Returns to GAAP Profitability, Achieves Record Cash Flow, Resumes Dividends & Strengthens Balance Sheet
SOMERSET, N.J., March 13, 2025 (GLOBE NEWSWIRE) -- CareCloud, Inc. (Nasdaq: CCLD, CCLDO, CCLDP), a leader in healthcare technology and generative AI solutions, today announced strong financial results for the full year ended December 31, 2024. The Company's strategic execution and AI-driven innovation have fueled a transformational turnaround, positioning CareCloud for continued profitability and long-term growth. CareCloud's management team will discuss these results and provide insights into 2025 growth strategies in a live conference call today at 8:30 a.m. ET.
Full Year 2024 Performance: An impressive turnaround from 2023
- GAAP net income of $7.9 million, compared to a net loss of $48.7 million last year
- Adjusted EBITDA of $24.1 million, compared to $15.4 million in 2023, an increase of 56%
- Free cash flow of $13.2 million, compared to $3.8 million last year, an increase of 244%
- Revenue of $110.8 million, compared to $117.1 million in 2023
Fourth Quarter 2024: A Strong Finish
- GAAP net income of $3.3 million, compared to a net loss of $43.7 million in Q4 2023
- Adjusted EBITDA of $7.1 million, compared to $4.1 million in Q4 2023, an increase of 73%
- Revenue of $28.2 million, compared to $28.4 million in Q4 2023
Recent Operational Wins:
- Series A Preferred Stock Conversion - Reduces annual dividend burden by $7.7 million, converting 3.5 million preferred shares into 26 million common shares
- Resumed Preferred Dividends - Payments restarted in February 2025
- Fully Repaid Credit Line - Repaid Silicon Valley Bank facility using internally generated cash flow
"AI is supercharging our operations," said A. Hadi Chaudhry, Co-CEO of CareCloud. "From clinical workflows to revenue cycle automation, AI is making us faster, smarter, and more efficient. This will fuel even greater profitability in 2025."
"We've successfully transformed our cost structure and positioned CareCloud for future growth," added Co-CEO Stephen Snyder.
"During January 2025, the number of authorized common shares were increased from 35 million to 85 million and we declared the payment of two months of Preferred Stock dividends to be paid in February and March of 2025" said Norman Roth, Interim CFO and Corporate Controller of CareCloud. "In March 2025, we converted 3.5 million shares of Series A Preferred Stock into common stock, which resulted in the issuance of 26 million additional common shares. This conversion included all accrued and unpaid dividends on the Series A Preferred Stock which was converted. The conversion will yield substantial dividend savings every month, satisfied $11.4 million of accrued but unpaid dividends and put us in an excellent position to reinvest those funds into the Company."
Full year 2024 Financial Results
Revenue for the year 2024 was $110.8 million, compared to $117.1 million for the year 2023.
For the year 2024, the Company's GAAP net income was $7.9 million, compared to a GAAP net loss of $48.7 million for the year 2023.
Adjusted net income was $10.5 million, or $0.65 per share.
Full year adjusted EBITDA was $24.1 million, an increase of $8.7 million from $15.4 million from last year.
Fourth Quarter 2024 Financial Results
Revenue for the fourth quarter 2024 was $28.2 million, compared to $28.4 million for the fourth quarter of 2023.
Fourth quarter 2024 GAAP net income was $3.3 million, as compared to a net loss of $43.7 million in the same period last year. The GAAP net income was $0.00 per share, based on the net loss attributable to common shareholders, which takes into account the preferred stock dividends earned, whether or not they were declared or paid during the quarter.
Adjusted EBITDA for the fourth quarter 2024 was $7.1 million, or 25% of revenue, compared to $4.1 million in the same period last year.
Adjusted net income was $3.9 million, or $0.24 per share.
