Q4 2023 CareCloud Inc Earnings Call
Speaker Change: [music].
Unknown Attendee: As reflected in our 2024 top line guidance, we anticipate our wellness segment to be a key driver of growth for the year ahead. Despite this business failing short of expectations in 2023, we concluded the year with strong momentum, which we expect will carry over into 2024 and further accelerate in 2025. There continues to be a strong uptake among providers and an increasing amount of interest from patients as healthcare undergoes a paradigm shift towards preventive medicine and value-based care. During the fourth quarter, patient engagement more than doubled from the first quarter, 2023.
Good morning, My name is joelle and I will be your conference operator today.
Operator: Good morning. My name is Joelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the CareCloud fourth quarter 2023 results conference call. All lines have been placed on mute to prevent any background noise.
Joelle: At this time I would like to welcome everyone to the care club fourth quarter 2023 result conference call.
Joelle: All lines have been placed on mute to prevent any background noise.
Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star followed by the number zero. Thank you. I would now like to turn the conference over to Chantal Melendez, Corporate Counsel. Please go ahead.
Joelle: After the Speakers' remarks, there will be a question and answer session.
Joelle: If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad. If he would like to withdraw your question. Please press star followed by the Q.
Joelle: I would now like to turn the conference over to Shoretel Melendez Corporate Counsel. Please go ahead.
Chantal Melendez: Good morning, everyone. Welcome to CareCloud's fourth quarter and full year 2023 conference call. On today's call are Mahmud Haq, our Founder and Executive Chairman, Hadi Chaudhry, our Chief Executive Officer, President, and Director, and Norman Roth, our Interim Chief Financial Officer. Before we begin, I would like to remind you that certain statements made during this conference call are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. All statements other than statements of historical fact made during this conference are forward-looking statements, including, without limitation, statements regarding our expectations and guidance for future financial and operational performance, expected growth, business outlook, and potential organic growth and acquisition. Forward-looking statements may sometimes be identified with words such as will, may, expect, plan, anticipate, upcoming, believe, estimate, or similar terminology and the negative of these terms.
Unknown Attendee: Good morning, everyone welcome to Coeur called fourth quarter and full year 2023 conference call on today's call are Mahmud Haq, our founder and Executive Chairman Party Chaudhry, Our Chief Executive Officer, President and the director and Norman Rock, our interim Chief Financial Officer before we begin I would like to remind you that certain statements made during the conference call.
Unknown Attendee: Forward looking statements within the meaning of section 27 of the Securities Act of 1933 other men and.
Unknown Attendee: In section 21 E of the Securities Exchange Act of 1934 as amended all statements other than statements of historical fact made during this conference are forward looking statements, including without limitation statements regarding our expectations and guidance for future financial and operational performance expected growth business outlook and potential organic growth in <unk>.
Unknown Attendee: Regarding the industry-wide impact caused by a cybersecurity breach and changes in health care, the benefit of our diversified clearinghouse partners and swift action of our team members has resulted in minimal exposure to CareCloud and our clients. Our actions taken not only ensured that virtually all claims submitted were cleared, but also that payment was remitted to our customers. The resulting liquidity benefit has been critical to our customers and further demonstrates our competitive differentiation in the marketplace. Expanding further on our diversification across our clearinghouse partners, most of CareCloud's government payer-related claims volumes were unaffected as they are directly submitted to the payers and flow through our proprietary clearinghouse. The rest of our claims volume was diversified between Change Healthcare, our proprietary linkage, and other clearinghouses. Those impacted by the breach are being rerouted expeditiously to other industry players.
Unknown Attendee: Tradition.
Unknown Attendee: Forward looking statements may sometimes be identified with words, such as the Bill May expect plan anticipate upcoming believe estimate or similar terminology and the negative of these terms.
Chantal Melendez: Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. These statements reflect our opinions only as of the date of this presentation, and we undertake no obligation to revise these forward-looking statements in light of new information or future events. Please refer to our press release and our reports filed with the Securities and Exchange Commission, where you will find a more comprehensive discussion of our performance and factors that could cause actual results to differ materially from these forward-looking statements. For anyone who dialed into the call by telephone, you may want to download our fourth quarter and full year 2023 earnings presentation. Please visit our investor relations site, ir.carecloud.com, click on news and events, then click IR calendar. Click on full year 2023 results conference call to download the earnings presentation. Finally, on today's call, we may refer to certain non-GAAP financial measures.
