%.

Non-GAAP free cash flow reached approximately $20.5 million for 2025 compared to $13.2 million in 2024 and representing growth of more than 500% from 2023. This dramatic improvement in free cash flow generation has been transformational to our financial flexibility and strategic optionality. It enabled us to resume dividends on our preferred shares at the beginning of 2025 to begin paying double dividends on our Series B preferred stock starting in 2026 to address the accumulated arrearages and to fund multiple acquisitions during 2025, entirely from free cash flow generated during that year.

Third, as to our capital structure, during 2025, we completed the conversion of approximately 80% of our Series A preferred shares into common. The conversion eliminated more than $7 million in annual dividend obligations, and we fully repaid our Provident Bank credit line by year-end, entering 2026 with 0 drawn on our credit line. Reducing the complexity of our capital structure remains a core priority.

Fourth, we made significant strides during 2025 on the M&A front. We completed multiple transactions during the year, each strategically selected to expand our capabilities and market reach. These deals were all executed at less than 1x revenue multiples, funded entirely through the free cash flow we generated during 2025 and resulted in 0 common shareholder dilution. The most significant of these was our August acquisition of Medsphere Systems, which brought us into the inpatient hospital market.

Through Medsphere, we added a suite of ambulatory and inpatient software products, including the #1 Black Book ranked Wellsoft emergency information department system. This was a watershed moment for CareCloud. We evolved from an ambulatory first to a care continuum company, able to support the full patient and clinician journey from outpatient clinic to emergency department to inpatient bed through the revenue cycle and into the supply chain. Integration is well underway.

We are incorporating our AI tools into the platform, and we are already seeing new customer wins under the CareCloud umbrella. We also acquired MAP App from the Healthcare Financial Management Association, or HFMA, in October of last year, alongside a long-term joint marketing agreement. MAP App is a hospital benchmarking and performance analytics platform used by leading hospitals and integrated delivery networks to measure and compare revenue cycle metrics. MAP App identifies where a hospital is underperforming and CareCloud's RCM and AI provide the solution, a sales motion with built-in urgency and quantifiable ROI that we intend to scale in 2026 and beyond.

Through Medsphere and MAP App, we now serve hospital systems and health networks, creating a natural cross-selling runway for our AI solutions and RCM services. Our 2026 growth strategy centers on penetrating these newly acquired health system customers with our RCM and AI products, exactly the kind of operating leverage that justifies these strategic investments.

Fifth, we have continued to position ourselves as an emerging leader in health care IT. We recognize that the health care technology market is at an inflection point. AI adoption is moving from pilot programs to production deployment and providers are actively seeking partners who can integrate AI across their clinical and administrative workflows. We are operating in a market with a multibillion-dollar addressable opportunity in the U.S. alone for our AI front desk assistant and that is just one application in our broader AI framework.

We launched stratusAI Front Desk Agent in December 2025 and are already seeing strong early traction. Hadi will provide more details on our AI products and road map. But from a business perspective, our combination of domain expertise, distribution and clinical data gives us a competitive moat that is extraordinarily difficult to replicate.

Sixth, let me turn to our market position and growth drivers. In 2026, we will continue to leverage our dual platform footprint in ambulatory and inpatient markets to drive organic growth and acquisition synergies. Our primary growth vectors, ambulatory cross-selling, deeper hospital penetration of existing relationships and AI monetization represent a compounding opportunity that positions us for durable growth.

As we have noted in prior calls, strategic acquisitions have been a cornerstone of our growth historically, and 2025 marked the year where we reignited that momentum after a multiyear pause during which we refreshed our financial foundation, achieved sustainable profitability and launched our AI Center of Excellence. We were patient because we wanted to acquire from a position of strength, and that patience has paid off. All of our 2025 acquisitions follow the same disciplined playbook, acquisition purchases non-dilutive to common shareholders, structured to maintain balance sheet flexibility and priced at attractive valuations of 1x revenue or less.

What is particularly exciting now is that AI is further accelerating our acquisition opportunity set. We expect to remain active in the M&A front in 2026 and beyond as we identify complementary targets that extend our reach and can benefit from our AI capabilities.

Seventh, turning to our guidance for 2026. It reflects continued growth with accelerating profitability. We expect revenue of $128 million to $130 million and adjusted EBITDA of $29 million to $31 million, reflecting margin expansion. We further expect GAAP EPS of $0.20 to $0.23 per share, which would represent an increase of more than 100% over 2025. We have set this guidance at levels that we believe are achievable and consistent with our track record, we intend to execute against it with discipline.

As we reflect on 2025, we are humbled by the progress we have made across every dimension of our business. We exceeded previously raised revenue guidance. We delivered our first year of positive EPS as a public company. We generated exceptional free cash flow growth, increasing more than 500% over the last 3 years. We executed strategic acquisitions without diluting shareholders. We launched a transformational AI platform that is already gaining market traction, and we strengthened our market position through acquisition-driven diversification.

Together, they represent a fundamental repositioning of CareCloud as a full continuum health care technology platform with AI at its core. We believe these achievements position us to deliver sustained value creation for our shareholders, clients and employees. We are entering 2026 with more momentum, more scale and a stronger balance sheet than at any point in time in our history, and we look forward to achieving our objectives in 2026 and beyond.

With that, I'll turn the call over to Hadi Chaudhry, our Chief Strategy Officer, who will provide more details on our acquisition strategy and product road map. Hadi?

Thank you, Steve. Good morning, everyone, and thank you for joining today. Steve has walked you through an outstanding financial year. That performance gives us the platform to do something really important, invest aggressively and deliberately in AI. My job today is to take you inside that effort, what we have built, what's working and where we are taking it in 2026. In April 2025, we launched CareCloud's AI Center of Excellence, a fully operational production-grade initiative with one mandate, build AI solutions that create measurable impact for health care providers.

This is not a research lab or a pilot program. It is the engine behind everything in our AI portfolio. We built this capability in-house because AI and health care cannot be generic. It must be trained on the right data, integrated into real clinical and administrative workflows and designed around health care-specific compliance and accuracy. The AI Center of Excellence brings together engineering, data science, clinical informatics and product development to deliver exactly that.

Let me walk you through what we have launched. Our flagship AI product of 2025 is stratusAI Front Desk Agent, which reached full commercial release in December. It is an agentic AI phone receptionist, fully autonomous, operating 24 hours a day, 7 days a week, ending patient calls with natural human-like conversation. The scope of what it manages is significant, appointment scheduling, rescheduling and cancellations, real-time insurance eligibility verification and demographic capture, prescription refill routing, lab results, inquiries, referral requests and automated confirmations and reminders.

When a call requires human judgment, it escalates intelligently to a live staff member. The system is deeply integrated within our EHR and practice management platforms, which means there is no manual data reentry and no third-party middleware between the AI and the patient record. Our results speak for themselves. Dr. Holden, owner of the Lung Center shared that stratus Desk Agent is now handling nearly 80% of their inbound scheduling-related calls, freeing his staff to focus on more complex patient needs.

There is a fundamental shift in how our practice operates, and it is exactly the outcome we designed this product to deliver. Alongside Desk Agent, we have stratusAI Voice Audit, our conversational intelligence platform, gives practice administrators and hospital operations leaders visibility into every patient phone interaction, whether handled by AI or by the staff member. Voice Audit delivers call monitoring, quality scoring, trend analysis and patient sentiment insights. It shows what's working, where workflows are breaking down and where there are opportunities to improve the patient experience.

Beyond patient access, we are applying AI deeply across revenue cycle management, the core of our business. AI capabilities are already active throughout our RCM operations, helping reduce claim errors, improve appeals and documentation accuracy and increase first pass acceptance rates with payers. Importantly, AI also allows us to shift from relying primarily on lagging indicators such as denial rates and days in account receivable to monitoring leading indicators earlier in the revenue cycle.

By identifying potential issues at intake, eligibility verification, coding and claim creation, we can prevent problems before a claim is ever submitted rather than reacting after a denial occurs. Our longer-term ambition is to establish a new industry benchmark, zero-touch claims, a fully automated workflow where AI manages intake, validation, submission and payer follow-up with minimal human intervention. This enables billing teams to focus their expertise on true exceptions rather than routine processing.

We are also developing AI-driven prior authorization capabilities, which represents one of the most significant administrative bottlenecks in the health care today. Prior auth delays drive revenue leakage, delay patient care and consume enormous staff time. Our approach is to use AI to predict authorization requirements, pre-populate supporting documentation and route requests automatically, reducing turnaround time and the rate of initial denials.

We are also actively developing an AI-assisted medical coding product. Accurate coding is foundational to revenue cycle performance. Errors at that stage cascade into denials, delays and lost reimbursement. For clients using CirrusAI Notes, the 2 products work in concert, taking a clinical encounter seamlessly from documentation through accurate coding assignment.

On the clinical side, CirrusAI Notes addresses documentation burden, a primary driver of physician burnout. It captures the clinical encounter and generates structured notes for physicians to review and sign off on rather than author from scratch. It is live and in use today, and it earns clinician trust precisely because it does not try to replace physician judgment, it removes the administrative burden around it.