Norman Roth commented "this is our third consecutive quarter of positive GAAP net income and our largest quarterly net income since Q4 2021. It was also the highest quarterly adjusted EBITDA we have reported in two years. We were able to use the profits and cash flows we generated to fully pay the outstanding balance on our Silicon Valley Bank line of credit. We have accomplished what we set out to achieve in 2024, leaving ourselves in a strong position for 2025."
Cash Balances and Capital
As of December 31, 2024, the Company had approximately $5.1 million of cash. Net working capital was $5.2 million. During the full year 2024, cash flow from operations was approximately $20.6 million, compared to $15.5 million in 2023.
On December 31, 2024, the Company had 4,526,231 shares of Series A Preferred Stock outstanding and 1,511,372 shares of non-convertible Series B Preferred Stock outstanding. As of December 31, 2024, the Series A and B shares both accrued dividends at the rate of 8.75% per annum, based on the $25.00 per share liquidation preference (equivalent to $ $2.1875 annually per share), and they are redeemable at the Company's option once the preferred stock dividends are brought current. Effective September 12, 2024, the dividend on the Series A Preferred Stock was reduced from 11% to 8.75% per annum or $2.75 to $2.1875 annually per share. Due to the Series A Preferred Stock conversion in March 2025, the number of Series A Preferred Stock shares outstanding was reduced to 984,530 shares.
2025 Guidance: Poised for More Growth
CareCloud is raising the bar for 2025, expecting:
| For the Fiscal Year Ending December 31, 2025 Forward-Looking Guidance | ||||
| Revenue | $111 - $114 million | |||
| Adjusted EBITDA | $26 - $28 million | |||
| Net Income Per Share (EPS) | $0.10 - $0.13 | |||
The Company anticipates full year 2025 revenue of approximately $111 to $114 million. Revenue guidance is based on management's expectations regarding revenue from existing clients, organic growth in new client additions and anticipated number of acquisitions.
Adjusted EBITDA is expected to be $26 to $28 million for full year 2025 and reflects improvements from the Company's cost reduction efforts. EPS is expected to be $0.10 to $0.13 for full year 2025.
Conference Call Information
CareCloud management will host a conference call today at 8:30 a.m. Eastern Time to discuss the full year 2024 results. The live webcast of the conference call and related presentation slides can be accessed at ir.carecloud.com/events. An audio-only option is available by dialing 201-389-0920 and referencing "CareCloud Full Year 2024 Earnings Call." Investors who opt for audio-only will need to download the related slides at ir.carecloud.com/events.
A replay of the conference call and related presentation slides will be available approximately three hours after conclusion of the call at the same link. An audio-only option can also be accessed by dialing 412-317-6671 and providing the access code 13751992.
Use of Non-GAAP Financial Measures
In our earnings releases, prepared remarks, conference calls, slide presentations, and webcasts, we use and discuss non-GAAP financial measures, as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the condensed consolidated financial statements. Our earnings press releases containing such non-GAAP reconciliations can be found in the Investor Relations section of our web site at ir.carecloud.com.
Forward-Looking Statements
This press release contains various forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements relate to anticipated future events, future results of operations or future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "might," "will," "shall," "should," "could," "intends," "expects," "plans," "goals," "projects," "anticipates," "believes," "seeks," "estimates," "forecasts," "predicts," "possible," "potential," "target," or "continue" or the negative of these terms or other comparable terminology.
Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Forward-looking statements in this press release include, without limitation, statements reflecting management's expectations for future financial performance and operating expenditures, expected growth, profitability and business outlook, the impact of pandemics on our financial performance and business activities, and the expected results from the integration of our acquisitions.
These forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are only predictions, are uncertain and involve substantial known and unknown risks, uncertainties and other factors which may cause our (or our industry's) actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all of the risks and uncertainties that could have an impact on the forward-looking statements, including without limitation, risks and uncertainties relating to the Company's ability to manage growth, migrate newly acquired customers and retain new and existing customers, maintain cost-effective global operations, increase operational efficiency and reduce operating costs, predict and properly adjust to changes in reimbursement and other industry regulations and trends, retain the services of key personnel, develop new technologies, upgrade and adapt legacy and acquired technologies to work with evolving industry standards, compete with other companies' products and services competitive with ours, manage and keep our information systems secure and other important risks and uncertainties referenced and discussed under the heading titled "Risk Factors" in the Company's filings with the Securities and Exchange Commission.
