CareCloud Reports Second Quarter 2024 Results
CareCloud Inc (Nasdaq: CCLD) reported its Q2 2024 financial results, showing improvements in profitability and cash flow. Key highlights include:
- GAAP net income of $1.7 million, compared to a net loss of $1.8 million in Q2 2023
- Adjusted EBITDA of $6.4 million, up 67% from Q2 2023
- Revenue of $28.1 million, slightly down from $29.4 million in Q2 2023
- Year-to-date free cash flow of $4.9 million, a 265% increase from the same period last year
The company has identified $26 million in annualized expense reductions and reduced its credit facility balance to $2.5 million. CareCloud aims to further improve profitability and eliminate debt in the coming months.
CareCloud Inc (Nasdaq: CCLD) ha comunicato i risultati finanziari del secondo trimestre 2024, evidenziando miglioramenti nella redditività e nel flusso di cassa. I punti salienti includono:
- Utile netto GAAP di $1.7 milioni, rispetto a una perdita netta di $1.8 milioni nel secondo trimestre 2023
- EBITDA rettificato di $6.4 milioni, in aumento del 67% rispetto al secondo trimestre 2023
- Ricavi di $28.1 milioni, leggermente in calo rispetto ai $29.4 milioni del secondo trimestre 2023
- Flusso di cassa gratuito anno corrente di $4.9 milioni, un incremento del 265% rispetto allo stesso periodo dell'anno scorso
L'azienda ha identificato $26 milioni di riduzioni annualizzate delle spese e ha ridotto il saldo della sua linea di credito a $2.5 milioni. CareCloud punta a migliorare ulteriormente la redditività ed eliminare il debito nei prossimi mesi.
CareCloud Inc (Nasdaq: CCLD) informó sus resultados financieros del segundo trimestre de 2024, mostrando mejoras en la rentabilidad y el flujo de efectivo. Los puntos destacados incluyen:
- Ingreso neto GAAP de $1.7 millones, en comparación con una pérdida neta de $1.8 millones en el segundo trimestre de 2023
- EBITDA ajustado de $6.4 millones, un aumento del 67% en comparación con el segundo trimestre de 2023
- Ingresos de $28.1 millones, ligeramente por debajo de los $29.4 millones del segundo trimestre de 2023
- Flujo de efectivo libre acumulado de $4.9 millones, un incremento del 265% en comparación con el mismo período del año pasado
La empresa ha identificado $26 millones en reducciones de gastos anualizadas y ha reducido su saldo de crédito a $2.5 millones. CareCloud tiene como objetivo mejorar aún más la rentabilidad y eliminar la deuda en los próximos meses.
CareCloud Inc (Nasdaq: CCLD)는 2024년 2분기 재무 결과를 발표하며 수익성과 현금 흐름의 개선을 보여주었습니다. 주요 내용은 다음과 같습니다:
- GAAP 순이익 $1.7백만, 2023년 2분기 순손실 $1.8백만 대비 증가
- 조정된 EBITDA $6.4백만, 2023년 2분기 대비 67% 증가
- 수익 $28.1백만, 2023년 2분기의 $29.4백만에서 소폭 감소
- 올해 누적 무료 현금 흐름 $4.9백만, 지난해 같은 기간 대비 265% 증가
회사는 연간 비용 절감액 $26백만을 확인하고 신용 한도 잔액을 $2.5백만으로 줄였습니다. CareCloud는 앞으로 수익성을 더욱 개선하고 부채를 제거하는 것을 목표로 하고 있습니다.
CareCloud Inc (Nasdaq: CCLD) a publié ses résultats financiers du deuxième trimestre 2024, montrant des améliorations en matière de rentabilité et de flux de trésorerie. Les faits saillants incluent :
- Revenu net GAAP de 1,7 million de dollars, par rapport à une perte nette de 1,8 million de dollars au deuxième trimestre 2023
- EBITDA ajusté de 6,4 millions de dollars, en hausse de 67 % par rapport au deuxième trimestre 2023
- Chiffre d'affaires de 28,1 millions de dollars, légèrement en baisse par rapport à 29,4 millions de dollars au deuxième trimestre 2023
- Flux de trésorerie libre depuis le début de l'année de 4,9 millions de dollars, soit une augmentation de 265 % par rapport à la même période l'année dernière
L'entreprise a identifié 26 millions de dollars d'économies annuelles et a réduit le solde de sa ligne de crédit à 2,5 millions de dollars. CareCloud vise à améliorer encore la rentabilité et à éliminer la dette dans les mois à venir.
