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CareCloud, Inc.

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Business Summary

CareCloud, Inc. is a technology-enabled services and generative AI solutions provider focused on redefining healthcare revenue cycle management (RCM) . The company offers a comprehensive suite of proprietary cloud-based solutions to healthcare providers, ranging from small practices to enterprise medical groups, hospitals, and health systems across the United States and certain other international locations . Its core business model revolves around technology-enabled RCM, cloud-based software, digital health services, healthcare IT professional services & staffing, and medical practice management services . Revenue is primarily generated from technology-enabled business solutions, often billed as a percentage of payments collected by customers, which includes the use of EHR and practice management systems . The company also earns revenue from professional services, printing and mailing services, group purchasing services, and medical practice management services .

The U.S. Healthcare IT industry market was approximately $322.59 billion in 2024 and is projected to reach $792.05 billion by 2034, growing at a 9.39% compound annual growth rate (CAGR) from 2025 to 2034 . The RCM sub-segment is reported to be nearly $172.2 billion in 2024 and is projected to grow at a 10.1% CAGR through 2030 . The U.S. EHR market was valued at $12.9 billion in 2024 and is expected to grow at a CAGR of 2.55% from 2025 to 2030 . The Telehealth market is estimated at approximately $42.61 billion in 2024 and is expected to grow to $358.96 billion by 2034 with a CAGR of 23.84% . National Health Expenditures are projected to grow at an average of 5.8% from 2024-2033, outpacing the average Gross Domestic Product (GDP) growth of 4.3%, leading to an increase in health spending's share of GDP from 17.6% in 2023 to 20.3% in 2033 .

CareCloud's competitive advantage is rooted in its ability to deliver industry-leading solutions at competitive prices by leveraging proprietary software that automates workflows and increases efficiency, combined with a global team . This team includes over 300 experienced health industry experts onshore and approximately 3,300 highly educated and specialized offshore team members, primarily in Pakistan, where labor costs are estimated to be approximately 17% of comparable U.S. employees . The company has a reputation for acquiring and transforming distressed competitors into accretive acquisitions .

For the fiscal year ended December 31, 2025, CareCloud reported total net revenue of $120.499 million , an increase of 9% from $110.837 million in 2024 . Gross profit is not explicitly stated, but direct operating costs were $64.456 million , representing 53.5% of net revenue . Operating income for 2025 was $11.343 million , resulting in an operating margin of 9.4% . Net income was $10.798 million , and net income attributable to common shareholders was $3.892 million . Basic and diluted EPS were $0.10 . Adjusted EBITDA for 2025 was $27.549 million , up from $24.057 million in 2024 . Cash and restricted cash at year-end 2025 totaled $3.617 million , with working capital of $1.315 million . Total liabilities were $28.092 million , and notes payable (current and non-current portions) totaled $1.169 million .

Comparing 2025 to 2024, net revenue increased by $9.662 million , or 9% . Technology-enabled business solutions revenue increased from $73.672 million in 2024 to $76.907 million in 2025 . Professional services revenue saw a significant increase from $18.202 million in 2024 to $25.363 million in 2025 . Medical practice management services revenue slightly decreased from $14.432 million in 2024 to $13.933 million in 2025 . Direct operating costs increased by $3.614 million , or 6% , primarily due to a $1.0 million increase in salary costs from the Medsphere acquisition, a $2.4 million increase in outsourcing and other customer processing costs, and a $270,000 increase in consultancy expenses . Selling and marketing expense decreased by $1.414 million , or 23% , due to lower spending and headcount reduction . General and administrative expense increased by $2.263 million , or 14% , driven by a $2.5 million increase in salary costs due to higher headcount, partially offset by a $794,000 decrease in legal and professional fees . Research and development expense increased by $2.601 million , or 69% , due to an increase in offshore headcount . Depreciation expense increased by $468,000 , or 23% , mainly from capitalized leasehold improvements . Amortization expense increased by $350,000 , or 3% , due to the amortization of intangible assets from current year acquisitions . Lease termination and restructuring costs decreased by $442,000 , or 74% .