Unknown Attendee: Forward looking statements are not promises or guarantees of future performance are subject to a variety of risks and uncertainties many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward looking statements.
Unknown Attendee: These statements reflect our opinions only as to the date of this presentation and we undertake no obligation to revise these forward looking statements in light of new information or future events.
Unknown Attendee: Please refer to our press release and our reports filed with the Securities and Exchange Commission, where you will find a more comprehensive discussion of our performance and factors that could cause actual results to differ materially from these forward looking statements for anyone who dialed into the call by telephone you may want to download our fourth quarter and full year 2023 earnings presentation. Please.
Unknown Attendee: Visit our Investor Relations site, IR Dot care club Dot com click on news and events then quick IR calendar pick on full year 2023 results conference call and download the earnings presentation. Finally on today's call. We may refer to certain non-GAAP financial measures. Please refer to today's press release announcing our fourth quarter and full.
Unknown Attendee: Please refer to today's press release announcing our fourth quarter and full year 2023 results for reconciliation of these non-GAAP performance measures to our GAAP financial results. With that said, I'll now turn the call over to our CEO, Adi Chaudhary. Adi? Thank you, Shanta.
Speaker Change: All year 2023 results for a reconciliation of these non-GAAP performance measures to our GAAP financial results with that said I'll now turn the call over to our CEO Party chassis body.
Unknown Attendee: The minimal exposure year to CareCloud that we do anticipate is timing-related but overall net-neutral on a revenue basis. Payments from some customers related to process claims will likely be recognized later than anticipated. There could also be some disruption to secondary actions, such as collections on patients' coinsurance. However, the overall impact on the business would be de minimis. I will now turn it over to Norman Roth. Norman will be serving as CareCloud's interim CFO while we search for a full-time CFO.
Speaker Change: Thank you Sandra.
Unknown Attendee: And thanks to all of you for joining our fourth quarter and full year earnings call. I have several important updates to share from the Quadrant for CareCloud's path forward. During 2023, we intensified our focus on operational efficiencies with the goal of improving profitability and free cash flow. While challenges to revenue persisted in 2023, we have been aligning our costs with our revenue goals and focusing on the highest return opportunities. This transitional period is expected to continue through 2024.
Speaker Change: And thanks to all of you for joining of the fourth quarter and full year earnings call.
I have several important updates to share from the core crane for care cloud path forward.
During 2023, we intensified our focus on operational efficiencies with the goal of improving profitability and free cash flow.
Speaker Change: The challenges to revenue persisted in 2023, we had been aligning our costs with our revenue goals and focusing on the highest return opportunities.
Speaker Change: Transitional period is expected to continue through 2024.
Speaker Change: Our primary objective remains centered on profitability and free cash flow underpinned by an organization wide commitment to operating leverage and improving their competitive position.
Unknown Attendee: Our primary objective remains centered on profitability and free cash flow underpinned by an organization-wide commitment to operating leverage and improving our competitive position. We expect modest top-line growth as we lay the foundation for sustainable long-term expansion and pave a pathway to a more normalized growth rate in 2025. We remain confident in our mission of empowering physicians to deliver exceptional patient care through our cloud-based technology while delivering returns for our shareholders. Our proprietary end-to-end platform is fully integrated and designed with the flexibility to be adapted across markets and to meet the needs of our physician partners, and as the complexity of health care administration evolves, we are seeing rising demand for our tech-enabled RCM, digital health, and generative AI solutions. We remain prepared to deliver scalable outcomes with a global workforce and over 20 years of experience. Turning to our results for the full year, our revenue of $117 million and adjusted EBITDA of $15 million were in line with our expectations.
Speaker Change: We expect modest top line growth as we laid the foundation for sustainable long term expansion and paves a pathway to a more normalized growth rate in 2025.