CareCloud Inc (Nasdaq: CCLD) hat seine finanziellen Ergebnisse für das zweite Quartal 2024 bekannt gegeben und Verbesserungen in der Rentabilität und im Cashflow aufgezeigt. Die wichtigsten Punkte sind:
- GAAP-Nettoeinkommen von $1,7 Millionen, verglichen mit einem Nettoverlust von $1,8 Millionen im zweiten Quartal 2023
- Bereinigtes EBITDA von $6,4 Millionen, ein Anstieg um 67% im Vergleich zum zweiten Quartal 2023
- Umsatz von $28,1 Millionen, leicht zurückgegangen von $29,4 Millionen im zweiten Quartal 2023
- Kostenfreier Cashflow seit Jahresbeginn von $4,9 Millionen, ein Anstieg um 265% im Vergleich zum gleichen Zeitraum des Vorjahres
Das Unternehmen hat jährliche Einsparungen von $26 Millionen identifiziert und den Saldo der Kreditlinie auf $2,5 Millionen gesenkt. CareCloud strebt an, die Rentabilität weiter zu verbessern und Schulden in den kommenden Monaten abzubauen.
- GAAP net income of $1.7 million in Q2 2024, compared to a net loss in Q2 2023
- Adjusted EBITDA increased by 67% to $6.4 million in Q2 2024
- Year-to-date free cash flow increased by 265% to $4.9 million
- Identified $26 million in annualized expense reductions
- Reduced credit facility balance from $10 million to $2.5 million
- Revenue decreased to $28.1 million in Q2 2024, compared to $29.4 million in Q2 2023
- Year-to-date revenue decreased to $54.1 million, compared to $59.4 million in the same period last year
Insights
CareCloud's Q2 2024 results show a significant turnaround in profitability. The company reported a GAAP net income of
However, revenue declined to
CareCloud's strategic pivot towards generative AI is a promising move in the healthcare technology sector. By leveraging AI to drive operating efficiencies, the company is positioning itself at the forefront of technological innovation in healthcare. This approach could potentially lead to:
- Improved service delivery and customer satisfaction
- Enhanced operational efficiencies and cost reductions
- Development of new, AI-driven products and services
CareCloud's Q2 results reflect a broader trend in the healthcare technology sector, where companies are prioritizing profitability over growth in a challenging economic environment. The
The recommendation from Glass Lewis for a "yes" vote on the Series A Preferred Stock Special Proxy suggests positive sentiment from institutional investors. This, combined with improved profitability, could enhance CareCloud's attractiveness to investors seeking stable, cash-generating businesses in the healthcare tech space. The company's ability to maintain this profitability while reigniting growth will be key to its long-term success and market positioning.
Continued Focus on Profitability and Free Cash Flow
SOMERSET, N.J., Aug. 13, 2024 (GLOBE NEWSWIRE) -- CareCloud, Inc. (Nasdaq: CCLD, CCLDO, CCLDP), a leader in healthcare technology and generative AI solutions for medical practices and health systems nationwide, announced financial and operational results for the quarter ended June 30, 2024. The Company’s management will conduct a conference call with related slides today at 8:30 a.m. Eastern Time to discuss these results and management’s outlook for the year.