During 2025, CareCloud completed several significant operational developments, including the acquisition of MAP App, Medsphere Systems Corporation, and RevNu Medical Management . The MAP App acquisition, effective October 1, 2025, involved a payment of $467,817 plus potential earnouts, and contributed approximately $226,000 in revenue during the three months and year ended December 31, 2025 . The Medsphere acquisition, effective August 22, 2025, had an aggregate purchase price of $16.5 million, comprising $8.250 million in cash and $8.250 million payable to Wells Fargo Bank, N.A. . This acquisition contributed approximately $10.5 million in revenue during the year ended December 31, 2025 . The RevNu acquisition, effective April 1, 2025, involved contingent consideration of approximately $565,000 and contributed approximately $882,000 in revenue during the year ended December 31, 2025 . The company also invested approximately $1.6 million in upgrading related party leased facilities, primarily for the expansion of its AI center . In March 2025, the majority of the Series A Preferred Stock was converted into common stock, resulting in 3,541,701 shares of Series A Preferred Stock being converted .

Business Outlook

CareCloud's management is focused on reducing costs, maintaining profitability, and generating positive free cash flow to continue paying Preferred Stock dividends, including those in arrears . The company aims to redefine the next generation of technology-enabled revenue cycle solutions and expects to increase software capabilities and offer additional complementary business services to address the evolving needs of the U.S. healthcare market .

A key growth area for CareCloud is the enhancement of its existing solutions with new functionality and features, leveraging internal teams, partnerships, and acquisitions . The company plans to dedicate resources to research and development to bolster existing applications and drive new opportunities for innovation . This includes expanding its use of artificial intelligence (AI) technologies across its products, services, and internal operations, with specific initiatives like CareCloud cirrusAI and Stratus AI Desk Agent designed to enhance clinical decision-making, streamline workflows, reduce administrative burdens, and optimize revenue management . The Medsphere acquisition, which contributed approximately $10.5 million in revenue in 2025, is expected to further expand the company's presence in the inpatient and ambulatory market and the clinical software market, while also providing entry into certain managed services . The RevNu acquisition, which generated approximately $882,000 in revenue in 2025, added clients in the audiology and hearing aid market, broadening the company's presence in the healthcare IT industry . The MAP App acquisition, contributing approximately $226,000 in revenue in 2025, is intended to expand CareCloud's SaaS-based ecosystem with best-in-class tools that complement its AI-powered revenue cycle platform .

The company also intends to expand into new categories, specialties, and markets by continually reassessing the market landscape and seeking new opportunities to meet client needs . This involves developing new technologies, launching new services, entering new specialties, and expanding into adjacent markets . Organic growth is a relentless focus, with investments in sales and marketing activities, partners, and products to expand the client footprint . CareCloud also aims to extend relationships with existing clients through its CareCloud Wellness offerings, generating additional recurring revenue and converting SaaS clients into higher revenue per client offerings like RCM and other business services . The company's unique business model, leveraging cloud-based software and a cost-effective offshore workforce, is expected to provide significant cost advantages and enable further cost reductions in acquired companies .

Operationally, CareCloud anticipates further reducing its employee count during 2026 . The company capitalized approximately $3.2 million in development costs for internal-use software in 2025 . Purchases of property and equipment were $4.8 million in 2025 , and the company borrowed approximately $1.5 million to finance the purchase of an aircraft and several vehicles in 2025 . The company plans to liquidate the $1,032,000 aircraft loan with Republic Bank & Trust Company within the next two years . The company's research and development focuses are on enhancing and expanding service offerings while ensuring regulatory compliance, with continuous updates to software and technology infrastructures .

Management explicitly flagged structural headwinds and execution risks, including the potential for AI technologies to produce inaccurate, incomplete, or misleading outputs, reflect or amplify unintended biases, or result in discriminatory outcomes, which could materially adversely affect the company's reputation, customer relationships, and competitive position . The legal and regulatory framework governing AI is rapidly evolving and uncertain, potentially increasing compliance costs, requiring product changes, delaying or limiting AI-enabled solution deployment, or exposing the company to additional liability . Furthermore, competitors may adopt AI technologies more quickly or successfully, and market demand for AI-enabled healthcare solutions remains uncertain .