Norman S. Roth: Norman has been with CareCloud for 10 years as corporate controller, and his technical know-how has been invaluable to the company. His leadership will be instrumental in navigating CareCloud through this transitional period. [inaudible] Thank you, Heidi.
Speaker Change: We remain confident in our mission of empowering physicians, who deliver exceptional patient care global cloud based technology, while delivering returns for our shareholders.
Speaker Change: Our proprietary end to end platform is fully integrated and designed with the flexibility to be adapted across markets and to meet the needs of our physician partners.
Norman S. Roth: I'm excited in my role as the interim CFO of CareCloud, which started in January of this year. As we navigate through this year of transition, my focus is on enhancing our financial discipline and pulling the appropriate levers to increase our operating leverage within the business. On October 2, 2023, the company announced that it was committed to effectively aligning its resources with business priorities and to improving profitability. Cost reduction measures were implemented during the fourth quarter of 2023 to optimize efficiency, streamline operations, and enhance financial performance. Once these Quest initiatives are complete, we expect to achieve approximately $18 million in annualized Quest savings, of which approximately $13 million will be realized in 2024. In December 2023, we suspended the preferred stock dividend, resulting in cash savings of $1.3 million per month. This was a difficult decision, but one that we consider necessary.
Speaker Change: And the complexity in healthcare administrative labels.
Speaker Change: We are seeing rising demand for overtake the neighborhood RCM digital health and generative AI solutions, we remain prepared to deliver scalable outcomes to our global workforce and over 20 years of experience.
Speaker Change: Turning to our results for the full year of the revenue of $117 million and adjusted EBITDA of $15 million were in line with our expectations.
Speaker Change: As to the year ahead, our primary objective during 2024 is to substantially increase positive free cash flow, reducing the balance on our credit line, while pursuing the resumption of our preferred dividends.
Unknown Attendee: As to the year ahead, our primary objective for 2024 is to substantially increase positive free cash flow, reducing the balance on our credit line while pursuing the resumption of our preferred dividends. This goal will be achieved through a combination of top-line growth and a concerted effort to optimize our cost structure by leveraging the strengths of our global workforce and implementing vendor cost optimization measures. During the fourth quarter of 2023, we developed and began executing a strategic plan aimed at enhancing liquidity within our operations by streamlining payroll and operating expenses. Once the reductions are fully implemented this year, we anticipate an improvement of approximately $18 million in annualized free cash flow, of which approximately $13 million will be realized in 2024.
Speaker Change: This goal will be achieved through a combination of topline growth and a concerted effort to optimize our cost structure by leveraging the strengths of our global workforce and implementing vendor cost optimization measures.
Speaker Change: During the fourth quarter of 2023, we developed and began executing a strategic plan aimed at enhancing liquidity within our operations by streamlining payroll and operating expenses.
Speaker Change: Once our reductions are fully implemented this year, we anticipate an improvement of approximately $18 million in annualized free cash flow of which approximately $13 million will be realized in 2024.
Speaker Change: Moreover, ongoing efforts to optimize the cost structure will continue throughout the year underscoring our commitment to increasing profitability and generating positive cash flow that exceeds our monthly dividends.
Norman S. Roth: Again, our goal this year is to reduce costs, return the company to profitability, and generate positive free cash flow. Once sufficient cash flow is generated, our initial goal is to reduce the borrowings on the line of credit. Once our monthly free cash flow exceeds the dividend requirement for a few months, management will recommend to the company's board of directors to reinstate the preferred stock dividend. The gap net loss for 2023 includes a $42 million goodwill impairment charge, which is a non-cash charge.
Speaker Change: Our suite of products continues to evolve and scale cloud phase ahead of the curve and innovative cutting edge solutions.
Unknown Attendee: Moreover, ongoing efforts to optimize our cost structure will continue throughout the year, underscoring our commitment to increasing profitability and generating positive cash flow that exceeds our monthly dividend. Our suite of products continues to evolve as CareCloud stays ahead of the curve in innovating cutting-edge solutions. We recently announced the latest addition to our Cirrus AI suite called Cirrus AI Notes, which can run ambiently during patients' visits, identifying and summarizing key parts of the visits and formatting them in a clinical note for the doctor's review. Once accepted, the note is securely saved in the patient's chart within the EHR.