The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligations to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
About CareCloud
CareCloud (Nasdaq: CCLD, CCLDO, CCLDP) brings disciplined innovation and generative AI solutions to the business of healthcare. Our suite of technology-enabled solutions helps clients increase financial and operational performance, streamline clinical workflows and improve the patient experience. More than 40,000 providers count on CareCloud to help them improve patient care while reducing administrative burdens and operating costs. Learn more about our products and services, including revenue cycle management (RCM), practice management (PM), electronic health records (EHR), artificial intelligence (AI), business intelligence (BI), patient experience management (PXM) and digital health, at www.carecloud.com.
Follow CareCloud on LinkedIn, X and Facebook.
For additional information, please visit our website at www.carecloud.com. To listen to video presentations by CareCloud's management team, read recent press releases and view the latest investor presentation, please visit ir.carecloud.com.
SOURCE CareCloud
Company Contact:
Norman Roth
Interim Chief Financial Officer and Corporate Controller
CareCloud, Inc.
nroth@carecloud.com
Investor Contact:
Stephen Snyder
Co-Chief Executive Officer
CareCloud, Inc.
ir@carecloud.com
| CARECLOUD, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| AS OF DECEMBER 31, 2024 AND 2023 | ||||||||
| ($ in thousands, except share and per share amounts) | ||||||||
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 5,145 | $ | 3,331 | ||||
| Accounts receivable - net | 12,774 | 11,888 | ||||||
| Contract asset | 4,334 | 5,094 | ||||||
| Inventory | 574 | 465 | ||||||
| Current assets - related party | 16 | 16 | ||||||
| Prepaid expenses and other current assets | 1,957 | 2,449 | ||||||
| Total current assets | 24,800 | 23,243 | ||||||
| Property and equipment - net | 5,290 | 5,317 | ||||||
| Operating lease right-of-use assets | 3,133 | 4,365 | ||||||
| Intangible assets - net | 18,698 | 25,074 | ||||||
| Goodwill | 19,186 | 19,186 | ||||||
| Other assets | 507 | 641 | ||||||
| TOTAL ASSETS | $ | 71,614 | $ | 77,826 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,565 | $ | 5,798 | ||||
| Accrued compensation | 1,817 | 3,444 | ||||||
| Accrued expenses | 4,951 | 5,065 | ||||||
| Operating lease liability (current portion) | 1,287 | 1,888 | ||||||
| Deferred revenue (current portion) | 1,212 | 1,380 | ||||||
| Notes payable (current portion) | 310 | 292 | ||||||
| Dividend payable | 5,438 | 5,433 | ||||||
| Total current liabilities | 19,580 | 23,300 | ||||||
| Notes payable | 26 | 37 | ||||||
| Borrowings under line of credit | - | 10,000 | ||||||
| Operating lease liability | 1,847 | 2,516 | ||||||
| Deferred revenue | 387 | 256 | ||||||
| Total liabilities | 21,840 | 36,109 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| SHAREHOLDERS' EQUITY: | ||||||||
| Preferred stock, $0.001 par value - authorized 7,000,000 shares. Series A, issued and outstanding 4,526,231 shares at December 31, 2024 and December 31, 2023. Series B, issued and outstanding 1,511,372 and 1,468,792 shares at December 31, 2024 and December 31, 2023, respectively | 6 | 6 | ||||||
| Common stock, $0.001 par value - authorized 35,000,000 shares. Issued 16,997,035 and 16,620,891 shares at December 31, 2024 and December 31, 2023, respectively. Outstanding 16,256,236 and 15,880,092 shares at December 31, 2024 and December 31, 2023, respectively | 17 | 17 | ||||||