I want to spend a moment on the intersection of our acquisition strategy and our AI capabilities because I think this is one of the most compelling and underappreciated aspects of our story. Each platform in the Medsphere portfolio is embedded in real clinical operations, serving workflows previously outside CareCloud's reach, and none of them had a dedicated AI team behind them until now. Clients across this portfolio will also benefit from access to CareCloud's ambulatory AI-enabled solutions as our integration work progresses, bringing the full capability of our platform to bear across the care continuum.

Our AI Center of Excellence is actively scoping AI enhancements across this portfolio, prioritizing the highest impact use cases in supply chain efficiency, emergency department workflow and clinical documentation. As those enhancements are completed and validated, they will be made available to the clients. To be clear about sequencing, the new clients we are winning today are selecting these platforms on the strength of what they deliver right now.

Our contract win with Memorial Hospital in Ohio, deploying HealthLine for supply chain management is a strong signal of that underlying demand. As our AI capabilities for HealthLine mature, Memorial and clients like them will position to adopt these enhancements when they are ready. The same logic applies to Wellsoft. In January, Affinity Urgent Care in the Houston Galveston area selected Wellsoft, bringing our emergency grade documentation system into the urgent care settings for the first time.

With approximately 11,000 urgent care facilities across the United States, this channel represents a meaningful expansion of our addressable market. The AI layer for Wellsoft is in development. And when it is ready, it will strengthen our competitive position in the channel considerably. On the AI side, MAP App becomes more powerful over time. Our road map adds recommendations that go beyond identifying a revenue cycle gap to quantifying its dollar impact and surfacing the automation that closes is fastest, moving us from analytics to action, a conversation hospital CFOs are very receptive to.

The HFMA relationship also gives us distribution into hospital finance leadership that would take years to build organically. And combined with our AI road map for MAP App, we have compelling reasons to be in those conversations in 2026. Looking ahead, I want to be direct about what 2026 means for our AI strategy. We have spent 2025 building the AI Center of Excellence, the stratusAI product suite, the acquisitions that expand our platform. 2026 is the year we execute.

Let me walk you through our priorities. First, we will continue expanding our AI product suite across the full platform. StratusAI Desk Agent and Voice Audit are live and scaling. CirrusAI Notes is deployed and being integrated across the Medsphere suite. AI-assisted coding and prior authorization AI are both targeted for release this year.

Second, we will execute on the cross-sell opportunity at the product level. Steve outlined the strategic case Medsphere relationships, RCM capabilities, HFMA partnership. My focus is making sure the AI product are ready to support that motion. CirrusAI Notes integrated into MedSphere suite, the coding product available to hospital billing teams and stratusAI Desk Agent deployable in hospital patient access centers.

Third, we will continue building the AI Center of Excellence, deepening our clinical data sets, developing proprietary models trained on health care-specific workflows and partnering selectively with AI leading infrastructure providers where it helps us move faster. The principle is always the same. Health care native AI built with right guardrails delivers better and more defensible outcomes than generic AI applied to health care settings.

Fourth and most importantly, we will hold ourselves accountable to client outcomes, not just product releases. The measure of AI investment is not feature ship. It is revenue improvements, denial rate reductions, time saved per provider, patient satisfaction scores. Those are the metrics we track internally, and they are the ones we will be sharing with you as our AI business matures.

I want to close with the thought on why this moment is meaningful. Providers across every care settings are seeking purpose-built AI that integrates into the systems they already use. This is precisely what we are building across ambulatory, emergency, inpatient and hospital billing operations. CareCloud sits at a rare intersection, long-standing relationships with over 45,000 providers across the care continuum, a fully integrated platform spanning EHR, practice management, RCM and our supply chain and hospital systems and a dedicated AI organization focused entirely on solving health care operational problems. We are profitable, growing company with a clear AI strategy and operational discipline to execute it. I look forward to sharing our progress with you throughout the year.

With that, I will turn the call over to Norm Roth, our Interim CFO and Corporate Controller, who will walk you through the detailed financial results. Norm?

Thank you, Hadi, and thanks, everyone, for joining our call today. As you have just heard, we had another strong quarter and a strong finish to the year. We have accomplished and exceeded the goals we set for ourselves for 2025. In particular, we are now generating record levels of free cash flow and resumed paying dividends on our preferred shares, which started in February 2025, and we've also been catching up on the dividend arrearage for the Series B preferred stock.

Further, we have fully repaid our Provident Bank line of credit at the end of the year, we had borrowed funds for the Medsphere acquisition and now have the full $10 million line of credit available. We generated $20.5 million of free cash flow in 2025, which we measure as cash from operations less purchases of property and equipment and capitalized software and other intangible assets. In 2025, we began seeking out acquisition opportunities and during the year, we completed 4 acquisitions. We continue to evaluate acquisition opportunities that will be accretive to the company.

The key to growing our free cash flow continues to be reducing expenses and growing our GAAP net income. Fourth quarter 2025 GAAP net income was $2.9 million as compared to $3.3 million in the same period last year. This is our seventh consecutive quarter achieving positive GAAP net income. Revenue for the fourth quarter 2025 was $34.4 million compared to $28.2 million for the fourth quarter of 2024. There was approximately $7.2 million in revenue related to the Medsphere acquisition in the fourth quarter.

Adjusted EBITDA for the fourth quarter 2025 was $7.7 million or 22% of revenue compared to $7.1 million in the same period last year. This was an increase of 8% year-over-year. For the full year, the story is similar. With our emphasis on improving profitability, revenue for the year 2025 was $120.5 million compared to $110.8 million in 2024. Our GAAP operating income was $11.3 million compared to $9.1 million in the same period last year and our GAAP net income was $10.8 million compared to a GAAP net income of $7.9 million for 2024. This was the highest GAAP net income for the company since inception.

Non-GAAP adjusted net income was $14.4 million or $0.34 per share, calculated using the end-of-period common shares outstanding. Since going public, this is the first year we have had positive full year GAAP EPS. For the year 2025, adjusted EBITDA was $27.5 million, an increase of 15% or $3.4 million from $24.1 million last year. Our adjusted EBITDA for full year 2025 was also the highest amount ever achieved by the company. During the year 2025, we generated $28.6 million of cash from operations compared to $20.6 million in the prior year and $20.5 million of free cash flow as defined.

The free cash flow amount of $20.5 million increased by 55% compared to $13.2 million in the same period last year. As of December 31, 2025, the company had approximately $3.6 million of cash. Net working capital was approximately $1.3 million. Now that we have repaid our line of credit, free cash flow during 2026 will allow us to increase our cash balance and build additional cushion in our net working capital. Our financial position continued to improve during the year 2025. We are happy to report strong financial results, no amounts outstanding on our line of credit, cash savings from the Series A preferred stock conversion that occurred in March 2025 and look forward to continuing to report strong results next year.

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

Thank you, Norm. 2025 was a milestone year for CareCloud. We delivered strong profitability and free cash flow, expanded into the hospital market through strategic acquisitions and launched an AI platform that positions us well for the future. What is most exciting is that we are just getting started. We enter 2026 with strong momentum, a stronger balance sheet and significant opportunities to drive growth across our platform. I want to thank our employees, clients and shareholders for their continued trust and support. We remain focused on disciplined execution, innovation and creating long-term value for all of our stakeholders.

Operator, please open the line for questions.

[Operator Instructions] Our first question is from Allen Klee with Maxim Group.

Great quarter. So when I'm listening to your talk, the 2 big themes I'm hearing among others, are your emphasis on AI and acquisitions and how you can combine them and get benefits. So could you expand a little more on how you're planning on kind of monetizing the AI in 2026? You've talked about, but I think it's important.

For sure. Thanks for the question, Allen. So if we step back for those who haven't followed our story so closely, and we'll just talk about M&A first and then we'll dig a little bit deeper into the AI question specifically that you asked. So first of all, from an M&A perspective, the environment today continues to be increasingly favorable. AI is a catalyst for smaller billing companies and for health care companies that focus on delivering software products to the inpatient, also the ambulatory space because they recognize the fact that without AI, their competitive position continues to weaken in the market.

So that's driving more sellers into our pipeline than ever before. Our strategy continues to be one of patience and discipline like we've followed for years. So we wait for an opportunity where the recurring revenue associated with, first of all, it has to be recurring revenue relationships, a portfolio of recurring relationships, revenue relationships. And then secondly, from a valuation perspective, we really target valuations of between 0.6 and 1x revenue. That compares very favorably to the CAC in our space, which is typically about 1.5x or greater revenue.

So we move forward with these acquisitions. And then with regard to that, those base companies that are part of that portfolio, we aim to bring them from a status of typically breakeven or operating at a loss to about 25% to 30% profitability margins typically within about 9 months. So that's the base strategy. You've asked about the AI overlay to that, and that's where I think the whole strategy gets even more interesting. So if we think about the -- just as an example, if we think about the Medsphere acquisition, we've purchased software products that lack that AI capability.

And what our team has been doing is that it's been really focused in on taking the core AI products, taking the CirrusAI product, the stratusAI product, taking the AI Notes applications and the like and then weaving that and incorporating that fully into those platforms. And we expect to have that done within the next couple of quarters. So we're able to take those platforms and to make them increasingly more attractive and platforms that as opposed to being -- as opposed to lagging behind where the space is, will be increasingly leading in their particular markets. So we see some exciting potential there.