Speaker Change: Recently announced the latest addition to oversee this AI suite, Florida, Tennessee High notes.
Speaker Change: Which can do on M Bentley during patient visits.
Speaker Change: Didn't define and summarizing key parts of the visits and for meeting them in their clinical note what the doctors review once.
Speaker Change: Once accepted the notice securely saved in the patient chart, but in the EHR.
Speaker Change: We are at the forefront of driving these innovative AI solutions forward and we expect revenue that comes from distorting to be incremental to overall margin profile.
Speaker Change: As these product support the generation of revenue we can further improve over models by leveraging proprietary data collected over 20 years across the spectrum of small medium sized and large health systems.
Norman S. Roth: As a result of suspending the preferred stock dividend, there was a decrease in the company's market capitalization, which caused what is known as a triggering event, requiring the. The goodwill balance on our balance sheet has now been reduced by $42 million from the prior year. In the fourth quarter of 2023, we reported revenue of $28 million, a gap net loss of $44 million, and an adjusted EBITDA for the fourth quarter of $4 million, representing an adjusted EBITDA margin of 14%. The gap net loss that I just referred to includes the Goodwill impairment charge that I mentioned above. Additionally, our adjusted net income was $835,000, or five cents per share.
Unknown Attendee: We are at the forefront of driving these innovative AI solutions forward, and we expect revenue that comes from these products to be incremental to our margin profile. As these products support the generation of revenue, we can further improve our models by leveraging proprietary data collected over 20 years across the spectrum of small, medium-sized, and large health systems. These AI solutions will improve our competitive position in the market, ultimately helping us to improve our profit margin.
Speaker Change: AI solutions will improve our competitive position in the market ultimately, helping us to improve their profit margins.
Speaker Change: As reflected in our 2020 for topline guidance, we anticipate our wellness segment to be key driver of the growth for the year ahead. Despite this business failing short of expectations. In 2023, we concluded the year with strong momentum, which we expect will carryover into 2024.
Speaker Change: And further accelerate in 2025.
Unknown Attendee: As reflected in our 2024 top line guidance, we anticipate our wellness segment to be a key driver of growth for the year ahead. Despite this business failing short of expectations in 2023, we concluded the year with strong momentum, which we expect will carry over into 2024 and further accelerate in 2025. There continues to be a strong uptake among providers and an increasing amount of interest from patients as healthcare undergoes a paradigm shift towards preventive medicine and value-based care. During the fourth quarter, patient engagement more than doubled from the first quarter, 2023.
Speaker Change: There continues to be a strong uptake among providers and an increasing amount of interest from patients as health care undergoes a paradigm shift towards preventive medicine and value based care.
During the fourth quarter patient engagements more than doubled from the first quarter 2023.
Speaker Change: Regarding the industry wide impact caused by a cyber security breach in change healthcare the benefit of our diversified clearinghouse partners and Swift action muscle of our team members has resulted in minimal exposure to key cloud a number of clients.
Norman S. Roth: For the full year, we recorded revenue of $117 million, which was in line with our guidance, a gap net loss of $49 million, and adjusted EBITDA of $15 million, representing a 13% adjusted EBITDA margin. We also reported an adjusted net income of $4.8 million, or $0.30 per share. Turning to the balance sheet, we ended the year with $3.3 million. We generated $15 million in cash flow from operations for the full year 2023, $3.7 million of which was from the fourth quarter.
Speaker Change: Our actions taken not only ensure that virtually all claims submitted were cleared but also debt payments was limited to our customers.
Speaker Change: The resulting liquidity benefit has been critical to our customers and further demonstrates our competitive differentiation in the marketplace.
Unknown Attendee: Regarding the industry-wide impact caused by a cybersecurity breach and changing healthcare, the benefit of our diversified clearinghouse partners and swift action of our team members has resulted in minimal exposure to CareCloud and our clients. Our actions taken not only ensured that virtually all claims submitted were cleared, but also that payments were remitted to our customers. The resulting liquidity benefit has been critical to our customers and further demonstrates our competitive differentiation in the marketplace. Expanding further on our diversification across our clearinghouse partners, most of CareCloud's government payer-related claims volumes were unaffected as they are directly submitted to the payers and flow through our proprietary clearinghouse. The rest of our claims volume was diversified between Change Healthcare, our proprietary linkage, and other clearinghouses. Those impacted by the breach are being rerouted expeditiously to other industry players.