| Additional paid-in capital | 121,046 | 120,706 | ||||||
| Accumulated deficit | (66,630 | ) | (74,481 | ) | ||||
| Accumulated other comprehensive loss | (4,003 | ) | (3,869 | ) | ||||
| Less: 740,799 common shares held in treasury, at cost at December 31, 2024 and December 31, 2023 | (662 | ) | (662 | ) | ||||
| Total shareholders' equity | 49,774 | 41,717 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 71,614 | $ | 77,826 | ||||
| CARECLOUD, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2024 AND 2023 | ||||||||||||||||
| ($ in thousands, except share and per share amounts) | ||||||||||||||||
| Three Months Ended | ||||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| NET REVENUE | $ | 28,239 | $ | 28,416 | $ | 110,837 | $ | 117,059 | ||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Direct operating costs | 15,003 | 16,974 | 60,842 | 70,817 | ||||||||||||
| Selling and marketing | 1,423 | 2,121 | 6,232 | 9,650 | ||||||||||||
| General and administrative | 3,996 | 4,946 | 16,123 | 21,464 | ||||||||||||
| Research and development | 1,013 | 1,213 | 3,781 | 4,736 | ||||||||||||
| Depreciation and amortization | 3,257 | 4,120 | 14,142 | 14,402 | ||||||||||||
| Goodwill impairment charges | - | 42,000 | - | 42,000 | ||||||||||||
| Lease terminations, unoccupied lease charges and restructuring costs | 91 | 675 | 596 | 1,105 | ||||||||||||
| Total operating expenses | 24,783 | 72,049 | 101,716 | 164,174 | ||||||||||||
| OPERATING INCOME (LOSS) | 3,456 | (43,633 | ) | 9,121 | (47,115 | ) | ||||||||||
| OTHER: | ||||||||||||||||
| Interest income | 20 | 30 | 88 | 154 | ||||||||||||
| Interest expense | (68 | ) | (365 | ) | (900 | ) | (1,194 | ) | ||||||||
| Other expense - net | (71 | ) | (292 | ) | (298 | ) | (883 | ) | ||||||||
| INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES | 3,337 | (44,260 | ) | 8,011 | (49,038 | ) | ||||||||||
| Income tax provision (benefit) | 41 | (568 | ) | 160 | (364 | ) | ||||||||||
| NET INCOME (LOSS) | $ | 3,296 | $ | (43,692 | ) | $ | 7,851 | $ | (48,674 | ) | ||||||
| Preferred stock dividend | 3,286 | 3,917 | 12,310 | 15,674 | ||||||||||||
| NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 10 | $ | (47,609 | ) | $ | (4,459 | ) | $ | (64,348 | ) | |||||
| Net loss per common share: basic and diluted | $ | 0.00 | $ | (3.00 | ) | $ | (0.28 | ) | $ | (4.11 | ) | |||||
| Weighted-average common shares used to compute basic and diluted loss per share | 16,244,211 | 15,874,550 | 16,146,975 | 15,669,472 | ||||||||||||
| CARECLOUD, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 | ||||||||
| ($ in thousands) | ||||||||
| 2024 | 2023 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | 7,851 | $ | (48,674 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 14,469 | 14,889 | ||||||
| Lease amortization | 1,994 | 2,152 | ||||||
| Deferred revenue | (37 | ) | (92 | ) | ||||
| Provision for expected credit losses | 334 | 454 | ||||||
| Benefit for deferred income taxes | - | (525 | ) | |||||
| Foreign exchange (gain) loss | (130 | ) | 790 | |||||
| Interest accretion | 592 | 688 | ||||||
| Goodwill impairment charges | - | 42,000 | ||||||
| Stock-based compensation expense | 115 | 4,886 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (1,220 | ) | 2,246 | |||||
| Contract asset | 760 | (695 | ) | |||||
| Inventory | (109 | ) | (84 | ) | ||||
| Other assets | 673 | 682 | ||||||
| Accounts payable and other liabilities | (4,650 | ) | (3,256 | ) | ||||
| Net cash provided by operating activities | 20,642 | 15,461 | ||||||
| INVESTING ACTIVITIES: | ||||||||