The second thing would be if we think about this from the perspective of revenue cycle companies, we now are increasingly using AI and automation to handle a lot of the services that before were being handled by individuals here in the U.S. or members of our team globally. So AI and automation is increasingly assisting with the back-office processing enabling us to further drive margins. And Hadi might have something else to add to that from an AI perspective.

Sure. Thank you, Steve. Just to add on to what Steve has mentioned, our strategy from the AI perspective has been the same and threefolds. One, continue to focus on the improvement and implementation of AI in the back-end operations, whether it's the basic denial management, whether it's the automation of, as an example, the referrals and verification of the benefits and the like, and then there are many others.

And the second is the AI enablement or AI integration into the existing -- the product suite that we have, whether it's our own EHR practice management platform or these other companies, as Steve mentioned that we are acquiring, the team continues to focus on building the AI layer to make it more attractive and more marketable. And then continue to focus on any other net new applications that we can bring to the market such as the stratusAI FDA.

That's very helpful. Then it was encouraging to see like contract wins with new customers. Could you talk a little about how you think -- what was behind the win and how you think that's an opportunity going forward?

Allen, if we think about our overall sales team and our marketing team, we've expanded that team by 2 or 3x. So we have an increased team that's focused -- increased science team that's focused on cross-selling and also these net new opportunities. Having said that, we continue to see the real opportunities this year being primarily in expanding the wallet share of those existing customers, many of whom we've acquired more recently through the Medsphere and the MAP App transactions.

So through those transactions, we've acquired more than 100 new hospitals and health systems who we're working with. And we see significant opportunity to sell more deeply into these existing clients by providing additional services and solutions, AI products, RCM solutions with a real focus on stratusAI and CirrusAI that can add value, and we believe will resonate with this market.

So yes, 100%, we've had some new wins. We talked about a new Wellsoft win. Wellsoft is our recently #1 Black Book ranked EHR that's focused on the emergency departments. So we had a win there. And we also had a win with regard to our supply chain product as well. So we have those new wins, but we really think that the real opportunity will be continuing to cross-sell and upsell the existing customers.

Okay. You also -- my last question, and then I'll jump back in. The front-end AI, you mentioned -- I think you said you launched that in December. How do you think about -- and you said it's a very large opportunity, in terms of how you're targeting that and early indications you get of interest? Any comments there?

For sure. Yes. Allen, you're talking about our stratusAI product. And again, the market opportunity is estimated to be $4 billion plus. And Hadi can provide a little bit more visibility with regard to the early response, but we've really been encouraged by how well that's resonated with regards to our existing base. Our sales efforts are almost exclusively focused on our existing base, and we're getting significant traction there. But over to Hadi.

Thank you. To your point, Steve, so we are seeing a very encouraging early adoption since the launch in -- the commercial launch in December. While we are not disclosing a specific client count at this stage, but our deployment pipeline is really robust across existing ambulatory client base. And we yet need to tap into aggressively into the Medsphere client base that our team has aggressively working towards integrating across the product suite there. So at the moment, we have seen an exceptional interest from our existing client base. So we expect to share more specific adoption metrics as we progress through 2026.

Our next question is from Michael Kim with Zacks Small-Cap Research.

So first, there continues to be a lot of uncertainty in the markets as it relates to AI and the potential impacts on SaaS companies. So just wondering how investors should think about CareCloud's exposure to AI disruption versus maybe being more of an AI beneficiary?

Thanks, Michael. And you're 100% right. The SaaS sell-off in the market has been significant and has not discriminated. It has not discriminated between companies where there really is a more significant risk than those where there isn't. We believe that the companies that are most at risk are the horizontal per seat tools for generic workflows, things like scheduling apps, basic CRM, things like -- companies like that where AI agents can replicate and fully replace that key functionality. That's really fundamentally though, not our business.

And I would focus in particular in the health care space. So health care IT, in particular, has very deep industry moats that those horizontal SaaS players simply don't have. So our AI products, as an example, require rigorous testing, certification, approval by a government-approved entity with regard to -- prior to their initial launch and with regard to any fundamental changes we make to them. So the ability to -- for these new market entrances from AI companies is really very limited.

And we also operate under HIPAA and a whole web of other health care-specific regulations that create substantial barriers to entry. We're also the system of record for our providers from a clinical, financial administrative perspective. And that data all lives within our existing platform. And if we think about more fundamentally, what our clients in the context of leveraging us accomplish really is in large part, shifting their risk to us. They rely upon us to securely host their data to ensure compliance, to most fundamentally produce revenue for the practice.

So our SaaS offering isn't simply a stand-alone tool. It's really the technology backbone that drives our larger revenue cycle management services, which are fully integrated with it. And clients pay us based on the actual value we're producing because the overall majority of our clients pay us a percentage of the practice collections for both the EHR, the technology piece and also the RCM offering. So it's fundamentally different from many of those other companies that are really feeling -- also feeling this impact.

I would say one other thing is we also have more than 25 years of proprietary data across hundreds of millions of claims. And that really -- that information and that data informs our AI products, helps us ensure coding accuracy, manage denial management, benchmarking and the like, all things that new entrants in the market don't have.

So at least as we look at it, Michael, our thought is that with our valuation being 5x, 6x EBITDA, in spite of the fact we're generating, we generated this last year $20.5 million of free cash flow, we really trade -- we continue to trade at a fraction of the valuations of the market in general and candidly, even a fraction of the valuation of other health care IT peers or more than twice that.

So as the market moves away from this more indiscriminate treatment of all companies that are working on some level with AI and we'll move from that to, we believe, a more differentiated approach between those companies that are truly threatened by AI and those for whom AI is actually a key part of their advantage, is a key part of their ability to add additional value to the existing relationships. And we really fall into that second camp.

Got it. Makes a lot of sense. And then second, clearly, earnings power and free cash flow continue to build. So just wondering what sort of assumptions you're building in as it relates to the 2026 guidance ranges and then how you think about sort of the trajectory of growth looking out beyond next year?

So to your point, Michael, for us, 2025 was a milestone year. It was our first positive -- our first year of producing positive EPS since we went public back in 2014. And we've had 7 straight quarters of GAAP profitability and free cash flow alone was up 55% as compared to 2024 up to $20.5 million in 2025. So if we think about just our EPS guidance this year of $0.20 to $0.23, that represents more than 100% growth, and we feel very confident about that guidance.

Now what's driving that overall growth? It's really being driven in large part by the top line growth. And in addition to that, the integration savings with regard to the companies we've acquired and then really driven largely also by the AI efficiencies. And then add to that the fact that we've eliminated through the conversion in 2025, we've eliminated more than $7.5 million of preferred dividend obligations on an annualized basis.

So the increased free cash flow really gives us flexibility to be able to fund M&A for operations. And if you just look at this most recent year, we were able to acquire all 4 companies purely from the cash flow generated during 2025 with 0 dilution to the common shareholders, also able to invest in our AI development and then fully resume payments relative to our Series A and Series B shareholders.

And in addition to that, if you think about this year, in addition to all those things, we're also paying double dividends to clear up the arrearage relative to the Series B. So from a funding perspective, operations is really continuing to drive this flexibility and continues to open up new opportunities for us. And as we think even more broadly beyond 2026 and 2027, we believe that we'll continue to fundamentally expand the overall margin profile as we continue to scale.

Our next question is from Michael Galantino with Chaplin Davis.

Great year, great quarter. Way to finish the year strong. I've been involved with the company for a little over 9 years, and you guys have seen a lot -- we've all seen a lot of changes in the industry. I mean, nobody knew what AI was 9 years ago, and now it's the focus of the company. You guys have done a tremendous job navigating it specifically the last 2 or 3 years.

I have a couple of questions. Steve, one to you on the AI front. Does the AI technology and the efforts of the company, does it save money in terms of operationally? And does it increase the margins? And I know you talked about the SaaS stocks that have been coming under -- or the software stocks that have come under significant pressure in the last 3 or 4 months, if you can address that?

And the second question is, now that you have excess cash flow -- a lot of excess cash flow, which is a great problem to have, what are the focuses for the use of that money if there are no opportunities to make any more acquisitions this year?

Thanks, Mike. I appreciate your questions. So maybe I'll try to address the first one initially. And if you just -- if we think just -- if we kind of back up for a minute and think more fundamentally about the overall revenue of the company, and we go back to, let's say, the fourth quarter of 2024, and we think about our company on an annualized basis. On an annualized basis, we were at, let's say, $110 million roughly.

We think about where we are today, probably $125 million. These are all very rough numbers. So we've increased the overall revenue base by about 14%, 15% roughly. And we've done all that while actually reducing the number of employees that we have today as compared to 2024. So I think that really more fundamentally, at least on a qualitative level, speaks to what we're able to do, and that's in large part driven by AI and automation.

And as the year progresses, I believe you'll continue to see us being able to do far more with far less. So that -- those savings and that margin, we believe, will continue to increase as we move forward. And again, in the whole scheme of things, we're probably in the first inning. So this is really just beginning. We just launched our AI Center of Excellence less than a year ago. So these realities, the long-term realities are yet to be fully seen in the financials.

But again, based upon the numbers as we see them today, we think there's significant opportunity for us to be able to reduce overall expenses associated with the revenue as we continue to grow it. The second thing is with regard to the use of that free cash flow. We continue to look for these opportunities to be able to put that capital to work with regard to these acquisitions. So acquisitions in our space, again, with a focus on being able to acquire companies from our internally generated cash flow ideally. So that would be one key focus.