Speaker Change: Expanding further on our diversification across the clearinghouse partners most of your cloud to government payer related claims volumes, what unaffected as they are directly submitted to the peers and flow through of a proprietary clearinghouse.
Speaker Change: The rest of our claims volume, we're diversified between change healthcare public proprietary linkage and other clearinghouses those impacted by the breach or being rerouted expeditiously to other industry players.
Speaker Change: The minimal explore year two carrier cloud that we do anticipate is timing related but overall net neutral on a revenue basis.
Norman S. Roth: We are focused on growing free cash flow with the goal of reinstating the preferred stock payment. For 2024, we expect revenue to be between $118 million and $120 million and adjusted EBITDA to be between $21 million and $23 million. Our top-line guidance contemplates organic growth, including expansion of the wellness segment, which will partially offset the lost revenue associated with the loss of two customers from a prior acquisition. As previously mentioned, in 2023, our revenue from technology-enabled business solutions was adversely affected by two significant accounts. These accounts were in the process of winding down at the time of our acquisition in 2020 and represented revenue of $3.1 million in 2023.
Speaker Change: Payments from some customers related process claims will likely be recognized later than anticipated.
Speaker Change: It could also be some disruption to the second reactions such as collections on patients co insurance. However, the overall impact to the business would be de Minimis.
Speaker Change: I will now turn it over to Norman brought.
Norman Rock: Don will be serving as care clouds interim CFO, while we search for a full <unk>.
Unknown Attendee: The minimal exposure year to CareCloud that we do anticipate is timing-related, but overall net-neutral on a revenue basis. Payments from some customers for process claims will likely be recognized later than anticipated. There could also be some disruption to secondary actions, such as collections on patients' coinsurance. However, the overall impact to the business would be de minimis. I will now turn it over to Norman Roth.
Norman Rock: <unk> CFO.
Norman Rock: <unk> has been with carrier cloud for 10 years as corporate controller and his technical Knowhow has been invaluable to the company.
Norman Rock: His leadership will be instrumental in navigating the company through this transitional period.
Norman Rock: No.
Don: Thank you Heidi I'm excited in my role as the interim CFO of care cloud, which started in January of this year.
Heidi: As we navigate through this year of transition my focus is on enhancing our financial discipline and pulling the appropriate levers to increase our operating leverage within the business.
Norman Roth: Norman will be serving as CareCloud's interim CFO while we search for a full-time CFO. Norman has been with CareCloud for 10 years as corporate controller, and his technical know-how has been invaluable to the company. His leadership will be instrumental in navigating the company through this transitional period. [inaudible] Thank you, Heidi.
Heidi: On October 2nd 2023.
Heidi: Company announced that it was committed to effectively aligning resources with business priorities and to improving profitability.
Heidi: Cost reduction measures were implemented during the fourth quarter of 2023 to optimize efficiency streamline operations and enhance financial performance.
Heidi: Once these question initiatives are complete we expect to achieve approximately $18 million in annualized cost savings.
Norman S. Roth: As we deliver on our strategic initiatives, we expect to offset this loss in 2024. We expect the combination of operational efficiencies and returns from our investments to drive adjusted EBITDA. From a seasonal standpoint, Q1 will include the normal revenue decline the industry typically sees due to the impact of patient deductibles.
Heidi: Of which approximately $13 million will be realized in 2024 <unk>.
Heidi: In December 2023, we suspended the preferred stock dividend, resulting in cash savings of $1 $3 million per month.
Heidi: This was a difficult decision, but one that we considered necessary again our goal. This year is to reduce cost and return the company to profitability and generate positive free cash flow.
Mahmud U. Haq: And as always, since we are processing the same level of claims, this does not reduce our cost. We do not expect an impact from the events affecting changed health care but do anticipate that a small portion of what would otherwise be Q1 revenue will be recognized in Q2. Our guidance collectively reflects a mix of challenges and opportunities that ultimately puts us in a stronger position to grow sustainably. With that, I'll now turn the call over to Mahmud for his closing remarks. Mahmud
Heidi: Once sufficient cash flow is generated our initial goal is to reduce the borrowings on our line of credit.