| Purchases of property and equipment | (1,697 | ) | (3,063 | ) | ||||
| Capitalized software and other intangible assets | (5,709 | ) | (8,550 | ) | ||||
| Net cash used in investing activities | (7,406 | ) | (11,613 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Preferred stock dividends paid | - | (14,300 | ) | |||||
| Settlement of tax withholding obligations on stock issued to employees | (579 | ) | (1,524 | ) | ||||
| Repayments of notes payable | (677 | ) | (888 | ) | ||||
| Proceeds from issuance of Series B Preferred Stock, net of expenses | - | 1,427 | ||||||
| Proceeds from line of credit | - | 14,700 | ||||||
| Repayment of line of credit | (10,000 | ) | (12,700 | ) | ||||
| Net cash used in financing activities | (11,256 | ) | (13,285 | ) | ||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | (166 | ) | 469 | |||||
| NET INCREASE (DECREASE) IN CASH | 1,814 | (8,968 | ) | |||||
| CASH - Beginning of the year | 3,331 | 12,299 | ||||||
| CASH - End of the year | $ | 5,145 | $ | 3,331 | ||||
| SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Dividends declared, not paid | $ | 5 | $ | 5,433 | ||||
| Purchase of prepaid insurance with assumption of note | $ | 685 | $ | 656 | ||||
| Reclass of deposits for property and equipment placed in service | $ | 296 | $ | - | ||||
| SUPPLEMENTAL INFORMATION - Cash paid during the year for: | ||||||||
| Income taxes | $ | 157 | $ | 144 | ||||
| Interest | $ | 677 | $ | 927 | ||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO COMPARABLE GAAP MEASURES
The following is a reconciliation of the non-GAAP financial measures used by us to describe our financial results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). An explanation of these measures is also included below under the heading "Explanation of Non-GAAP Financial Measures."
While management believes that these non-GAAP financial measures provide useful supplemental information to investors regarding the underlying performance of our business operations, investors are reminded to consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies, and management may utilize other measures to illustrate performance in the future. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP.
Adjusted EBITDA to GAAP Net Income (Loss)
Set forth below is a reconciliation of our "adjusted EBITDA" to our GAAP net income (loss).
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| ($ in thousands) | ||||||||||||||||
| Net revenue | $ | 28,239 | $ | 28,416 | $ | 110,837 | $ | 117,059 | ||||||||
| GAAP net income (loss) | 3,296 | (43,692 | ) | 7,851 | (48,674 | ) | ||||||||||
| Provision (benefit) for income taxes | 41 | (568 | ) | 160 | (364 | ) | ||||||||||
| Net interest expense | 48 | 335 | 812 | 1,040 | ||||||||||||
| Foreign exchange loss / other expense | 91 | 309 | 335 | 918 | ||||||||||||
| Stock-based compensation expense, net of restructuring costs | 306 | 933 | 115 | 4,716 | ||||||||||||
| Depreciation and amortization | 3,257 | 4,120 | 14,142 | 14,402 | ||||||||||||
| Transaction and integration costs | 11 | 16 | 46 | 286 | ||||||||||||
| Goodwill impairment charges | - | 42,000 | - | 42,000 | ||||||||||||
| Lease terminations, unoccupied lease charges and restructuring costs | 91 | 675 | 596 | 1,105 | ||||||||||||
| Adjusted EBITDA | $ | 7,141 | $ | 4,128 | $ | 24,057 | $ | 15,429 | ||||||||
Non-GAAP Adjusted Operating Income to GAAP Operating Income (Loss)
Set forth below is a reconciliation of our non-GAAP "adjusted operating income" and non-GAAP "adjusted operating margin" to our GAAP operating income (loss) and GAAP operating margin.