The second key focus would be continuing to -- as the opportunities present themselves and as our profit margins continue to grow to look for opportunities to be able to continue to enhance our overall capital structure as time progresses. That would be another opportunity that we look forward to pursuing and also continuing to invest in AI, continuing to look for opportunities to expand the existing capacity of our software products and to continue to handle an increasingly larger and larger share of the responsibilities that our clients are handling today.

Just a quick follow-up. When you guys are competing for this business, who is your competition? Who's out there bidding on the same business that CareCloud is right now? Are there much larger firms? Are they smaller start-ups? Or who is our direct competition for this business?

Good question, Mike. I think to answer that, we probably would have to break that into a couple of different areas. So from an EHR perspective, we're oftentimes competing against companies like eClinicalWorks, AdvancedMD and other similar players really focused on being on the ambulatory space. So those would be 2 of the main companies plus athenahealth would be a third company where there's a greater mix and more of a focus on the integrated solution that involves the delivery both of software and also of the revenue cycle management services.

From an AI perspective, the playing field is wider, and it really then depends again on the products. So for instance, our CirrusAI product, that product that's more focused, for instance, on the -- using the audio and the ambient sound from the communications between the provider and the patient in the exam room to really populate the chart, many of our competitors in this space are offering very similar solutions.

Some of those solutions are native. Other solutions are through a third-party application and integrate into their platform. From the perspective, though, of the product that Hadi was talking about before, many of our competitors actually aren't offering that solution. But kind of one company maybe to think about would be SoundHound. So SoundHound has a product that is actually very similar in many respects called Amelia, and Amelia has a lot of that same functionality.

But SoundHound, unlike us, does not have a vertical -- does not have a vertical approach. They're an outside player selling horizontally into this space. So they don't have their own EHR, for instance, in which they can incorporate this product. But SoundHound is also interesting because if we look at their overall valuation, it's about 20x today, 20x the EV. So compare and contrast that with ours, and we think there's a lot of opportunity for investors once the market really understands that we have a proof of concept and we are able to demonstrate real success at rolling out our solution to our existing customer base.

Our final question is a follow-up from Allen Klee with Maxim Group.

Yes. Just on the financials quick thing. In terms of your outlook, any comments on thoughts of CapEx and capitalized software spending? And your guidance overall, does it include any unannounced acquisitions?

Great question. I'll let Norm handle the first part of that, but the answer to your second part of your question is no. It does not include any unannounced material acquisitions.

And I think, Allen, you're looking at CapEx and software, I think if you look at the levels from this year, I think they'd be the same or maybe a little less. So if you wanted to use that as your forecast.

Okay. Maybe just following up in terms of the run rate on operating expenses, to what extent -- I know you're increasing R&D, but do you still anticipate utilizing AI can get you some benefits on the expense side?

Absolutely. We do. We do. And candidly, as we sit here today as compared to a year ago, we believe we can accomplish everything that we're setting up to accomplish in terms of AI, and we can accomplish it with a smaller team than we had initially envisioned. There's been so much progress from an AI perspective in terms of the key models that we use to -- as the girding in our overall framework that we really believe that we can increasingly achieve what we're setting out to achieve from an AI perspective with a leaner team than we had initially envisioned.

So I think there'll be less spending from the perspective of the AI Center of Excellence. And beyond that, the spend that -- the investments that we're making today will really continue to make us more efficient and continue to expand margins.

With no further questions, I would like to turn the conference back over to Norman for closing remarks.

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

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.

Hello, everyone, and thank you for joining us today. I'm Hadi Chaudhry, Co-CEO of CareCloud. It's great to have you with us today. I'm also joined today by 2 key leaders from our team, Aman Haq, who heads our AI initiatives here at CareCloud; and Maaz Siddiqui, who leads product adoption, growth and innovation for stratusAI.

Aman brings deep experience in AI-driven product development, including more than 5 years at Microsoft as a Senior Product Manager working on AI products, Aman works closely with our customers and product teams to ensure stratusAI delivers real-world impact at a scale. Together, we will walk you through stratusAI Desk Agent, our AI-powered front desk solution designed specifically to modernize patient phone access in health care.

Over the next 30 minutes, I will share why the traditional front desk model is no longer sustainable, how AI voice agents address that challenge and what this means in very practical measurable terms for your organization.

Now before we drive into the front desk challenges themselves, I would like to get a quick pulse check from the audience by conducting a quick 2 question poll. It will pop up in your chat window. This will help frame the rest of the conversation and also give you a sense of how your experience compares with others on the call.

The first question is about where you are today with AI? When we say AI, we mean anything from documentation and analytics to patient engagement or operational workflows. Go ahead and select the option that best reflects your current situation.

So this is exactly the mix. We typically see some organizations are already using AI in meaningful ways, and others are piloting and many are still in exploration phase.

Let's go to the next question, please. The second question gets to the heart of today's discussion. What's the biggest challenge you are facing when it comes to inbound phone calls? So let's wait for the results.

Okay, perfect. This is, again, very consistent with what we had across the industry.

So with that context in mind, and based on what you just shared, let's take a closer look at what's actually happening at the front desk today and why these challenges continue to surface across practices and health systems.

On this slide, let's talk about the reality facing from front desk today. Phone calls still remain the #1 access channel for patients even as portals, mobile apps and digital tools continue to expand. But when patient needs something important, such as appointments, refills, test results, reassurances, they still pick up the phone. So at the same time, staffing shortages, burnout and turnover at the front desk continue to rise. Training is constant, experience levels vary and coverage gaps are common. The outcome is predictable, which is long hold times, missed calls, frustrated patients and very real revenue leakage. So I'm sure many of you have experienced this first hand and same was reflected by the results of this recent poll.

So why hasn't the traditional model been able to keep up? So on the next slide, this slide explains why the traditional front desk model is no longer sustainable. Historically, the response was simple, hire more staff or ad IVR systems. But human only front desk can't absorb unpredictable spikes in call volume and IVR often frustrate patients without resolving the issue. Patients don't want to press buttons or repeat themselves. They want to be heard, understood and helped quickly.

Every missed call, as we know, represents more than just an inconvenience, it's a missed appointment or a delayed care or a patient choosing another provider. So this is no longer a staffing problem. It's a structural one and solving it requires intelligent automation, not just incremental fixes.

So that brings us to directly to the solution. So with that context, let me introduce stratusAI Desk Agent. stratusAI Desk Agent is an AI voice agent that answers, understands and resolves patient calls through natural human-like conversations. It is available 24/7. There is no hold music, no call cues and no rigid menus. Patients simply speak normally just they would with a staff member and the AI handles the interaction at the end. From the patient perspective, this feels immediate and human. From the organization's perspective, it introduces a new level of scalability and consistency at the front desk.

So now let's talk about what really makes this different. So on this slide, our stratusAI was built for health care from day one. This isn't an IVR. It's not even a generic chatbot. It supports unlimited simultaneous calls. It detects intent and sentiment in real time and speaks with an empathetic conversational tone that patients are comfortable with. And because stratusAI integrates natively with CareCloud's practice management and EHR platform, it pulls information in real time and writes back instantly. Appointments are booked, refills are routed and patient records stay continuously accurate.

Beyond CareCloud, stratusAI can integrate with other EHR and practice management systems through secure APIs which enables real-time actions and updates without disrupting your existing workflows. For larger organization, this means consistent patient access across departments and locations. And for smaller practices, it means enterprise-grade access without enterprise level staffing cost.

Now let's look at the next slide to understand how stratusAI works. It's important to understand that we use AI agents, not bots. So under the hood, stratusAI uses specialized AI agents each trained for a specific front desk workflow. Scheduling, prescription refills, referrals, each handled by an agent that understand the rules and context of that workflow. Multiple agents can collaborate during a single call while preserving context. So instead of transfers or reputation, the patient experiences one continuous intelligent conversation and the result is true end-to-end resolution.

Let's look at what means -- what that means for a practice. This slide walks us through what stratusAI can actually handle day-to-day. stratusAI provides front desk coverage, it schedules, reschedules and cancels appointments across providers and locations. It handles prescription refill request, referral authorization inquiries, general questions and intelligent routing when escalation is needed. And all of this happens instantly around the clock, without increasing staff workload. This is about giving patient access when they need it, not just during the office hours. Even if the lunch hours and one of the percent in the pole was there during the lunch hours, the break hours, you face a lot of issues of handling the patient calls. So stratusAI keeps working even when you or the front desk staff is not there.

Which naturally raises the question, what does AI handle versus humans? So let's look at this next slide. This clarifies how responsibilities are divided between AI and humans. This is about augmentation not replacement, first of all. So AI handles high-volume repeatable interactions such as the data collection, scheduling, refills, FAQs and et cetera, human focus on clinical judgment, sensitive conversations and complex exceptions.

stratusAI continuously evaluates each interaction and automatically detects when a human agent is needed, routing the call seamlessly to the human at that time. That balance is what drives adoption and trust. This point is especially important for our front desk teams here.

Now let's shift to the patient experience. But I want to talk about what this feels like from a patient's perspective. Patients don't experience this as an AI. They experience empathy, natural pacing and context-aware responses without waiting. Zero hold time alone has a measurable impact on satisfaction, loyalty and overall perception of care. That experience also has a very real financial impact.

