CareCloud — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 2026 revenue reached $33.7 million, a 9% year-over-year increase from $31.1 million in Q3 2025.
• Year-to-date 2026 revenue totaled $96.9 million, up 13% from $86.1 million in the same period last year.
• Q3 2026 GAAP net income was $4.7 million, a 54% increase from $3.1 million in Q3 2025.
• Q3 2026 GAAP EPS was $0.10, a 150% increase from $0.04 in Q3 2025.
• Q3 2026 net income attributable to common shareholders was $4.2 million, a 147% increase from $1.7 million in Q3 2025.
• Q3 2026 adjusted EBITDA was $9.9 million, a 28% increase from $7.7 million in Q3 2025, representing a 29% margin.
• Year-to-date 2026 GAAP net income was $6.8 million, down from $7.9 million in the same period last year.
• Year-to-date 2026 GAAP EPS was $0.09, up from $0.07 in the same period last year.
• Year-to-date 2026 adjusted EBITDA was $21.2 million, up from $19.9 million in the same period last year.
• Q3 2026 operating margin rose to 50.5% (revenue less direct operating costs) from 47.8% in the prior year period.
• Q3 2026 GAAP operating income was $6.6 million, compared to $3.2 million in Q3 2025.
• Q3 2026 net cash provided by operating activities was $5.6 million, compared to $7.4 million in Q3 2025.
• Year-to-date 2026 free cash flow was $11.9 million, down from $14.7 million in the same period last year.
• Cash and restricted cash ended Q3 2026 at $4.6 million, up from $3.1 million at the end of 2025.
• Deferred revenue was $4.9 million ($3.9 million current, $1.0 million non-current) as of September 30, 2026, compared to $5.0 million ($4.1 million current, $0.8 million non-current) as of December 31, 2025.

Guidance and Future Outlook:

• The Company reaffirmed full-year 2026 guidance:
  • Revenue: $128 million to $132 million.
  • Adjusted EBITDA: $29 million to $31 million.
  • GAAP EPS: $0.20 to $0.23.
• Full-year 2026 GAAP EPS guidance represents a 100-130% increase from the $0.10 achieved in full-year 2025.
• Full-year 2026 adjusted EBITDA guidance represents 5-13% growth over 2025 actuals of $27.5 million.
• Management expects guidance to be driven by contributions from existing clients, cross-selling, and organic/inorganic growth.
• The Company plans to launch a SaaS compliance offering in late Q4 2026.
• Future growth is contingent on continued performance of existing and new customers.

Business Segments and Product Lines:

• AI integration into claims processing reduced manual claim touches by 44% in the division serving the majority of RCM clients over the past three months.
• The company recognized its first revenue from AI-enabled workflows for enterprise clients during the quarter.
• Empower, acquired in May 2026, reversed more than $1 million in alleged payer overpayments for a client and facilitated new RCM signings with an MSO and a wound care practice.
• Mitchell Brie, founder of Empower, was appointed Chief Compliance Officer to scale compliance services across more than 40,000 providers.
• The company serves more than 40,000 providers with revenue cycle management (RCM), practice management (PM), electronic health records (EHR), business intelligence, patient experience management (PXM), and digital health solutions.

Market and Competitive Landscape:

• The Company operates as a leader in AI-powered healthcare technology and revenue cycle management solutions for medical practices and health systems nationwide.
• The shift toward higher-margin offerings and a more efficient core business contributed to improved operating margins.
• The Company aims to convert AI and automation capabilities into cross-sell revenue across its client base.

Risks and Challenges:

• Achievement of guidance is contingent on the continued performance of existing and new customers.
• An impairment to the relationship with one or more customers could have a material adverse effect on performance.
• Forward-looking statements involve risks including the ability to manage growth, migrate acquired customers, retain customers, maintain cost-effective global operations, and adapt to changing industry regulations and reimbursement trends.
• Risks also include the ability to develop new technologies, upgrade legacy systems, and keep information systems secure.

Management Commentary and Tone:

• Stephen Snyder, CEO, stated the third quarter was the most profitable in the company's history, noting that Q3 GAAP EPS matched the full-year 2025 EPS.
• Snyder highlighted ten consecutive quarters of positive GAAP net income and the strategy of using earnings to pay down debt while investing in AI and compliance platforms.
• A. Hadi Chaudhry, Chief Strategy Officer, noted that AI and automation allowed teams to handle more volume without adding headcount, powering the record adjusted EBITDA.
• Bonnie Boyer, CFO, emphasized that record earnings and a simpler capital structure are working together for common shareholders, with net income attributable to common shareholders more than doubling year-over-year.
• The tone is confident, citing record profitability and a focus on converting operational efficiencies into cross-sell revenue.

Other Key Points:

• The Company reduced debt by $7.4 million, including a $0.8 million prepayment.
• On May 15, 2026, CareCloud redeemed all Series B Preferred Stock for $41.6 million using proceeds from its credit facility, replacing perpetual preferred stock with lower-cost debt that amortizes monthly.
• As of November 2, the term loan stood at $34.2 million, and the $9 million borrowed on the line of credit was repaid.
• The Company intends to make additional prepayments on the term loan as cash flow permits.
• Q3 2026 was the 10th consecutive quarter of positive GAAP net income.
• The Company hosted a conference call on November 5, 2026, to discuss results and strategy.