Second Quarter 2024 Highlights
- GAAP net income of
$1.7 million , compared to a net loss of$1.8 million in Q2 2023 - Adjusted net income of
$3.0 million , or$0.18 per share - Adjusted EBITDA of
$6.4 million , compared to$3.8 million in Q2 2023, an increase of67% - Revenue of
$28.1 million , compared to$29.4 million in Q2 2023
Year-to-date 2024 Highlights
- GAAP net income of
$1.4 million , compared to a net loss of$2.2 million in the same period last year - Adjusted net income of
$3.2 million , or$0.20 per share - Adjusted EBITDA of
$10.1 million , compared to$8.1 million in the same period last year, an increase of25% - Free cash flow of
$4.9 million , compared to$1.3 million in the same period last year, an increase of265% - Revenue of
$54.1 million , compared to$59.4 million in the same period last year
Recent Operational Highlights
- Identified approximately
$26 million in annualized expense reductions since the initiative began in October 2023, of which$20 million in cost savings will be realized this year - Reduced our
$25 million credit facility balance from$10 million to$2.5 million as of today, representing a drawn balance of only10% of our line - Announced that Glass Lewis, a leading proxy vote advisory firm, has recommended a “yes” vote on CareCloud’s Series A Preferred Stock Special Proxy
“We have achieved our target of improving profitability as evidenced by the fact that we have paid down our credit facility balance to only
“As a team, we are succeeding at our goal of transforming our cost structure, positioning us to eliminate debt, resume dividends at the appropriate time and invest in CareCloud’s future growth,” said Stephen Snyder, President of CareCloud. “We are pleased to report that we have improved year-over-year free cash flow by
Second Quarter 2024 Financial Results
Revenue for the second quarter 2024 was
Second quarter 2024 GAAP net income was
Adjusted EBITDA for the second quarter 2024 was
Norman Roth, Interim Chief Financial Officer and Corporate Controller, commented “this is the first positive GAAP net income and the highest quarterly adjusted EBITDA we have reported in two years. We were able to use the profits and cash flows we generated to reduce the outstanding balance on our Silicon Valley Bank line of credit by
Six Month 2024 Financial Results
Revenue for the first six months of 2024 was
For the first six months of 2024, the Company’s GAAP net income was
During this period, adjusted EBITDA was
Cash Balances and Capital
As of June 30, 2024, the Company had approximately
Conference Call Information
CareCloud management will host a conference call today at 8:30 a.m. Eastern Time to discuss the second quarter 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 Second Quarter 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 one hour 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 13747693.
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, CCLDP, CCLDO) 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), business intelligence, patient experience management (PXM) and digital health, at www.carecloud.com.
Follow CareCloud on LinkedIn, Twitter 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:
Bill Korn
ir@carecloud.com
| CARECLOUD, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| ($ in thousands, except share and per share amounts) | ||||||||
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 2,617 | $ | 3,331 | ||||
| Accounts receivable - net | 13,079 | 11,888 | ||||||
| Contract asset | 4,800 | 5,094 | ||||||
| Inventory | 497 | 465 | ||||||
| Current assets - related party | 16 | 16 | ||||||
| Prepaid expenses and other current assets | 2,907 | 2,449 | ||||||
| Total current assets | 23,916 | 23,243 | ||||||
| Property and equipment - net | 5,055 | 5,317 | ||||||
| Operating lease right-of-use assets | 3,732 | 4,365 | ||||||
| Intangible assets - net | 21,497 | 25,074 | ||||||
| Goodwill | 19,186 | 19,186 | ||||||
| Other assets | 624 | 641 | ||||||
| TOTAL ASSETS | $ | 74,010 | $ | 77,826 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,448 | $ | 5,798 | ||||
| Accrued compensation | 2,824 | 3,444 | ||||||
| Accrued expenses | 6,619 | 5,065 | ||||||
| Operating lease liability (current portion) | 1,623 | 1,888 | ||||||
| Deferred revenue (current portion) | 1,224 | 1,380 | ||||||
| Notes payable (current portion) | 66 | 292 | ||||||
| Dividend payable | 5,438 | 5,433 | ||||||
| Total current liabilities | 23,242 | 23,300 | ||||||
| Notes payable | 33 | 37 | ||||||
| Borrowings under line of credit | 5,000 | 10,000 | ||||||
| Operating lease liability | 2,101 | 2,516 | ||||||
| Deferred revenue | 390 | 256 | ||||||
| Total liabilities | 30,766 | 36,109 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| SHAREHOLDERS' EQUITY: | ||||||||
| Preferred stock, | 6 | 6 | ||||||
| Common stock, | 17 | 17 | ||||||
| Additional paid-in capital | 120,840 | 120,706 | ||||||
| Accumulated deficit | (73,048 | ) | (74,481 | ) | ||||
| Accumulated other comprehensive loss | (3,909 | ) | (3,869 | ) | ||||
