Q1 2024 CareCloud Inc Earnings Call
[music].
Good morning, ladies and gentlemen, and welcome to the Coeur Cloud, Inc. First quarter 2024 results conference call.
Operator: Good morning, ladies and gentlemen, and welcome to the CareCloud, Inc. first quarter 2024 results conference call. At this time, all lines are in the listen-only mode.
Speaker Change: At this time all lines are in a listen only mode.
Operator: Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Also, please note that this call is being recorded on Tuesday, May 14, 2024. And I would like to turn the conference over to Liz Ferrer, Vice President of Human Resources. Please go ahead.
Speaker Change: Following the presentation, we will conduct a question and answer session. If at any time during this call get require immediate assistance. Please press star zero for the operator also note that this call is being recorded on Tuesday may 14th 2024, and I would like to turn the conference over to Luther Vice President of Human resources. Please go ahead.
unknown: ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??
Speaker Change: Ed.
Speaker Change: Good morning, everyone welcome to Coeur cloud first quarter 2024 conference call on today's call are Mahmud Haq, our founder and executive Chairman had a Calgary, our Chief Executive Officer, and director, Stephen Snyder, Our President and Northern Rock, our interim Chief Financial Officer.
Unknown Executive: Good morning, ladies and gentlemen, and welcome to the CareCloud, Inc. first quarter 2024 results conference call. At this time, all lines are in the listen only mode.
Liz Ferrer: Good morning, everyone. Welcome to CareCloud's first quarter 2024 conference call. On today's call are Mahmud Haq, our Founder and Executive Chairman, Hadi Chowdhury, our Chief Executive Officer and Director, Stephen Snyder, our President, and Norman Roth, our Interim Chief Financial Officer and Controller. 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.
Speaker Change: Our own controller before.
Unknown Executive: Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Also, please note that this call is being recorded on Tuesday, May 14, 2024. And I would like to turn the conference over to Liz Ferrer, Vice President of Human Resources. Please go ahead.
Speaker Change: 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 27 a of the.
Speaker Change: The Securities Act of 1933 as amended and section 21 of the Securities Exchange Act of 934 as amended.
Unknown Attendee: Good morning, everyone. Welcome to CareCloud's first quarter 2024 conference call. On today's call are Mahmud Haq, our Founder and Executive Chairman, Hadi Chowdhury, our Chief Executive Officer and Director, Stephen Snyder, our President, and Norman Roth, our Interim Chief Financial Officer and Controller. 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.
Speaker Change: 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.
Speaker Change: Forward looking statements may sometimes be identified with words, such as well.
Unknown Attendee: 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. 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.
Speaker Change: <unk> expect plan anticipate upcoming believe estimate or similar terminology and the negative of these terms.
Speaker Change: 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 would cause the actual results could differ materially from those contemplated in these forward looking statements.
Unknown Attendee: 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 first quarter 2024 earnings presentation.
Speaker Change: It must reflect our opinion 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. 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.
Speaker Change: Factors that could cause actual result could differ materially from these forward looking statements.
Speaker Change: For anyone who dialed into the call by telephone you may want to download our first quarter 2024 earnings per application.
Unknown Attendee: Please visit our investor relations site, ir.carecloud.com, click on News and Events, then click IR Calendar, click on First Quarter 2024 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 the press release at today's press release announcing our first quarter 2024 results for a reconciliation of these non-GAAP performance measures to our GAAP final results. With that said, I'll now turn the call over to our CEO, Hadi Chowdhury. Hadi
Speaker Change: Please visit our Investor Relations site.
Speaker Change: <unk> got <unk> dot com click on news and events.
Investor Relations: Then click IR calendar second first quarter 2024 results conference call and download the earnings presentation.
Investor Relations: Finally on today's call, we may refer to certain non-GAAP financial measure. Please refer to your press release today's press release announcing our first quarter 2024 results for a reconciliation of these non-GAAP performance measures to our GAAP final result.
CEO: With that said I'll now turn the call over to our CEO had a challenging hardy.
CEO: Thank you Liz and thanks to all of you for joining of our first quarter 2024 earnings call.
Hadi Chowdhury: Thank you, Liz, and thanks to all of you for joining our first quarter 2024 earnings call. As we discussed in our most recent earnings call, this year we will continue to remain steadfastly focused on increasing profitability and free cash flow. To achieve this overarching objective, our team will leverage our proven technology expertise and AI, our integrated global workforce, and our core competencies related to integration and cost rationalization. Our first quarter results demonstrate that we are making progress on our objective.