Geographic, regulatory, and macro factors identified as constraints include the heavy dependence on offshore operations in Pakistan, Azad Jammu and Kashmir, and Sri Lanka, where any disruption could adversely affect the company's ability to offer competitively priced products and services . Changes in U.S. or foreign sanctions, export controls, or cross-border data transfer requirements could restrict offshore operations or increase compliance costs . Political and social unrest, war, acts of terrorism, currency fluctuations, cost of labor and supplies, power grid and infrastructure issues, vandalism, and changes in local law in these regions could negatively impact operations . Client mandates or preferences for onshore service providers may also adversely impact the business model . Adverse macroeconomic conditions, including slow growth or recession, high unemployment, inflation, tariffs, tighter credit, higher interest rates, labor shortages, and currency fluctuations, can adversely impact demand for customer services and increase credit and collectability risk on trade receivables .

Risk Factors

CareCloud faces material risks including its heavy dependence on offshore operations in Pakistan, Azad Jammu and Kashmir, and Sri Lanka, where approximately 3,300 employees are located, and labor costs are approximately 17% of comparable U.S. costs . Any disruption to these operations, including political unrest, war, terrorism, currency fluctuations, or changes in local laws, could significantly diminish its competitive advantage and negatively impact its business . The company's proprietary software and service delivery platform may not operate properly, leading to liability claims, reputational damage, or diversion of resources . Cybersecurity threats, including system failures, cyberattacks, and unauthorized data access, pose significant risks, potentially resulting in revenue loss, litigation, remediation costs, and reputational harm . The expanding use of artificial intelligence (AI) introduces risks of inaccurate or biased outputs, increased cybersecurity incidents, and evolving regulatory frameworks that could raise compliance costs or limit deployment . The healthcare industry is highly competitive, with larger competitors possessing greater resources, and the company's competitive edge could be lost if competitors develop similar offshore operations . Failure to introduce new products or keep pace with technological advances could lead to customer loss and hinder business growth . Changes in the healthcare industry, such as consolidation of providers, could reduce demand for services and decrease revenue . The company's revenue is largely dependent on customer collections, and decreases in customer revenue due to legislative changes, payer actions, or economic factors would directly impact its own revenue . Sales and implementation cycles are variable, potentially delaying revenue recognition and offsetting expenditures . Non-compliance with federal, state, and foreign data privacy, security, and fraud and abuse laws, including HIPAA and the HITETECH Act, could result in significant liabilities, fines, and reputational damage, with civil penalties of up to $1.5 million for each incident of a breach of safeguards . The company's Series A and Series B Preferred Stock rank junior to all indebtedness and other liabilities, with total liabilities excluding contingent consideration at approximately $27.0 million as of December 31, 2025 , and the ability to pay preferred stock dividends is subject to loan covenants and cash availability . At December 31, 2025, there was approximately $6.8 million of dividends in arrears .