Let's look at the next slide. So stratusAI confirms appointments, send reminders and enables instant cancellations and rescheduling that leads to fewer no-shows, better schedule utilization and stronger revenue flow without adding staff members. Of course, in health care, none of this matters without security and compliance.

So on the next slide, we talk about our -- this health care, the stratusAI AI is primarily designed in a way that it is completely HIPAA compliant with the end-to-end encryption, access controls, it has full audit trails and secure EHR synchronization. Patient data remains protected at every single step.

So what does this deliver in real world? So let's look at the impact we are seeing in production. We are seeing a 97% AI call resolution success rate with nearly 80% of inbound calls handled autonomously. That translate into, as we know, the reduced staff workload and significantly improved patient access.

And that's also reflected directly in one of the customers' -- the feedback and we are sharing one of the client testimonials on this next slide. So one of the customer, our customer with Dr. Holden at Lung Care Center, he shared that stratusAI is managing nearly 80% of inbound calls, allowing their staff to focus on complex patient needs while maintaining a higher standard of service.

Now the next question is probably many of you must have been thinking our pricing and implementation. So let's talk briefly about pricing and how easy it is to get started. Our pricing model is intentionally simple and aligned with the outcomes. We charge based on successful calls handled by the AI, meaning the calls that are fully resolved without a staff -- a human staff involvement.

Pricing varies depending on the size of your organization, the complexity of your workflows and the average length of calls. That flexibility allows us to offer pricing at both competitive and practical from different types of practices and health systems. The most important part is that it's risk-free. We offer a 30-days risk-free trial. And if you decide it is not the right fit and canceled within those 30 days, you will not be charged. If you're entrusted our team will be happy to work with you to design a pricing model that makes sense for your organization.

On the next slide, just on the -- from the financial term, let's talk about the economics and how the ROI behind stratusAI. One of the most common question we get is, does it actually make financial sense? So on this slide, we are showing that a simple illustrative example based on real world usage patterns we see across practices.

In this example, our practice received about 2,000 inbound calls per month, which is around 80% of those calls about 1,600 are handled autonomously by AI. When we -- when you compare the cost of an AI handled call versus the fully loaded cost of a staff handled call, the saving adds up very quickly. In this scenario that translates into approximately $7,200 in monthly savings or over $86,000 annually with a projected ROI north of 200%.

And what's important to note is that this does not even account for the secondary benefit, like reduced no shows, better patient satisfaction and 24/7 availability. The takeaway here is simple. As call volume grows, the ROI compounds because AI scales instantly while staffing does not.

On this next slide, many organizations there with this desk agent with stratusAI Voice Audit software, the platform that we have. Desk Agent answer calls, Voice Audit tells you how well they were handled through sentiment analysis, quality scoring, summaries and dashboards. This will also perform on -- for your human-based calls every handler, if the front desk has taken certain calls, it can evaluate the call handled by a human being against the predefined KPIs. So you can even keep an eye on, not only on the AI -- the calls handled by the AI agent, but also by the -- your front desk staff members. So together, automation plus intelligence gives leaders full visibility.

Before we go to the sample calls and the live demo, let me address a few common questions that comes in. So can a patients still reach a staff member? Yes, stratusAI AI escalate, complex or urgent calls instantly.

Can it handle multiple calls? Yes, that's one of the advantages of using the AI-based agents. It's an unlimited simultaneous calls and it's scaled instantly during peak hours.

Does it integrate with your EHR? It's natively integrated with CareCloud Chart, Talk EHR and other CareCloud platforms. At the same time, through an API, it can integrate with any other system, any other EHR and practice management available in the market today.

It can speak 32-plus languages, including English and Spanish with an auto detection. The moment you -- the patient start speaking, it automatically detects the language and quickly convert itself into that language. The go-live time typically, what we have seen with the existing -- the initial clients between 2 to 4 weeks after we get started. We can make a client live. And in case if you are using any other system other than the CareCloud Charts or Talk EHR, it may take a little longer. But it's a matter of weeks, not a matter of months to -- from start to finish to make any customer live.

On this next slide, before getting into the actual demo, it's time to show you what an actual stratusAI calls look like in a practice. This is a single real-world style interaction where the AI handles multiple workflows in one continuous conversation. So the patient calls in to schedule an appointment with their physician. The AI immediately answers, no hold time and naturally gathers the information it needs to complete the request.

During the same call, the AI identifies an outstanding balance, offers to send a secure payment link and the patient agrees and then proactively AI notices that the patient is due for an annual physical and offers to schedule that as well, all without transferring the call or repeating information.

In one conversation, the AI completes appointment scheduling, balance collection and preventative care outreach. From the patient's perspective, this feels seamless and helpful. From the practices perspective, this is multiple front desk task completed without staff involvement. So this is the power of AI agent working together. Context reserve, workflows completed and the call fully resolved at the end of the day.

Scripts are powerful, but sometimes the best way to understand the value is to actually see how this works in the real time. So with that, I will switch to a quick -- very small -- the demo of the product. This is available on our website. Any time you can -- you guys can go there and test it out by yourself.

With that said, let me share -- connect you with our website and let's do a demo.

[Presentation]

So this is just the -- this is a very simple example. And -- but it shows how quickly the AI can resolve routine request without staff involvement. And when stratusAI is in production, it can speak and understand, as I mentioned earlier, 30-plus languages. You can even choose between various voices and regional accents and much more can be configured. It was a very rudimentary because it's in a test environment. And just as a disclaimer, it's for demonstration purposes only. Do not use any personal information or PHI, but you can test it out at your convenience.

Now let's jump back to the slides, please. So to wrap up, I just want to bring this back to the big picture. The future of the front desk is here. stratusAI Desk Agent delivers immediate patient access scalable operations, happier staff and a better patient experience without adding operational burdens. Let AI handle the calls, so your team can focus on care.

At this point, I would like to hand things over to Aman Haq who leads our AI initiatives here at CareCloud. Aman, over to you.

Hi, everyone. Yes, thank you for a great introduction, Hadi. I just wanted to take some time to talk through the development process and what it's like for us when we've been deploying this along now. The agent has been handled thousands of calls between the Voice Agent and the Auditing. We're handling thousands of calls today. And many times when providers come to us, it's similar concerns where they're not sure if their staff or their patients are -- maybe they might be on the older side or they may not be familiar with this technology.

And what we see is that we go, we deploy the product and so often patients come and say, oh, you've helped me save a lot of time actually through this when it comes to booking appointments or it's such an upgrade from your previous IVR system. So that is really good news for us to share. And whenever we really have a conversation, what happens typically is that you express interest and then we sit down and we plow every day, we meet for 10 to 15 minutes because we need to understand your practice.

So generally, what happens is the agent has some nomenclature that's specific to you. For example, maybe one doctor has one -- sees one type of patient on Tuesdays and another one on Wednesday. Maybe the doctor wants 3 patients booked at the same time. We sit with you, we understand how your practice runs, we incorporate that into the agent and what happens is the agent's success rate starts shooting through the roof.

And usually, people come to us and they ask, can you just do appointments for now, right? Let's just start with appointments. Let's start in a demo environment. And then when we go to the demo environment, we put it as part of the IVR. It's one option for people to use it. And when they see the results and when they see the appointments being booked into the calendar really seamlessly, what happens is they wanted for a lab, they want it for patient refills, they want it for everything. And I'm happy to say that the success rate of these agents continuously goes up.

The cost also continuously goes down because compute is becoming cheaper, and we have never had a provider actually either reduce the number of agents that they have deployed with AI or not want to use this. Every single time they're really, okay, let's start with one small thing, but then it becomes -- they end up trusting us with a lot of their workflow because then they know this agent can really help save their staff time and if there's ever any need for human intervention, any patient who just asked about it and it immediately gets offered to the human. So like many people mentioned today when they're talking about staff time being potentially used up by these more typical calls, we see that being resolved.

And then I think the cherry on top is the audit platform. Any doctor can go to it, you will see each and every call that is made into your office, you'll have it graded across criteria that you give us. You can say, I wanted to be the agent to say ABC, I want them to ask this information for many new patients. You will see that, it will be created. It will have a score and you can actually listen to the call and to the entire transcript of every single call that comes into your practice.

So I think in terms of the end-to-end flow when it comes to health care, when it comes to being integrated into our EHR and finally when its the amount of information that we gave you the business and actionable intelligence that we provide, it's a world-class product, and I'm happy to share with whoever is interested in trying it out with us.

Thanks, Aman. And with that, I think let's open the floor for questions.

Yes. So it's a great question. What happens is if someone says -- and this is something we can custom fit for you as well, whichever language you want support for, if someone calls an office and says, [Foreign Language] then the agent will automatically starts speaking in Spanish. Additionally, if someone says in English, I can't speak English, Spanish, please, it'll start speaking Spanish, and that's going to be the same for French, Hindi, Telugu, I mean, German, Swedish, Finnish, almost every -- those 32-plus languages that we spoke about, that's how the agent handles it.