Heidi: One store monthly free cash flow exceeds the dividend requirement for a few months management will recommend to the company's board of directors to reinstate the preferred stock dividend.
Heidi: The GAAP net loss for 2023 includes a $42 million goodwill impairment charge.
Heidi: Which is a noncash charge.
Heidi: As a result of suspending the preferred stock dividend. It was a decrease in the company's market capitalization, which caused what is known as a triggering event.
Heidi: Requiring.
Heidi: The company to review the carrying value of its goodwill balance.
Heidi: The goodwill balance on our balance sheet has now been reduced by $42 million from the prior year.
Operator: Thank you, Norm. As discussed, our entire team is focused on increasing profitability and free cash flow while supporting our sustainable growth. I would like to thank our employees, customers, and shareholders for their continued support. Operator, please open the floor to questions. Thank you, ladies and gentlemen. We will now begin the question and answer session for industry analysts who cover CareCloud. Should you have a question, please press star followed by the one on your touchtone. You are here at a three-tone prompt acknowledging your request, and your questions will be answered in the order they are received. Should you wish to decline from the polling process, please press star followed by the. If you are using a speaker phone, please lift the handset before pressing any key.
In the fourth quarter of 2023, we reported revenue of $28 million of GAAP net loss of $44 million.
Heidi: And then in adjusted EBITDA for the fourth quarter of $4 million, representing an adjusted EBITDA margin of 14%.
Heidi: GAAP net loss that I just referred to includes the goodwill impairment charge that I mentioned above. Additionally, our adjusted net income was $835000 or <unk> <unk> per share.
Heidi: For the full year, we recorded revenue of $117 million, which was in line with our guidance, our GAAP net loss of $49 million and adjusted EBITDA of $15 million, representing a 13% adjusted EBITDA margin. We also reported an adjusted net income of $4 eight.
Million.
Or <unk> 30 per share.
Heidi: Turning to the balance sheet, we ended the year with $3 $3 million of cash we generated $15 million in cash flow from operations for the full year 2023, $3 $7 million of which was from the fourth quarter.
Operator: Please limit yourself to two questions and then rejoin the queue if you have any other questions. Your first question comes from Allen Klee with Maxim Group. Please go ahead.
Heidi: We are focused on growing free cash flow with the goal of reinstating the preferred stock payment.
Heidi: For 2024, we expect revenue to be between $118 million and $120 million.
Allen Robert Klee: Hello, Hi. I just wanted to go over your guidance for 24 and where you have the revenue increasing. Could you go into that a little more? And what's your assumption for MED-SR? Um, just in general, it has been somewhat challenged, so, just kind of give us how you think about how conservative the guidance is and what could cause it to end up lower than that. Thank you. It's a good morning, Alan.
<unk> EBITDA to be between $21 million and $23 million.
Heidi: Our topline guidance contemplates organic growth, including expansion of the wellness segment, which will partially offset the lost revenue.
Heidi: <unk> with the loss of two customers from a prior acquisition.
Heidi: As previously mentioned in 2023, our revenue from technology enabled business solutions was adversely affected by two significant accounts.
Heidi: These accounts were in the process of winding down at the time of our acquisition in 2020 and represented revenue of $3 $1 million in 2023.
Unknown Attendee: And then thank you for thanking me for the question. So I think first of all, before getting too specifically towards your answer, I'm just going to try to reiterate the fact that, if you think about 2024, we are strategically directing our focus towards enhancing our bottom line profitability. Well, we do maintain a balanced approach that recognizes the significance of top line growth at the same time. However, as that remains the key priority for us, we believe that sharpening our focus on profitability is essential for long-term sustainability and value creation for our shareholders. So that's why if you look at it in our guidance, where EBITDA guidance is, you can see a significant increase over the last year since we are trying to focus on liquidity and profitability.
Heidi: As we deliver on our strategic initiatives, we expect to offset this loss from 2024.