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| ($ in thousands) | ||||||||||||||||
| Net revenue | $ | 28,239 | $ | 28,416 | $ | 110,837 | $ | 117,059 | ||||||||
| GAAP net income (loss) | 3,296 | (43,692 | ) | 7,851 | (48,674 | ) | ||||||||||
| Provision (benefit) for income taxes | 41 | (568 | ) | 160 | (364 | ) | ||||||||||
| Net interest expense | 48 | 335 | 812 | 1,040 | ||||||||||||
| Other expense - net | 71 | 292 | 298 | 883 | ||||||||||||
| GAAP operating income (loss) | 3,456 | (43,633 | ) | 9,121 | (47,115 | ) | ||||||||||
| GAAP operating margin | 12.2 | % | (153.6 | %) | 8.2 | % | (40.2 | %) | ||||||||
| Stock-based compensation expense, net of restructuring costs | 306 | 933 | 115 | 4,716 | ||||||||||||
| Amortization of purchased intangible assets | 76 | 1,200 | 1,577 | 4,975 | ||||||||||||
| Transaction and integration costs | 11 | 16 | 46 | 286 | ||||||||||||
| Goodwill impairment charges | - | 42,000 | - | 42,000 | ||||||||||||
| Lease terminations, unoccupied lease charges and restructuring costs | 91 | 675 | 596 | 1,105 | ||||||||||||
| Non-GAAP adjusted operating income | $ | 3,940 | $ | 1,191 | $ | 11,455 | $ | 5,967 | ||||||||
| Non-GAAP adjusted operating margin | 14.0 | % | 4.2 | % | 10.3 | % | 5.1 | % | ||||||||
Non-GAAP Adjusted Net Income to GAAP Net Income (Loss)
Set forth below is a reconciliation of our non-GAAP "adjusted net income" and non-GAAP "adjusted net income per share" to our GAAP net income (loss) and GAAP net loss per share.
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| ($ in thousands, except for per share amounts) | ||||||||||||||||
| GAAP net income (loss) | $ | 3,296 | $ | (43,692 | ) | $ | 7,851 | $ | (48,674 | ) | ||||||
| Foreign exchange loss / other expense | 91 | 309 | 335 | 918 | ||||||||||||
| Stock-based compensation expense, net of restructuring costs | 306 | 933 | 115 | 4,716 | ||||||||||||
| Amortization of purchased intangible assets | 76 | 1,200 | 1,577 | 4,975 | ||||||||||||
| Transaction and integration costs | 11 | 16 | 46 | 286 | ||||||||||||
| Goodwill impairment charges | - | 42,000 | - | 42,000 | ||||||||||||
| Lease terminations, unoccupied lease charges and restructuring costs | 91 | 675 | 596 | 1,105 | ||||||||||||
| Income tax benefit related to goodwill | - | (606 | ) | - | (525 | ) | ||||||||||
| Non-GAAP adjusted net income | $ | 3,871 | $ | 835 | $ | 10,520 | $ | 4,801 | ||||||||
| End-of-period shares | 16,256,236 | 15,880,092 | 16,256,236 | 15,880,092 | ||||||||||||
| Non-GAAP adjusted net income per share | $ | 0.24 | $ | 0.05 | $ | 0.65 | $ | 0.30 | ||||||||
For purposes of determining non-GAAP adjusted net income per share, we used the number of common shares outstanding as of December 31, 2024 and 2023.