| Less: 740,799 common shares held in treasury, at cost at June 30, 2024 and December 31, 2023 | (662 | ) | (662 | ) | ||||
| Total shareholders' equity | 43,244 | 41,717 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 74,010 | $ | 77,826 | ||||
| CARECLOUD, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||||||||
| ($ in thousands, except share and per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| NET REVENUE | $ | 28,090 | $ | 29,362 | $ | 54,052 | $ | 59,363 | ||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Direct operating costs | 15,242 | 17,476 | 30,419 | 35,583 | ||||||||||||
| Selling and marketing | 1,664 | 2,580 | 3,434 | 5,192 | ||||||||||||
| General and administrative | 4,028 | 5,916 | 7,749 | 11,036 | ||||||||||||
| Research and development | 1,055 | 1,185 | 1,968 | 2,263 | ||||||||||||
| Depreciation and amortization | 3,714 | 3,341 | 7,644 | 6,379 | ||||||||||||
| Net loss on lease terminations, unoccupied lease charges and restructuring costs | 116 | 153 | 438 | 422 | ||||||||||||
| Total operating expenses | 25,819 | 30,651 | 51,652 | 60,875 | ||||||||||||
| OPERATING INCOME (LOSS) | 2,271 | (1,289 | ) | 2,400 | (1,512 | ) | ||||||||||
| OTHER: | ||||||||||||||||
| Interest income | 24 | 52 | 51 | 72 | ||||||||||||
| Interest expense | (288 | ) | (327 | ) | (653 | ) | (477 | ) | ||||||||
| Other expense - net | (294 | ) | (186 | ) | (287 | ) | (169 | ) | ||||||||
| INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | 1,713 | (1,750 | ) | 1,511 | (2,086 | ) | ||||||||||
| Income tax provision | 39 | 82 | 78 | 147 | ||||||||||||
| NET INCOME (LOSS) | $ | 1,674 | $ | (1,832 | ) | $ | 1,433 | $ | (2,233 | ) | ||||||
| Preferred stock dividend | 3,923 | 3,910 | 5,235 | 7,841 | ||||||||||||
| NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (2,249 | ) | $ | (5,742 | ) | $ | (3,802 | ) | $ | (10,074 | ) | ||||
| Net loss per common share: basic and diluted | $ | (0.14 | ) | $ | (0.37 | ) | $ | (0.24 | ) | $ | (0.65 | ) | ||||
| Weighted-average common shares used to compute basic and diluted loss per share | 16,132,420 | 15,615,760 | 16,073,364 | 15,518,965 | ||||||||||||
| CARECLOUD, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
| FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023 | ||||||||
| ($ in thousands) | ||||||||
| 2024 | 2023 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | 1,433 | $ | (2,233 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 7,818 | 6,663 | ||||||
| Lease amortization | 1,008 | 1,153 | ||||||
| Deferred revenue | (22 | ) | (116 | ) | ||||
| Provision for expected credit losses | 123 | 302 | ||||||
| Provision for deferred income taxes | - | 64 | ||||||
| Foreign exchange (gain) loss | (57 | ) | 176 | |||||
| Interest accretion | 321 | 325 | ||||||
| Stock-based compensation (benefit) expense | (443 | ) | 2,574 | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (1,314 | ) | 2,267 | |||||
| Contract asset | 294 | (435 | ) | |||||
| Inventory | (32 | ) | (21 | ) | ||||
| Other assets | (825 | ) | (318 | ) | ||||
| Accounts payable and other liabilities | 41 | (2,993 | ) | |||||
| Net cash provided by operating activities | 8,345 | 7,408 | ||||||
| INVESTING ACTIVITIES: | ||||||||
| Purchases of property and equipment | (425 | ) | (1,621 | ) | ||||
| Capitalized software and other intangible assets | (3,046 | ) | (4,456 | ) | ||||
| Net cash used in investing activities | (3,471 | ) | (6,077 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Preferred stock dividends paid | - | (7,780 | ) | |||||
| Settlement of tax withholding obligations on stock issued to employees | (184 | ) | (1,166 | ) | ||||
| Repayments of notes payable | (328 | ) | (316 | ) | ||||
| Proceeds from issuance of Series B Preferred Stock, net of expenses | - | 1,437 | ||||||
| Proceeds from line of credit | - | 12,700 | ||||||
| Repayment of line of credit | (5,000 | ) | (10,700 | ) | ||||
| Net cash used in financing activities | (5,512 | ) | (5,825 | ) | ||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | (76 | ) | (139 | ) | ||||
| NET DECREASE IN CASH | (714 | ) | (4,633 | ) | ||||
| CASH - Beginning of the period | 3,331 | 12,299 | ||||||
| CASH - End of the period | $ | 2,617 | $ | 7,666 | ||||
| SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Dividends declared, not paid | $ | 5 | $ | 4,120 | ||||
| Purchase of prepaid insurance with assumption of note | $ | 96 | $ | - | ||||
| Reclass of deposits for property and equipment placed in service | $ | 296 | $ | - | ||||
| SUPPLEMENTAL INFORMATION - Cash paid during the period for: | ||||||||
| Income taxes | $ | 122 | $ | 111 | ||||
| Interest | $ | 527 | $ | 341 | ||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO COMPARABLE GAAP MEASURES (UNAUDITED)
The following is a reconciliation of the non-GAAP financial measures used by us to describe our financial results determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”). An explanation of these measures is also included below under the heading “Explanation of Non-GAAP Financial Measures.”