CEO: As we discussed in our remarks.
CEO: Most recent earnings call next year, we will continue to remain steadfastly focused on increasing profitability and free cash flow.
CEO Hardy: To achieve this overarching objective our team will leverage our proven technology expertise and AI.
Speaker Change: Greater global workforce and of our core competencies related to integration and cost rationalization.
CEO Hardy: Our first quarter results demonstrate that we are making progress on our objective.
Hadi Chowdhury: In particular, since October of 2023, we have identified approximately $22 million of annualized cost reduction measures that we are working to implement. The early results of these cuts are beginning to be seen as our cash from operations increased to $4.1 million as compared to $1 million during the first quarter of last year, and our adjusted EBITDA was $3.7 million. This increase in cash enabled us to pay down $2 million of our credit facility.
Speaker Change: In particular since October of 2023, we have identified approximately $22 million of annualized cost reduction measures that we are working to implement.
Speaker Change: The early results of these cards are beginning to be seen as the cash from operations increased to $4 1 million.
Speaker Change: As compared to $1 million.
Speaker Change: During the first quarter of last year.
Speaker Change: Adjusted EBITDA was $3 7 million.
Speaker Change: This increase in cash enabled us to pay down $2 million.
Speaker Change: The credit facility.
Hadi Chowdhury: $1 million during Q1 and another $1 million so far in the second quarter. These improvements in profitability are in spite of the fact that our revenue, which was $26 million for the first quarter, was lower than the first quarter last year, primarily due to the lower non-recurring revenue for MedSAR. Year over year, we saw improvements in our digital health offering, with revenue growing nearly four times. We continue to remain confident that the cross-selling opportunity of higher margins taken by RCM to our non-recurring professional services clients will continue to represent a significant opportunity for growth.
Speaker Change: $1 million during Q1, and another $1 million so far in the second quarter.
Speaker Change: These improvements in profitability are in spite of the fact that our revenue mix was $26 million for the first quarter was lower than fourth quarter last year, primarily due to the lower nonrecurring revenue.
Speaker Change: Sure.
Speaker Change: The year over year, we saw improvement in our digital health offering with revenue growing nearing four times.
Speaker Change: We continue to remain confident that the cross selling opportunity of higher margin <unk>.
RCM: RCM two older non recurring professional services clients will continue to represent a significant opportunity for growth.
Speaker Change: We continue to align our expenses with our revenue and are focusing on the opportunities that generate the best return on investment.
Hadi Chowdhury: We continue to align our expenses with our revenue and are focusing on the opportunities that generate the best return on investment. Our primary objective will remain centered on profitability and free cash flow, supported by a company-wide commitment to operating leverage and improving our comparative position.
Speaker Change: Our primary objective will remain centered on profitability and free cash flow supported by a company wide commitment to operating leverage and improving our competitive position.
Speaker Change: I will cover these results in more detail later in the call.
Speaker Change: Turning to wood products as our investors know from a proprietary end to end platform is fully integrated and designed with the flexibility to be adapted across markets and to meet the evolving needs of our clients. The overwhelming majority of whom utilize more than one carrier cloud solution.
Hadi Chowdhury: Norm will cover these results in more detail later in the call. Turning to our products, as our investors know, our proprietary end-to-end platform is fully integrated and designed with the flexibility to be adapted across markets and to meet the evolving needs of our clients, the overwhelming majority of whom utilize more than one CareCloud solution. We continue to see rising demand for our digital health and generative AI solutions, as we are eager to meet this demand with our scalable solutions and specialized workforce.
Speaker Change: We continue to see rising demand for our digital health engendered UBI solution as we are eager to meet this demand with a very scalable solution and specialized workforce.
Speaker Change: In Q4 of 2023.
Hadi Chowdhury: In Q4 of 2023, we were thrilled to introduce our groundbreaking suite of generative AI solutions, CareCloud Serious AI. This innovative platform has empowered our revenue cycle management team with our generative AI-based appeals product, revolutionizing the appeal generation process with unparalleled effectiveness and cost-efficiency.
Speaker Change: We were thrilled to introduce our groundbreaking suite of generative AI solutions.
Speaker Change: Cloud service AI.
Speaker Change: This innovative platform has empowered our revenue cycle management be Middlebury generating AI based appeal product.
Middlebury: Revolutionizing the appeal generation process with unparalleled effectiveness and cost efficiency.
Middlebury: Additionally, we have seamlessly integrated a virtual support assistant into offering ensuring over valued customers receive enhanced and timely support.