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| GAAP net loss attributable to common shareholders, per share | $ | 0.00 | $ | (3.00 | ) | $ | (0.28 | ) | $ | (4.11 | ) | |||||
| Impact of preferred stock dividend | 0.20 | 0.25 | 0.76 | 1.04 | ||||||||||||
| Net income (loss) per end-of-period share | 0.20 | (2.75 | ) | 0.48 | (3.07 | ) | ||||||||||
| Foreign exchange loss / other expense | - | 0.02 | 0.02 | 0.06 | ||||||||||||
| Stock-based compensation expense, net of restructuring costs | 0.02 | 0.06 | 0.01 | 0.30 | ||||||||||||
| Amortization of purchased intangible assets | 0.01 | 0.08 | 0.10 | 0.31 | ||||||||||||
| Transaction and integration costs | 0.00 | - | 0.00 | 0.02 | ||||||||||||
| Goodwill impairment charges | - | 2.65 | - | 2.65 | ||||||||||||
| Lease terminations, unoccupied lease charges and restructuring costs | 0.01 | 0.03 | 0.04 | 0.07 | ||||||||||||
| Income tax benefit related to goodwill | - | (0.04 | ) | - | (0.04 | ) | ||||||||||
| Non-GAAP adjusted earnings per share | $ | 0.24 | $ | 0.05 | $ | 0.65 | $ | 0.30 | ||||||||
| End-of-period common shares | 16,256,236 | 15,880,092 | 16,256,236 | 15,880,092 | ||||||||||||
| Outstanding unvested RSUs | 242,500 | 733,908 | 242,500 | 733,908 | ||||||||||||
| Total fully diluted shares | 16,498,736 | 16,614,000 | 16,498,736 | 16,614,000 | ||||||||||||
| Non-GAAP adjusted diluted earnings per share | $ | 0.23 | $ | 0.05 | $ | 0.64 | $ | 0.29 | ||||||||
Net cash provided by operating activities to free cash flow
Set forth below is a reconciliation of our non-GAAP "free cash flow" to our GAAP net cash provided by operating activities.
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| ($ in thousands) | ||||||||||||||||
| Net cash provided by operating activities | $ | 5,229 | $ | 3,740 | $ | 20,642 | $ | 15,461 | ||||||||
| Purchases of property and equipment | (938 | ) | (376 | ) | (1,697 | ) | (3,063 | ) | ||||||||
| Capitalized software and other intangible assets | (1,324 | ) | (1,915 | ) | (5,709 | ) | (8,550 | ) | ||||||||
| Free cash flow | $ | 2,967 | $ | 1,449 | $ | 13,236 | $ | 3,848 | ||||||||
| Net cash used in investing activities 1 | $ | (2,262 | ) | $ | (2,291 | ) | $ | (7,406 | ) | $ | (11,613 | ) | ||||
| Net cash used in financing activities | $ | (578 | ) | $ | (4,879 | ) | $ | (11,256 | ) | $ | (13,285 | ) | ||||
1.Net cash used in investing activities includes purchases of property and equipment and capitalized software and other intangible assets, which are also included in our computation of free cash flow.
Explanation of Non-GAAP Financial Measures
We report our financial results in accordance with accounting principles generally accepted in the United States of America, or GAAP. However, management believes that, in order to properly understand our short-term and long-term financial and operational trends, investors may wish to consider the impact of certain non-cash or non-recurring items, when used as a supplement to financial performance measures in accordance with GAAP. These items result from facts and circumstances that vary in frequency and impact on continuing operations. Management also uses results of operations before such items to evaluate the operating performance of CareCloud and compare it against past periods, make operating decisions, and serve as a basis for strategic planning. These non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by eliminating certain non-cash expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods more difficult, obscure trends in ongoing operations, or reduce management's ability to make useful forecasts. Management believes that these non-GAAP financial measures provide additional means of evaluating period-over-period operating performance. In addition, management understands that some investors and financial analysts find this information helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors.
Management uses adjusted EBITDA, adjusted operating income, adjusted operating margin, and non-GAAP adjusted net income to provide an understanding of aspects of operating results before the impact of investing and financing charges and income taxes. Adjusted EBITDA may be useful to an investor in evaluating our operating performance and liquidity because this measure excludes non-cash expenses as well as expenses pertaining to investing or financing transactions. Management defines "adjusted EBITDA" as the sum of GAAP net income (loss) before provision for (benefit from) income taxes, net interest expense, other (income) expense, stock-based compensation expense, depreciation and amortization, integration costs, transaction costs, impairment charges and changes in contingent consideration.