Heidi: We expect the combination of operational efficiencies.
Heidi: Returns from our investments to drive adjusted EBITDA.
Heidi: From a seasonal standpoint Q1.
Heidi: We'll include the normal revenue decline the industry typically sees due to the impact of patient deductibles.
Heidi: And as always since we are processing the same level of cat claims this does not reduce our cost.
Heidi: We do not expect an impact from the events affecting change healthcare.
Heidi: We anticipate that a small portion of what would otherwise be Q1 revenue will be recognized in Q2.
Heidi: Guidance collectively reflects a mix of challenges and opportunities that ultimately puts us in a stronger position to grow sustainably.
Heidi: I'll now turn the call over to Mahmud for his closing remarks.
Mahmud U. Haq: Thank you know as discussed our entire team is focused on increasing profitability and free cash flow, while supporting our sustainable growth.
Mahmud U. Haq: I'd like to thank our employees customers and shareholders for their continued support operator, please open the floor for questions.
Unknown Attendee: From the MedSAR standpoint, we are in the process of stabilizing and strengthening our relationship with key industry health system players such as Epic, Meditech, and the like. We have had some successes, and it looks like that we probably will have more success as we get into the second half of the year. So for this year, for 2024, we think we believe that the revenue for MedSAR would at least be the stabilizer at the same level as it is in 2023, if or via some small top-line growth. Having said that, if we are able to pull off some of these relationships, whether it's Epic or Meditech and the like, which are the top players, we may see some more growth, but we're not accounting for that as part of the guidance.
Mahmud U. Haq: Thank you ladies and gentlemen, we will now begin the question and answer session for industry analysts who cover care cloud should you have a question. Please press star followed by the one on your Touchtone phone.
Operator: Here are three Tom prop acknowledging your request and your questions will be pulled in the order. They are received should you wish to decline from the polling process. Please press star followed by the two.
Operator: If you are using a speaker phone please lift the handset before pressing net's. Please limit to two questions and then rejoin the queue. If you have any other questions you have.
Operator: First question comes from Allen Klee with Maxim Group. Please go ahead.
Allen Robert Klee: Hello, Hi.
Allen Robert Klee: Just wanted to go over your guidance for 'twenty four.
Allen Robert Klee: And where you have the revenue increase.
Allen Robert Klee: Into that a little more.
Allen Robert Klee: And your what's your assumption for for meta saw which.
Allen Robert Klee: Just in general has been somewhat challenged so.
Allen Robert Klee: Kind of what just kind of give us how you think about how conservative the guidance is what what could cause it to.
Speaker Change: End up lower than that thank you.
Speaker Change: Hey, good morning, Alan and then and thank you for thank you for the question. So I think it would be first of all before getting too specific lean towards your answer I'm, just going to try to repatriate the fact that.
Speaker Change: If we think about for 2024, we are strategically directing our focus towards enhancing the bottom line profitability well, we do maintain a balanced approach.
Speaker Change: Recognize the significance of top line growth at the same time.
Unknown Attendee: From the top line perspective, there's the combination of our regular sales, our chronic care management, and the remote patient monitoring. And so we have accounted for that, and that's why we are not trying to put too optimistic growth targets on the top line, but the focus will continue to be throughout the year towards profitability, and that's where you will, and the shareholders will find the true value.
Speaker Change: And that remains the key priority for us, but we believe that sharpening over focus on profitability is essential for long term sustainability and value creation for all of our shareholders. So that's why if you think if you look at it at the annual guidance EBITDA guidance is you can see a significant increase over the last year.
Speaker Change: Since we are trying to focus on the liquidity and the profitability from the <unk> standpoint, we are in the process of stabilizing and as.
Speaker Change: As we strengthening our relationships with the key industry health system players such as epic made it. They can delay we have had some successes and we looked it looks like that we probably will have more success as we get into the get into the year. So far for this year FY 2020 for Visa Inc. We believe the <unk>.
Speaker Change: Revenues, we've made us I would at least stabilize it at the same level as it is on in 2023.
Speaker Change: Some some small topline growth, having said that if we are able to pull off some of these relationships.