Yes. So that's a really, really good question. What we have built, for example, we actually have workflows created today that are live. for individuals, if they say, I want a weight loss appointment, we wanted to ask these 5 questions. If it's a new patient, then you need to ask for it's name, insurance information, look up the insurance, potentially if it's an operation, you can even get it to preauthorize. Those are all workflows that we have built in, and that's part of those first, like I said, the first 2 weeks that we really sit with you, we understand how your practice works. That's really what we're doing there is customizing that agent to make sure that it has the right voice that you want and it talks to patients the right way and it goes and seamlessly fits into your flow as a provider.

Right. And just add one more thing, Aman, there if you're using the practice management platform -- the CareCloud practice management platform and if there are templates and rules created, it does follow those templates and the rules by default. So if you're checking in -- if a human staff member is checking in availability of an appointment based on the location, based on the provider, based on the day of the week, based on the type of appointment, the same rules the AI agent will also follow. So when it's checking for the eligibility or -- I'm sorry, the availability or an appointment booking or rescheduling, it will follow the same rules. Same case if it's a different platform, and if that platform provides us the APIs to be able to pull that information, it will be deployed in the same way.

Thank you. And this is a really good question. So if a practice schedules home visits on geographic locations, AI, other kind of scheduling, Yes, it does allow for that type of scheduling. The key question I would have for you is, if you tell us how does this differ in your calendar, so we can create the appointment type based off of that, we will be able to. And we actually -- in the next few days, are hoping to release an outbound calling agent too. So some providers have told us that, hey, I want to preemptively call some people when it's, for example, to have their physical. What we also can do is have an outbound call go for these patients that haven't been contacted in quite some time. And whatever information that you want to share with that patient, you would be able to, through this outbound calling. So it's a pretty feature-rich system all in all.

We have an ability to check how sensitive the patient that the AI is to someone talking and you can sell it such that if they start speaking again, then the agent will ignore it initially or the agent immediately stops any time a person says anything. So the customization options is in your hands in terms of do you want to allow this to be interrupted or not. Generally, we find that there is a bit of -- if a patient does start speaking too soon after the default is it would stop speaking to let the patient speak, but we haven't seen that be a deal breaker. And we've seen a lot of calls. Like I know there's been time with people on the road with a bunch of wind and stuff that I couldn't even comprehend what was being said, the AI was able to.

Great. And I think, Aman, the one of -- maybe because you may have noticed some of those delays in this demonstration. And again, this was not a phone call made. It was over a voice over IP through the website. So most part of the delay disappears in the real implementation because that's the phone call that's coming in. And the way this demonstration is happening, this is just for test or demonstration purposes. It uses a different technology, which sometimes show some delays.

So if -- it can. And if that's something you're interested in, I personally speaking, would always prefer it gather the information, send a task like we mentioned, we can even show the website after where it shows the appointment being created, create a task for your staff to just process the payment. The reason I say so is, obviously, I am the Head of AI and worked on a copilot for quite some time. I understand its power. I would never want it to because of an error or something any sort of glitch have someone's payment be processed once or too many times or not enough time. So it definitely has the ability to. I would recommend caution at least for now in terms of it can send everything to the -- someone on your staff and make it easy for them just to click, okay, accept payment. But I wouldn't have a clicked that button yet to be candid.

And just to elaborate, what Aman said, even though on the AI world, patients speaking saying, this is my credit card number or something and processing the payment. If we already have your merchant account set up and connected and as an example, if you are a CareCloud customers and you already have signed up for Breeze, at this moment, a system AI generates a text to the patient cell and the patient can click on that and can make the payment. So yes, it needs some integration if it's not already there. So it is doable in this text fashion. So it's just at the same moment, send the link for the payment due and the user can click on it and make the payment.

Maaz, do you want to take this question?

Sure. Yes. So if you have multiple departments, we could like definitely integrate that for your practice as well. And yes, like we basically roll out a form initially where we asked for some of like your context memory, you want that to be set up. And we configure call routing rules based -- during the onboarding, the AI listens to the patient request, identifies which department or service they need and then route or transfer the call to the correct team. If the request is something AI can fully handle on its own, it completes it. If it needs a specific department or a live staff member, it routes the call accurately instead of like sending the patient in the wrong place. The goal is like fewer misrouted calls and a smoother experience for both patients and staff.

Yes. It can update patient demographics and insurance. And when it comes to verify, if you just let us know which tool you use for that, we'd be able to integrate with it and do it as well.

Okay. And just to summarize this for everyone. You can think about it as the virtual AI staff members. So the way you set up everything in your practice today, whether it's a small practice or whether it's an enterprise practice. You can have a different either group of people or a single people who have been trained to perform certain tasks, whether it's the question with respect to the different departments or is the question with respect to the specific role. The AI can be trained, those agents can be trained for those specific functions and roles and they work together collaboratively so seamlessly that at the same time, we deliver the results. So it's highly, highly configurable. It's very flexible.

And as Aman has mentioned, during those first 2 weeks, that's where we sit with you, we go through your needs and understanding. We shared with you what we have seen and come up with the right implementation for your organization.

And thank you very much, everyone, for joining today. And if you want to schedule a demo with us, just -- you can follow this link on the screen, just click on it and fill out the form. And our team will reach out to you. We will work with you to schedule a further demonstration like a one-on-one, the discussion and presentation, and we'll make it work for you.

Yes. I like to say one last thing that I would really encourage anyone, I know whenever we speak with providers, again, there's always some nervousness about enabling this and how people will respond. We enable this. We keep it shut so that it's only you who gets to test it out. And only when you're fully comfortable, do we let it goes into a portion of your call process. Usually, it's just let's say appointments. And then once it's really strong in appointment, then we can go and branch out into other labs, refills, et cetera. And again, I'm very convinced that within 2 weeks, you'll start seeing just how powerful it is. And you'll begin to enjoy some of the value here because again, everyone else that we've worked with so far has reported this, and I really just encourage you all to try it. It is risk-free, at least for 30 days. And you'll, at the very least, get [indiscernible] want to continue with stratusAI.

Thank you, everyone.

Greetings, and welcome to the CareCloud, Inc. Third Quarter 2025 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Kristen Rothe. You may begin.

Good morning, everyone. Welcome to CareCloud's Third Quarter 2025 Conference Call. On today's call are Mahmud Haq, our Founder and Executive Chairman; Co-Chief Executive Officer, Stephen Snyder and Hadi Chaudhry; 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 conference 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 statements of historical fact made during this conference are forward-looking statements, including, without limitation, statements regarding our expectations and guidance for future financial and operational performance, expected growth, business outlook and potential organic growth and acquisitions.

Forward-looking statements may sometimes be identified with words such as will, may, expect, plan, anticipate, approximately, upcoming, belief, estimate or similar terminology and the negative of these terms. 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 to 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 more 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 this call by telephone, you may want to download our third quarter 2025 earnings presentation. Please visit our Investor Relations site, ir.carecloud.com., click on News and Events, then click IR calendar, click on Third Quarter 2025 Results Conference Call and download the earnings presentation.

Finally, on today's call, we may refer to certain non-GAAP financial measures. Please refer to today's press release announcing our third quarter results and 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 our Co-CEO, Stephen Snyder. Stephen?

Thank you, Kristen, and good morning, everyone. We appreciate you joining us as we discuss our year-to-date performance and progress against our strategic objectives.

Q3 was a truly transformational quarter for CareCloud. We delivered strong results and hit important AI milestones while simultaneously closing 2 strategic acquisitions that expanded our reach into the hospital market and deepened our analytics and benchmarking capabilities. I'm excited about what this means for our overall trajectory and for the value we can create for providers in today's market.

Also, we are pleased to be raising full year revenue guidance to $117 million to $119 million, up from the $111 million to $114 million we set at the beginning of the year. And we are reaffirming adjusted EBITDA guidance of $26 million to $28 million and GAAP EPS guidance of $0.10 to $0.13, reflecting the momentum we are seeing and disciplined execution.

Turning to the quarter. CareCloud delivered another period of profitable growth with revenue of $31.1 million, an increase of 9% from the same period last year. Further, growth is converting to earnings power. GAAP EPS improved by $0.08 year-over-year to $0.04 and adjusted EBITDA increased 13% to $7.7 million, demonstrating operating leverage in our model.

I'll come back to guidance in a moment. But first, I want to go deeper on the 2 strategic acquisitions that are reshaping the company, namely Medsphere and Map App. First, on August 22, we completed the acquisition of the assets of the Medsphere Systems Corporation. This transaction represents a significant expansion of CareCloud into the inpatient market. Historically, CareCloud has been known primarily for its ambulatory solutions, revenue cycle and technology-enabled services. Medsphere immediately broadens that profile.

We can now serve community hospitals, regional systems and critical access hospitals with a full stack that includes Care View, an integrated inpatient EHR, RCM Cloud, which extends our revenue cycle capabilities into hospital billing and collections; Wellsoft, a class recognized emergency department information system, HealthLine for hospital supply chain management, ChartLogic, our ambulatory EHR and practice management suite, which has a particular strength in the surgical subspecialties such as orthopedics, Marketware, which provides physician relationship management and referral analytics to grow service lines and reduce referral leakage and managed IT services for implementation, interface management, infrastructure support and a 24/7 help desk.

Put simply, we've evolved from an ambulatory first company to serving the entire care continuum. We can now support the full patient clinician journey from the doctor's office or outpatient clinic to the emergency department into the inpatient bed through the revenue cycle and even into the supply chain. That is a fundamentally different and stronger posture for CareCloud.