While management believes that these non-GAAP financial measures provide useful supplemental information to investors regarding the underlying performance of our business operations, investors are reminded to consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies, and management may utilize other measures to illustrate performance in the future. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP.
Adjusted EBITDA to GAAP Net Income (Loss)
Set forth below is a reconciliation of our “adjusted EBITDA” to our GAAP net income (loss).
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| ($ in thousands) | ||||||||||||||||
| Net revenue | $ | 28,090 | $ | 29,362 | $ | 54,052 | $ | 59,363 | ||||||||
| GAAP net income (loss) | 1,674 | (1,832 | ) | 1,433 | (2,233 | ) | ||||||||||
| Provision for income taxes | 39 | 82 | 78 | 147 | ||||||||||||
| Net interest expense | 264 | 275 | 602 | 405 | ||||||||||||
| Foreign exchange loss / other expense | 306 | 191 | 301 | 183 | ||||||||||||
| Stock-based compensation expense (benefit), net of restructuring costs | 265 | 1,502 | (443 | ) | 2,574 | |||||||||||
| Depreciation and amortization | 3,714 | 3,341 | 7,644 | 6,379 | ||||||||||||
| Transaction and integration costs | 11 | 107 | 23 | 179 | ||||||||||||
| Net loss on lease terminations, unoccupied lease charges and restructuring costs | 116 | 153 | 438 | 422 | ||||||||||||
| Adjusted EBITDA | $ | 6,389 | $ | 3,819 | $ | 10,076 | $ | 8,056 | ||||||||
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 June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| ($ in thousands) | ||||||||||||||||
| Net revenue | $ | 28,090 | $ | 29,362 | $ | 54,052 | $ | 59,363 | ||||||||
| GAAP net income (loss) | 1,674 | (1,832 | ) | 1,433 | (2,233 | ) | ||||||||||
| Provision for income taxes | 39 | 82 | 78 | 147 | ||||||||||||
| Net interest expense | 264 | 275 | 602 | 405 | ||||||||||||
| Other expense - net | 294 | 186 | 287 | 169 | ||||||||||||
| GAAP operating income (loss) | 2,271 | (1,289 | ) | 2,400 | (1,512 | ) | ||||||||||
| GAAP operating margin | 8.1 | % | (4.4 | %) | 4.4 | % | (2.5 | %) | ||||||||
| Stock-based compensation expense (benefit), net of restructuring costs | 265 | 1,502 | (443 | ) | 2,574 | |||||||||||
| Amortization of purchased intangible assets | 586 | 1,251 | 1,426 | 2,574 | ||||||||||||
| Transaction and integration costs | 11 | 107 | 23 | 179 | ||||||||||||
| Net loss on lease terminations, unoccupied lease charges and restructuring costs | 116 | 153 | 438 | 422 | ||||||||||||
| Non-GAAP adjusted operating income | $ | 3,249 | $ | 1,724 | $ | 3,844 | $ | 4,237 | ||||||||
| Non-GAAP adjusted operating margin | 11.6 | % | 5.9 | % | 7.1 | % | 7.1 | % | ||||||||
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 June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| ($ in thousands) | ||||||||||||||||
| GAAP net income (loss) | $ | 1,674 | $ | (1,832 | ) | $ | 1,433 | $ | (2,233 | ) | ||||||
| Foreign exchange loss / other expense | 306 | 191 | 301 | 183 | ||||||||||||
| Stock-based compensation expense (benefit), net of restructuring costs | 265 | 1,502 | (443 | ) | 2,574 | |||||||||||
| Amortization of purchased intangible assets | 586 | 1,251 | 1,426 | 2,574 | ||||||||||||
| Transaction and integration costs | 11 | 107 | 23 | 179 | ||||||||||||
| Net loss on lease terminations, unoccupied lease charges and restructuring costs | 116 | 153 | 438 | 422 | ||||||||||||
| Income tax provision related to goodwill | - | 38 | - | 64 | ||||||||||||
| Non-GAAP adjusted net income | $ | 2,958 | $ | 1,410 | $ | 3,178 | $ | 3,763 | ||||||||
| End-of-period shares | 16,145,187 | 15,628,097 | 16,145,187 | 15,628,097 | ||||||||||||
| Non-GAAP adjusted net income per share | $ | 0.18 | $ | 0.09 | $ | 0.20 | $ | 0.24 | ||||||||