Management Priorities

Management's message to shareholders emphasizes a strategic focus on reducing costs, maintaining profitability, and generating positive free cash flow to ensure the continued payment of Preferred Stock dividends, including those in arrears . The company is committed to redefining the next generation of technology-enabled revenue cycle solutions through significant investment in improving current offerings and building new solutions that leverage next-generation technology . Key strategic priorities include providing comprehensive next-generation RCM solutions, enhancing existing solutions with new functionality and features through internal development, partnerships, and acquisitions, and expanding into new categories, specialties, and markets . Management also stresses relentlessly driving organic growth by expanding the client base through increased sales and marketing activities and extending relationships with existing clients by up-selling additional solutions and converting SaaS clients to higher revenue RCM offerings . A core strategic advantage highlighted is leveraging significant cost advantages from its proprietary technology and global workforce, particularly the cost-effective offshore team . The company also aims to develop its partner ecosystem to provide integrated solutions and envisions future opportunities to monetize its large data repository in a compliant manner to improve clinical outcomes and financial metrics .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Overview
  2. [2] Item 1, Business — Market Overview
  3. [3] Item 1, Business — Market Overview
  4. [4] Item 1, Business — Market Overview
  5. [5] Item 1, Business — Market Overview
  6. [6] Item 1, Business — Market Overview
  7. [7] Item 1, Business — Competition
  8. [8] Item 1, Business — Competition
  9. [9] Item 1, Business — Competition
  10. [10] Item 7, MD&A — Consolidated Statements of Operations Data
  11. [11] Item 7, MD&A — Consolidated Statements of Operations Data
  12. [12] Item 7, MD&A — Consolidated Statements of Operations Data
  13. [13] Item 7, MD&A — Results of Operations
  14. [14] Item 7, MD&A — Consolidated Statements of Operations Data
  15. [15] Item 7, MD&A — Results of Operations
  16. [16] Item 7, MD&A — Consolidated Statements of Operations Data
  17. [17] Item 7, MD&A — Consolidated Statements of Operations Data
  18. [18] Item 7, MD&A — Consolidated Statements of Operations Data
  19. [19] Item 7, MD&A — Other Financial Data
  20. [20] Item 7, MD&A — Other Financial Data
  21. [21] Item 7, MD&A — Consolidated Balance Sheet Data
  22. [22] Item 7, MD&A — Consolidated Balance Sheet Data
  23. [23] Item 7, MD&A — Consolidated Balance Sheet Data
  24. [24] Item 8, Note 8 — Debt
  25. [25] Item 7, MD&A — Comparison of 2025 and 2024
  26. [26] Item 7, MD&A — Comparison of 2025 and 2024
  27. [27] Item 7, MD&A — Comparison of 2025 and 2024
  28. [28] Item 7, MD&A — Comparison of 2025 and 2024
  29. [29] Item 7, MD&A — Comparison of 2025 and 2024
  30. [30] Item 7, MD&A — Comparison of 2025 and 2024
  31. [31] Item 7, MD&A — Comparison of 2025 and 2024
  32. [32] Item 7, MD&A — Direct Operating Costs
  33. [33] Item 7, MD&A — Comparison of 2025 and 2024
  34. [34] Item 7, MD&A — Comparison of 2025 and 2024
  35. [35] Item 7, MD&A — Selling and Marketing Expense
  36. [36] Item 7, MD&A — Comparison of 2025 and 2024
  37. [37] Item 7, MD&A — Comparison of 2025 and 2024
  38. [38] Item 7, MD&A — General and Administrative Expense
  39. [39] Item 7, MD&A — Comparison of 2025 and 2024
  40. [40] Item 7, MD&A — Comparison of 2025 and 2024
  41. [41] Item 7, MD&A — Research and Development Expense
  42. [42] Item 7, MD&A — Comparison of 2025 and 2024
  43. [43] Item 7, MD&A — Comparison of 2025 and 2024
  44. [44] Item 7, MD&A — Depreciation Expense
  45. [45] Item 7, MD&A — Comparison of 2025 and 2024
  46. [46] Item 7, MD&A — Comparison of 2025 and 2024
  47. [47] Item 7, MD&A — Amortization Expense
  48. [48] Item 7, MD&A — Comparison of 2025 and 2024
  49. [49] Item 7, MD&A — Comparison of 2025 and 2024
  50. [50] Item 8, Note 3 — Acquisitions
  51. [51] Item 8, Note 3 — Acquisitions
  52. [52] Item 8, Note 3 — Acquisitions
  53. [53] Item 8, Note 3 — Acquisitions
  54. [54] Item 8, Note 3 — Acquisitions
  55. [55] Item 8, Note 13 — Related Parties
  56. [56] Item 8, Note 10 — Shareholders' Equity
  57. [57] Item 1, Business — Our Business Strategy
  58. [58] Item 1, Business — Our Business Strategy
  59. [59] Item 1, Business — Our Business Strategy
  60. [60] Item 1, Business — Our Business Strategy
  61. [61] Item 1, Business — Overview
  62. [62] Item 8, Note 3 — Acquisitions
  63. [63] Item 8, Note 3 — Acquisitions
  64. [64] Item 8, Note 3 — Acquisitions
  65. [65] Item 1, Business — Our Business Strategy
  66. [66] Item 1, Business — Our Business Strategy
  67. [67] Item 1, Business — Our Business Strategy
  68. [68] Item 1, Business — Our Business Strategy
  69. [69] Item 1, Business — Our Business Strategy
  70. [70] Item 1, Business — Employees
  71. [71] Item 7, MD&A — Research and Development Expense
  72. [72] Item 7, MD&A — Investing Activities
  73. [73] Item 7, MD&A — Financing Activities
  74. [74] Item 8, Note 8 — Debt
  75. [75] Item 1, Business — Research and Development