Scale matters here as well. Medsphere brings a national network of hospitals and gives us immediate hospital reach and credibility of buyers who are often priced out of large enterprise suites, but still need AI-enabled capabilities to operate. Consistent with our playbook, we were disciplined in how we financed it. We acquired Medsphere for $16.5 million, funding roughly half with cash on hand and the balance under our new credit facility. Since closing in late August, we rapidly delevered and have already reduced the finance portion by nearly half. And today, the outstanding balance on the line of credit is under $5 million. In other words, approximately 70% of the purchase price has been funded from our internally generated cash, and we expect to pay off the remaining balance to 0 over the upcoming months.

Further, we executed this plan with no dilution to common shareholders. That is what we mean by disciplined capital allocation. We added an at-scale hospital IT platform and client base while strengthening the balance sheet and driving positive cash flow.

Our near-term integration priorities are straightforward. First, cross-sell and upsell. We are beginning to introduce AI-driven revenue cycle services, analytics and automation across the Medsphere hospital footprint to help facilities collect cash faster and at higher levels, address staffing constraints and gain access to integrated AI solutions that were previously out of their reach.

Second, infrastructure leverage. We are aligning Medsphere's support implementation and managed services with CareCloud's operating model to accelerate go-lives and lower support cost per client, supporting margin expansion over time.

Medsphere is not just more revenue, it is strategic positioning, placing us firmly inside the hospital IT stack with deployed assets and creating a national cross-sell channel for our AI and RCM automation.

The second transaction since our last earnings call was our acquisition of Map App from the Healthcare Financial Management Association, which closed on October 1, alongside a long-term joint marketing agreement.

Map App is a hospital benchmarking and performance analytics platform used by leading hospitals and integrated delivery networks to measure and compare revenue cycle metrics such as cash collections efficiency, denial performance and cost to collect, exactly the levers CFOs and revenue cycle leaders are focused on right now. HFMA built this tool to show with clarity where an organization is underperforming and what best-in-class looks like. That matters for us for multiple reasons. First, we move up the decision stack. We can now walk into a CFO conversation leading with benchmarking insights and tie gaps directly to our solutions.

Second, we create an analytics-led plan of action. Map App can identify the problems and CareCloud's RCM capabilities and AI automation can then in turn provide the solutions.

Third, through our joint marketing agreement with HFMA, we further extend our reach and our credibility in the hospital finance leadership.

From a near-term revenue standpoint, Map App is about improving win rates and expansions into 2026 and beyond, particularly on top of the Medsphere base. And there is a tight product fit with our AI center of excellence. We intend to enrich map benchmarks with AI-driven recommendations where a provider, for instance, is underperforming, the expected dollar impact of closing that gap and the automation to prioritize first. That is where the market is going, and we intend to lead it.

Let me close with how we see the path forward. Again, we are increasing our full year 2025 revenue guidance to a range of $117 million to $119 million and reaffirming adjusted EBITDA guidance of $26 million to $28 million with $0.10 to $0.13 of GAAP EPS.

More importantly, we believe the combination of Medsphere and Map App positions CareCloud very differently from a year ago. We now have a credible hospital presence covering inpatient EHR, ED systems, RCM technology, analytics, supply chain and managed IT already deployed in facilities across the country. And we have a benchmarking engine that allows us to start commercial conversations with data, not just a pitch. And we have an AI center of excellence that sits on top of both, driving targeted automation, measurable financial benefits and operating leverage. We're doing all this while remaining profitable, generating cash and preserving flexibility. Said simply, we are building an integrated AI-enabled ambulatory and hospital platform that's designed to meet and exceed the needs of providers in today's market.

With that, I'll turn the floor over to Hadi to discuss how we are productizing AI inside clinical and strike that stop. With that, I'll turn the floor over to Hadi to discuss how we are productizing AI inside clinical and revenue cycle workflows and then to Norm for additional financial details. Hadi?

Thank you, Steve, and good morning, everyone. I would like to start by echoing Steve's comments and thanking all of you for joining us today. Artificial intelligence remains at the center of CareCloud's transformation strategy, driving both operational efficiency and long-term growth.

Over the past year, we have made measurable progress embedding AI across our platform, improving clinical documentation, accelerating revenue cycle performance and modernizing patient engagement. Through our AI center of excellence, we are rapidly converting innovation into results, enhancing client productivity, reducing costs and positioning CareCloud as a scalable differentiated player in the health care technology landscape.

One of the most exciting developments from our AI center of excellence is our upcoming Agentic AI front desk solution, which is currently in advanced pilot testing and scheduled for formal launch in mid-December. This next-generation multilingual voice-driven digital assistant autonomously manage patient calls, handling appointment scheduling, rescheduling and cancellations, new patient registrations, prescription refills, lab result inquiries, preventive care reminders, billing questions and referral requests, all through natural conversational interactions. Operating 24/7 with no hold times, it can securely access, process and where needed, update real-time clinical and financial data to deliver accurate contextual responses. The system is fully integrated with CareCloud's EHR and practice management platforms and can also interface with other leading systems across the industry. To the best of my knowledge, none of our direct competitors are offering this level of proprietary AI capabilities or depth.

In our pilot deployments, the Agentic AI front desk solution has already delivered strong results, successfully handling over 70% of incoming patient calls end-to-end without human intervention and achieving over 80% success in appointment scheduling and related tasks. The pilot included calls in multiple languages, roughly 90% English and 10% Spanish, demonstrating the system's ability to serve diverse patient population [indiscernible]. By reducing administrative burden, eliminating wait times, improving patient access and removing language barriers, this solution creates measurable efficiency gains and represents a major growth opportunity for CareCloud as we scale its deployment.

Looking across both our client base and the broader market, the opportunity for this technology is significant. As a fully integrated and highly scalable solution, the Agentic AI front desk is positioned to transform patient communication across both ambulatory and hospital settings. We see strong potential to deepen relationship with existing clients while expanding adoption among new health care organizations, unlocking meaningful recurring revenue opportunities as this solution scale.

At the end of my remarks, we will play a brief recording of a real patient call that highlights the depth and capability of our Agentic AI solution. We have chosen a more complex interaction rather than a routine scheduling call to show the system sophistication and versatility. This recording was shared with patient consent and all protected health information has been removed in full compliance with HIPAA.

Following our recent acquisition of Medsphere, we are making steady progress on the integration and modernization of their platform portfolio. Our road map is centered on merging Medsphere's Care View inpatient system with CareCloud's ONC-certified CAH platform, creating a unified next-generation solution tailored for community and critical access hospitals. A major focus is on reestablishing Care View as an industry-leading mobile-friendly platform designed to simplify workflows for physicians and nurses while improving speed, usability and access across devices. In addition, ChartLogic customers will gain access to CareCloud's proprietary EHR, practice management and AI-enabled capabilities, expanding the value of our combined portfolio.

We are also working on plans to advance the recently acquired HFMA Map App, a benchmarking tool that helps providers compare key operational and financial metrics. Our goal is to enhance it with AI-driven analytics and predictive insights, transforming static benchmarks into actionable intelligence and further extending our AI footprint to help health care leaders optimize performance in real time.

Together, these initiatives reflect how CareCloud is evolving into a unified AI-driven health care technology company, now serving both the hospital and ambulatory segments. By connecting front office automation, clinical intelligence and financial performance within a single platform, we are expanding our reach, strengthening our product portfolio and positioning CareCloud to deliver stronger growth, improved margins and sustained value creation heading into 2026.

Before I hand the call over to Norm Roth, our Interim CFO and Controller, let's listen to the patient call I mentioned earlier, demonstrate the depth and capability of our Agentic AI front desk solution

[Presentation]

Thank you, Hadi. That was a very interesting demonstration of our AI capabilities, and thanks, everyone, for joining our call today. We delivered another strong quarter, reflecting the strength of our business model and the disciplined execution of our strategic priorities. Positive earnings per share and strong cash flow underscore our continued operational efficiency and financial health.

During the 9 months ended September 30, 2025, we generated $19.9 million of cash flow from operations compared to $15.4 million in the same period last year. In the third quarter, we reported revenue of $31.1 million, an increase of $2.5 million compared to the same period last year. CareCloud Wellness generated approximately $900,000 in revenue for the quarter and approximately $2.6 million for the first 9 months of this year. There was approximately $3.4 million in revenue related to the Medsphere acquisition, which was completed towards the end of this past August.

In the third quarter, we reported GAAP operating income of $3.2 million and GAAP net income of $3.1 million. This is consistent with the GAAP operating income of $3.3 million and GAAP net income of $3.1 million during Q3 2024. The GAAP net income per share for the quarter was $0.04 based on the net income attributable to common shareholders, which takes into account the preferred stock dividends. There was a loss of $0.04 per share in the third quarter of 2024. Non-GAAP adjusted net income for the third quarter of 2025 was $4.4 million or $0.10 per share, calculated using the end-of-period common shares outstanding. We reported adjusted EBITDA of $7.7 million in the third quarter compared to $6.8 million in the same period last year.