Speaker Change: Is that because maybe they can delay which out of the top players. We may see some more growth, but youre not accounting to export as part of the guidance from the topline perspective.
Allen Robert Klee: Thank you. And my follow-up question is on, I don't remember what the name of it was, but a product that uses AI notes. Where is that?
Speaker Change: It's a combination of.
Speaker Change: Our regular sales were gardening care management and the remote patient monitoring and so we have recounted day four and that's why we are not trying to put too too optimistic growth targets on the top line, but the focus will continue to be throughout the year towards the profitability index are you willing to share.
Unknown Attendee: Could you talk about that, how you're targeting it, and what the benefits are? [inaudible] Sure. Similar to many other current competitions, everyone has started to introduce these products. And in our space, I think the way we are looking at it, it's going to bring more value towards improving the workflow of medical practices and how they can serve their patients better. So far, there was one product we launched last year, and then there is a recent one we demonstrated even at HIMSS.
Speaker Change: Holders of trying to find the true value.
Speaker Change: Thank you and my follow up question is on your I don't remember what the name of it was a product that uses AI to create.
Speaker Change: Where is that could you talk about that a little more than we're wrong.
Speaker Change: How youre targeting.
Speaker Change: You're at what the benefits are to the.
Speaker Change: To the doctors.
Speaker Change: Sure.
Speaker Change: Similar to similar to many other cut into other.
Speaker Change: I know the competition everyone has is starting to introduce these products and in our space I think the way we're looking at it it's going to be more value towards improving the workflow of the medical practice and how they can serve their patients better. So so far there was one product.
Speaker Change: We launched last year and then there is a recent one we demonstrated <unk>. The first one was there we are guiding the provider. We are trying to guide the provider in terms of this could be the potential next medicines.
Unknown Attendee: The first one was where we were guiding the provider. We were trying to guide the provider in terms of what could be the potential next medicines or the test that can be prescribed to the patients. And this other one, which we recently demonstrated, is where the AI can ambiently listen to the patient-doctor conversation and then convert that into a note. And once the doctor reviews it, he can click on it and save it into the chart. So it's going to improve the time. It's going to help the provider serve the patients better. If you think about it for the first one, we are still going through the process of optimizing the results as AI, no matter which AI model that you use.
Speaker Change: The test that can be prescribed to the patients in this other one which we recently demonstrated is weird.
Speaker Change: The AI can NBA MVP listen to the patient Doctor conversation and then can work that into a nord and once the doctor to views it and can click it and save it into the into the chart. So it's going to improve the time, it's going to help the providers of the patients better if you.
Speaker Change: Think about it for the first one of yesterday going to optimizing the residuals as AI, even no matter, which.
Speaker Change: The model that you use OLED.
Unknown Attendee: Over time, it's continuously being trained, and the responses to the prompts are being improved. So we are going through that optimization process. We have over 100 subscriptions, as you would say, without any data. We haven't yet started charging the per license fee.
Speaker Change: Over the time, it's continuously been trained and responses the responses of the Bronx are being improved so we are going to net optimization. We have a 100, a subscription that you would see without and we haven't yet started charging deferred license sweets and we will keep on evaluating the right time when we showed introduced.
Unknown Attendee: And we will keep on evaluating the right time when we should introduce a fee for this product, but we have started to see the progress made on this product and how it's adding value to the day-to-day workflow of the medical practice. Thank you. Ladies and gentlemen, as a reminder, should you have a question, please press the star followed by the number one. There are no further questions at this time. Please proceed. Okay, well, if there's no more questions, then thank you everyone for joining our call. Please enjoy the rest of your day. Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.
Speaker Change: I'll stick with this for this product, but we have we have started to see the progress made into this product and how it's adding value to the day to day workflow after medical practices.
Speaker Change: Thank you.
Speaker Change: Thank you Kevin.
Speaker Change: Yes.
Speaker Change: Ladies and gentlemen, as a reminder, should you have a question. Please press star followed by the one.
There are no further questions at this time. Please proceed.
Speaker Change: Okay.
Speaker Change: There's no more questions and thank you everyone for joining our call. Please enjoy the rest of your day. Thank you.
Speaker Change: Thanks, so much.
Speaker Change: Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.
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