For purposes of determining non-GAAP adjusted net income per share, we used the number of common shares outstanding as of June 30, 2024 and 2023.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| GAAP net loss attributable to common shareholders, per share | $ | (0.14 | ) | $ | (0.37 | ) | $ | (0.24 | ) | $ | (0.65 | ) | ||||
| Impact of preferred stock dividend | 0.24 | 0.25 | 0.33 | 0.51 | ||||||||||||
| Net income (loss) per end-of-period share | 0.10 | (0.12 | ) | 0.09 | (0.14 | ) | ||||||||||
| Foreign exchange loss / other expense | 0.02 | 0.01 | 0.02 | 0.01 | ||||||||||||
| Stock-based compensation expense (benefit), net of restructuring costs | 0.01 | 0.10 | (0.03 | ) | 0.16 | |||||||||||
| Amortization of purchased intangible assets | 0.04 | 0.08 | 0.09 | 0.16 | ||||||||||||
| Transaction and integration costs | 0.00 | 0.01 | 0.00 | 0.01 | ||||||||||||
| Net loss on lease terminations, unoccupied lease charges and restructuring costs | 0.01 | 0.01 | 0.03 | 0.03 | ||||||||||||
| Income tax provision related to goodwill | - | 0.00 | - | 0.01 | ||||||||||||
| Non-GAAP adjusted earnings per share | $ | 0.18 | $ | 0.09 | $ | 0.20 | $ | 0.24 | ||||||||
| End-of-period common shares | 16,145,187 | 15,628,097 | 16,145,187 | 15,628,097 | ||||||||||||
| In-the-money warrants and outstanding unvested RSUs | 198,212 | 605,689 | 198,212 | 605,689 | ||||||||||||
| Total fully diluted shares | 16,343,399 | 16,233,786 | 16,343,399 | 16,233,786 | ||||||||||||
| Non-GAAP adjusted diluted earnings per share | $ | 0.18 | $ | 0.09 | $ | 0.19 | $ | 0.23 | ||||||||
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.
| Six Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| ($ in thousands) | ||||||||
| Net cash provided by operating activities | $ | 8,345 | $ | 7,408 | ||||
| Purchases of property and equipment | (425 | ) | (1,621 | ) | ||||
| Capitalized software and other intangible assets | (3,046 | ) | (4,456 | ) | ||||
| Free cash flow | $ | 4,874 | $ | 1,331 | ||||
| Net cash used in investing activities 1 | $ | (3,471 | ) | $ | (6,077 | ) | ||
| Net cash used in financing activities | $ | (5,512 | ) | $ | (5,825 | ) | ||
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, including the shares which were issued but are subject to forfeiture and considered contingent consideration.
Management considers all of these non-GAAP financial measures to be important indicators of our operational strength and performance of our business and a good measure of our historical operating trends, in particular the extent to which ongoing operations impact our overall financial performance.
In addition to items routinely excluded from non-GAAP EBITDA, management excludes or adjusts each of the items identified below from the applicable non-GAAP financial measure referenced above for the reasons set forth with respect to that excluded item:
Foreign exchange loss / other expense. Other expense is excluded because foreign currency gains and losses and other non-operating expenses are expenditures that management does not consider part of ongoing operating results when assessing the performance of our business, and also because the total amount of the expense is partially outside of our control. Foreign currency gains and losses are based on global market factors which are unrelated to our performance during the period in which the gains and losses are recorded.
Stock-based compensation expense (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.
Net loss on 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.
FAQ
What was CareCloud's (CCLD) net income for Q2 2024?
How much did CareCloud's (CCLD) Adjusted EBITDA increase in Q2 2024?
What was CareCloud's (CCLD) revenue for Q2 2024?
How much has CareCloud (CCLD) reduced its credit facility balance?