Revenue for the 9 months of 2025 was $86.1 million compared to $82.6 million for the same period in 2024. For the first 9 months of 2025, the company's GAAP net income was $7.9 million compared to GAAP net income of $4.6 million for the first 9 months of 2024. This equates to income of $0.07 per share after subtracting the preferred stock dividends. This compares to a $0.28 loss for the same period last year. Non-GAAP adjusted net income for the 9 months was $10 million or $0.24 per share. Year-to-date, the adjusted EBITDA was $19.9 million, an increase of $3 million from $16.9 million in the same period last year.

As of September 30, 2025, the company had approximately $4.3 million of cash, net of restricted cash of $815,000. Net working capital was approximately $6.1 million. We have a new $10 million line of credit with Provident Bank. And as of September 30, 2025, the line of credit balance was $6.5 million. Since then, we have made $1.6 million of additional payments on the line of credit, bringing the balance today to $4.9 million. Our intention is to fully pay the balance on the line of credit as soon as possible. We remain focused on profitability and cash flow and delivering long-term shareholder value. We look forward to updating you at year-end.

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

Thank you, Norm. As we look ahead to 2026, we remain focused on driving innovation, improving patient experience and creating lasting value for our shareholders. I want to thank our employees for their dedication, our clients for their continued trust and our shareholders for their confidence and support. Thank you.

Operator, you can open the call for questions. Thank you.

[Operator Instructions] Our first question comes from the line of Allen Klee with Maxim Group.

Great quarter. Starting out with your push into the hospital space. Can you talk about your plan to try to win new customers and grow sales? What's your go-to-market strategy on that?

Allen, certainly. So if we step back for a minute and we think about what has transpired since our last earnings call, we would really focus in on 2 primary things. One would be the acquisition of Medsphere. The second would be Map App.

If we think about Medsphere, Medsphere truly brings us from the position we were in a year ago roughly, where we were an ambulatory-centric provider to one that will serve the full care continuum. And [indiscernible] with it immediate credibility in community hospitals, acute care facilities, critical access hospitals and the like.

And then the second would be Map App. So Map App brings with it the analytics engine and the credibility to be able to extend the throughput of the overall Medsphere operations and cross-selling within that same hospital segment.

So if we think about the more immediate opportunities, our near-term opportunities candidly, will really be more so focused on cross-selling and upselling into that installed base. So we are now working with hundreds of hospitals throughout the country. And we have the opportunity to cross-sell our AI solutions to implement the AI solutions to embed them more fully in existing platforms, to cross-sell and upsell our RCM solutions into those existing relationships. That would be really the first order of priority.

Our second order of priority will really be more focused on extending the same benefits that we're able to deliver to these existing customers to the broader hospital community with a focus initially on critical access hospitals. There are more than 1,400 critical access hospitals throughout the country. They are underserved in terms of their technology opportunities from a platform perspective and also in terms of the opportunity to avail themselves of RCM and AI platforms. So we see a significant opportunity to be able to sell into these critical access facilities. But that will really come in the order of second priority in relationship to the significant upsell and cross-selling opportunities we have in the existing base.

My next question and after that, I'll go back in the queue and ask more after other people. For AI, how are you thinking about the rollout of the new -- your new offerings?

Allen, thanks for your question. I think before even getting into the -- more specific to the products of this FTE Agentic AI product as an example, let's look at understand if we can take a note of how this whole AI landscape is changing and evolving, especially in the health care. And if you think about it in the first 6 months of 2025 alone, nearly $6 billion of venture funds into digital health and about 60% of that was captured by AI start-ups. So that level of investment is basically -- it's transforming the AI landscape and especially into the clinical, financial and operational workflows.

And before, if you think about our own opportunity of this FTE into the space of this voice-based AI, as we all have heard about one of the prominent names, SoundHound, they did really well. They have demonstrated how scalable conversational AI can be across industries.

If you think about it, I think the 2022 revenue was approximately $46 million to now they are they expecting the 2025 revenue to be about $160 million to $170 million. And with that, the market cap is around $7 billion today. So that success at least validates both the demand and the value creation potential for high-performing voice [indiscernible].

Now if you look at the health care, the biggest barrier is domain depth and compliance. Health care, as we all know, isn't just about understanding the speed, it's about understanding clinical context, payer rules, PHI privacy and interoperability standards. And if you think about CareCloud, we have been -- we have spent years in building the infrastructure and certification to make this thing possible.

So while voice AI companies are great at natural [indiscernible], but we think that the CareCloud's advantages in operational execution into the health care workflows. So another differentiator, if you think about this AI front desk solution, it isn't just a bolt-on voice tool. It's natively built into our EHR and practice management platforms. which gives us a secure real-time access into the highly regulated clinical and financial data.

So while SoundHound and many other companies have proven the commercial scalability of conversational AI, but CareCloud is bringing the same sophistication into the health care. And you have to think about this example of the call that we have played and we purposefully picked up a more complicated call, more difficult call, difficult accent and difficult questions, and it still kept even as the empathy factor into -- while answering those questions to the patients. So the 70% success rate, and this also includes even the call where patients specifically asked to transfer the call to the human agent. So if you remove that, the success rate or the call handling rate even would be much higher.

So now with the Medsphere, more clients added to our ambulatory clients on our existing platform to ChartLogic platform. So we see between all of them, they probably handle millions and millions of calls each year. So we see a tremendous [indiscernible] there to be able to cross-sell and upsell into all this space.

Sorry for the long answer to your question. I just wanted to make sure that how we are positioning this conversational AI and Agentic AI applications.

Our next question comes from the line of Michael Kim with Zacks Small-Cap Research.

First, I guess, just in terms of M&A, I know you recently closed Medsphere and Map App. But just wondering, maybe taking a step back, what you're seeing from a competitive standpoint, particularly as it relates to buyer and seller expectations around valuations. And then related to that, I know you plan to pay down the credit facility balance in the coming months, but just curious how you're thinking about capacity from a funding standpoint going forward.

Thanks, Michael. AI is absolutely driving conversations in the M&A space. And AI is creating pressure both amongst RCM companies and also health care IT companies like Medsphere and the Map App product. From an expectation perspective, companies who are looking to exit or owners who are looking to exit are -- seem to appreciate the fact that if they are not actively rapidly deploying AI throughout their overall service offering or platform that their anticipated expectation when it comes to valuation includes or bakes that into the overall formula. So maybe said more simply, companies who are not leveraging AI understand that they have a limited window of time to make an exit. And I think we're seeing that in terms of valuation. So think about the valuations of these 2 companies, again, these are both technology -- these are both technology suites. One was a technology company.

The other one was a technology product created by a nonprofit in our space. But both of them recognize the fact that they didn't have the capacity to be able to build AI into their platforms and understood that their days were limited in terms of their ability to meet the end users' expectations.

So from the perspective of valuations, I think that's the reality of what we're seeing. We continue to be open to opportunities where we can move forward with an asset purchase, opportunities that we can close without any dilution to the common shareholders, opportunities where we can continue to keep balance sheet flexibility and arrive at attractive valuations. And if all of those initial criteria are met, then we analyze whether or not there's a good fit from a product perspective and in terms of overall synergies.

So -- if you think about where we started last year, we did not explicitly bake in any of the 4 acquisitions that we had into our overall expectations that we set and forecast. But nevertheless, that pressure that's building on the seller side resulted in these acquisitions this year.

Got it. That's super helpful. Appreciate that. And maybe just to follow up on your comments around specifically Medsphere and Map App. Just curious how the structures of those transactions may have differed from prior deals in the past and how you think about kind of structuring going forward?

Certainly. So at a high level, all 4 acquisitions that we closed this year really follow the same disciplined playbook for our accretive well-priced acquisitions. So they were asset purchases. Again, as I mentioned before, they were non-dilutive, maintained balance sheet flexibility, valuations of 1x or less.

If we think about Medsphere in particular, which closed in late August, the price was $16.5 million, and we paid roughly half of that in cash at closing. And then we paid the balance of that through a credit facility. That credit facility was with the new bank, no warrants, very practical covenants and the like and a lower effective interest rate.

So notwithstanding all of that, we have taken that initial amount, and we've reduced that by half. So from a practical perspective, we've paid from our internally generated cash. We've paid about 70%, 75% of that overall consideration from cash at closing -- I'm sorry, from cash generated internally. And we expect to be able to fully satisfy the remaining balance within the next number of months, whether it be next quarter, 2 quarters, we're not totally sure, but we're paying it off as quickly as we can.

Map App has similar -- is similar from the perspective of the other 2 acquisitions that we closed. We paid all cash at closing. And again, an accretive acquisition, non-dilutive, very attractive valuation.

[Operator Instructions] Our next question comes from the line of Allen Klee with Maxim Group.

I was just wondering, do you think for the acquisitions, if you're able to do the cross-selling, upselling synergies that they have the potential to get to the type of margins that your company has overall?

Certainly. So our basic playbook, Allen, with regard to the acquisitions is from the perspective of looking out 3 months -- I'm sorry, 3 quarters or so to be able to get them to an operating cash flow margin of about 30% or greater. That's what we strive for. And with regard to the 4 acquisitions this year, we believe we're making good progress at getting to those numbers. So yes, and from an upselling, cross-selling perspective, we can upsell, cross-sell, for instance, RCM solutions, AI solutions and the like. And we can do that at extremely attractive margins. So the answer to your question is yes.

This now concludes our question-and-answer session. I would like to turn the floor back over to Norman Roth for closing comments.

Thank you, everyone, for joining our call. Enjoy your day.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.