Management defines "non-GAAP adjusted operating income" as the sum of GAAP operating income (loss) before stock-based compensation expense, amortization of purchased intangible assets, integration costs, transaction costs, impairment charges and changes in contingent consideration, and "non-GAAP adjusted operating margin" as non-GAAP adjusted operating income divided by net revenue.
Management defines "non-GAAP adjusted net income" as the sum of GAAP net income (loss) before stock-based compensation expense, amortization of purchased intangible assets, other (income) expense, integration costs, transaction costs, impairment charges, changes in contingent consideration, any tax impact related to these preceding items and income tax expense related to goodwill, and "non-GAAP adjusted net income per share" as non-GAAP adjusted net income divided by common shares outstanding at the end of the period.
Management defined "free cash flow" as the sum of net cash provided by operating activities less cash used for purchases of property and equipment and cash used to develop capitalized software and other intangible assets.
Management considers all of these non-GAAP financial measures to be important indicators of our operational strength and performance of our business and a good measure of our historical operating trends, in particular the extent to which ongoing operations impact our overall financial performance.
In addition to items routinely excluded from non-GAAP EBITDA, management excludes or adjusts each of the items identified below from the applicable non-GAAP financial measure referenced above for the reasons set forth with respect to that excluded item:
Foreign exchange loss / other expense. Other expense is excluded because foreign currency gains and losses and other non-operating expenses are expenditures that management does not consider part of ongoing operating results when assessing the performance of our business, and also because the total amount of the expense is partially outside of our control. Foreign currency gains and losses are based on global market factors which are unrelated to our performance during the period in which the gains and losses are recorded.
Stock-based compensation expense (benefit). Stock-based compensation expense (benefit) is excluded because this is primarily a non-cash expenditure that management does not consider part of ongoing operating results when assessing the performance of our business, and also because the total amount of the expenditure is partially outside of our control because it is based on factors such as stock price, volatility, and interest rates, which may be unrelated to our performance during the period in which the expenses are incurred. Stock-based compensation expense includes cash-settled awards based on changes in the stock price.
Amortization of purchased intangible assets. Purchased intangible assets are amortized over their estimated useful lives and generally cannot be changed or influenced by management after the acquisition. Accordingly, this item is not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are recorded.
Transaction costs. Transaction costs are upfront costs related to acquisitions and related transactions, such as brokerage fees, pre-acquisition accounting costs and legal fees, and other upfront costs related to specific transactions. Management believes that such expenses do not have a direct correlation to future business operations, and therefore, these costs are not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred.
Integration costs. Integration costs are severance payments for certain employees relating to our acquisitions and exit costs related to terminating leases and other contractual agreements. Accordingly, management believes that such expenses do not have a direct correlation to future business operations, and therefore, these costs are not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred.
Lease terminations, unoccupied lease charges and restructuring costs. Net loss on lease terminations represents the write-off of leasehold improvements and gains or losses as a result of an early lease termination. Unoccupied lease charges represent the portion of lease and related costs for vacant space not being utilized by the Company. Restructuring costs primarily consist of severance and separation costs associated with the optimization of the Company's operations and profitability improvements. Management believes that such expenses do not have a direct correlation to future business operations, and therefore, these costs are not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred.
Income tax provision related to goodwill. Income tax provision resulting from the amortization of goodwill related to our acquisitions represents a charge (benefit) to record the tax effect resulting from amortizing goodwill over 15 years for tax purposes. Goodwill is not amortized for GAAP reporting. Any income tax expense is not anticipated to result in a cash payment.
Free cash flow. Management believes that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating the Company's financial performance. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net operating results as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. Additionally, the Company's definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our condensed consolidated statements of cash flows.