  76. [76] Item 1A, Risk Factors — We use and plan to expand our use of artificial intelligence, and challenges associated with the development, deployment and regulation of AI technologies could adversely affect our business, reputation and results of operations.
  77. [77] Item 1A, Risk Factors — We use and plan to expand our use of artificial intelligence, and challenges associated with the development, deployment and regulation of AI technologies could adversely affect our business, reputation and results of operations.
  78. [78] Item 1A, Risk Factors — We may not be successful in our artificial intelligence initiatives, which could adversely affect our business, reputation, or financial results.
  79. [79] Item 1A, Risk Factors — The continued success of our business model is heavily dependent upon our offshore operations, and any disruption to those operations will adversely affect us.
  80. [80] Item 1A, Risk Factors — The continued success of our business model is heavily dependent upon our offshore operations, and any disruption to those operations will adversely affect us.
  81. [81] Item 1A, Risk Factors — The continued success of our business model is heavily dependent upon our offshore operations, and any disruption to those operations will adversely affect us.
  82. [82] Item 1A, Risk Factors — The continued success of our business model is heavily dependent upon our offshore operations, and any disruption to those operations will adversely affect us.
  83. [83] Item 1A, Risk Factors — Risks Related to Macroeconomics Conditions
  84. [84] Item 1A, Risk Factors — The continued success of our business model is heavily dependent upon our offshore operations, and any disruption to those operations will adversely affect us.
  85. [85] Item 1A, Risk Factors — The continued success of our business model is heavily dependent upon our offshore operations, and any disruption to those operations will adversely affect us.
  86. [86] Item 1A, Risk Factors — Our proprietary software or service delivery platform may not operate properly, which could damage our reputation, give rise to claims against us, or divert application of our resources from other purposes, any of which could harm our business and operating results.
  87. [87] Item 1A, Risk Factors — Systems failures, cyberattacks or other events and resulting interruptions in the availability of or degradation in the performance of our websites, applications, products or services could harm our business.
  88. [88] Item 1A, Risk Factors — We use and plan to expand our use of artificial intelligence, and challenges associated with the development, deployment and regulation of AI technologies could adversely affect our business, reputation and results of operations.
  89. [89] Item 1A, Risk Factors — We operate in a highly competitive industry, and our competitors may be able to compete more efficiently or evolve more rapidly than we do, which could have a material adverse effect on our business, revenue, growth rates and market share.
  90. [90] Item 1A, Risk Factors — If we are unable to successfully introduce new products or services or fail to keep pace with advances in technology, we would not be able to maintain our customers or grow our business, which will have a material adverse effect on our business.
  91. [91] Item 1A, Risk Factors — Changes in the healthcare industry could affect the demand for our services and may result in a decrease in our revenues and market share.
  92. [92] Item 1A, Risk Factors — If the revenues of our customers decrease, or if our customers cancel or elect not to renew their contracts, our revenue will decrease.
  93. [93] Item 1A, Risk Factors — As a result of our variable sales and implementation cycles, we may be unable to recognize revenue from prospective customers on a timely basis and we may not be able to offset expenditures.
  94. [94] Item 1A, Risk Factors — If a breach of our measures protecting personal data covered by HIPAA or the HITECH Act occurs, we may incur significant liabilities.
  95. [95] Item 1A, Risk Factors — Our Series A and Series B Preferred Stock rank junior to all of our indebtedness and other liabilities.
  96. [96] Item 1A, Risk Factors — In December 2023 we suspended the payment of the dividends on the Preferred Stock. The Company resumed paying monthly dividends in February 2025, paying one month of the arrearage each month for the rest of the year. The Company has also announced that starting with the February 2026 dividend payment, it will start paying double dividends monthly on the Series B Preferred Stock to reduce the dividends in arrears. We may not be able to continue to pay dividends on the Preferred Stock if we fall out of compliance with our loan covenants and are prohibited by our bank lender from paying dividends or if we have insufficient cash to make dividend payments.
  97. [97] Item 8, Note 10 — Shareholders' Equity
  98. [98] Item 1, Business — Our Business Strategy
  99. [99] Item 1, Business — Our Business Strategy
  100. [100] Item 1, Business — Our Business Strategy
  101. [101] Item 1, Business — Our Business Strategy
  102. [102] Item 1, Business — Our Business Strategy
  103. [103] Item 1, Business — Our Business Strategy

Analysis on 5/22/2026