Hadi Chowdhury: Additionally, we have seamlessly integrated a virtual support assistant into our offering, ensuring our valued customers receive enhanced and timely support. The CareCloud Serious AI Guide represents a significant leap forward in leveraging AI to deliver clinical decision support. By streamlining data input processes and providing real-time, evidence-based recommendations, it assists clinicians in their workflow, ultimately enhancing diagnostic accuracy and treatment plans. By analyzing past medical and social histories alongside current symptoms, it generates suggestive patient charts facilitating informed decision making.
Middlebury: The cat loss it has AI guide.
Middlebury: Zane for significantly forward and leveraging AI to deliver clinical decision support by streamlining data input processes and providing real time evidence based recommendation.
Zane: Clinicians in their workflow ultimately enhancing diagnostic accuracy and treatment planning.
Karen: By analyzing path medical and social history, alongside Karen symptom.
Zane: When rates suggestive patient chart, facilitating inform decision making.
Zane: Since its launch we have seen tremendous interest in the carrier cloud AI guide.
Hadi Chowdhury: Since its launch, we have seen tremendous interest in the CareCloud Serif AI Guide, with over 400 customers signing up or expressing interest in this transformative tool. We remain committed to providing this product free of charge to our existing clientele as we continue to refine our AI technology and improve outcomes. In just the past several months, CIRAS AI Guide has facilitated thousands of recommendations, underscoring our dedication to delivering actionable insights and exceptional service.
Karen: With over 400 customers signing up are expressing interest in this transformation.
Karen: We remain committed to providing this product free of charge to our existing client tail as we continue to refine our AI technology and improve outcomes.
Karen: In just the past several months.
Speaker Change: Guide has facilitated thousands of recommendation.
Speaker Change: Underscoring our dedication to delivering actionable insight and exceptional service.
Karen: And can you ink our commitment.
Hadi Chowdhury: Continuing our commitment to advancing healthcare technology, we are proud to introduce our latest offering, Terus AI Nodes. This solution revolutionizes the transcription process of provider-patient interactions, delivering precise clinical notes in real-time within a secure HIPAA-compliant environment. Operating seamlessly during patient consultations, CareCloud Cirrus AI nodes using ambient AI technology intelligently identify crucial dialogue and medical terminology, compiling them into comprehensive clinical notes for immediate review by physicians. Upon approval, these notes are securely archived within the patient's electronic health record, ensuring seamless continuity of care.
Harris AI: To advancing health care technology, we are proud to introduce our latest offering Harris AI notes.
Harris AI: This solution revolutionizing the transcription process of provider patient interactions.
Harris AI: Levering precise clinical north in real time with in a secure HIPAA compliant environment.
Harris AI: <unk> seamlessly during patient consultation care cloud <unk> AI using ambient air technology, intelligently identify crucial dialogue and medical terminology, compiling them into comprehensive clinical node, but immediate review by physicians.
Ai: Upon approval. These north are securely archive within the patient's electronic health record, ensuring seamless continuity of care.
Speaker Change: We are currently evaluating and testing this solution with our initial pilot group.
Hadi Chowdhury: We are currently evaluating and testing this solution with our initial pilot group. Over the next 30 days, we plan to introduce it to our existing customer base at a market-competitive price. Additionally, we are implementing a risk-free trial period to ensure customer satisfaction and confidence in the product.
unknown: Over the next 30 days, we plan to introduce it to our existing customer base at market competitive background.
Speaker Change: Additionally, we are implementing a risk free trial period to ensure customer satisfaction and confidence in the product.
Speaker Change: Finally, I am pleased to welcome back Steve Snyder to have an executive team as president.
Hadi Chowdhury: Finally, I'm pleased to welcome back Steve Snyder to our executive team as president. Whether it has been a general counsel, chief strategy officer, president, or CEO, he has partnered with me and our broader team over the last two decades, and we have all worked together to build a world-class, game-changing company. I will now turn the floor over to Steve.
Steve Snyder: Has been a general counsel Chief strategy Officer, President or CEO.
Steve Snyder: He has partnered with me and have a broader team over the last two decades, and we have all worked together to build a world class game changing company.
Steven: I will now turn the floor over to Steven.
Speaker Change: Steve.
Steven Smith: Thanks Ali and thank you to our investors for joining today's call.
Stephen A. Snyder: Thanks, Adi, and thank you to our investors for joining today's call. As Hadi explained, we are very pleased to see early signs that the fruits of the company's hard work are beginning to bear fruit. In particular, we've seen year-over-year increases of more than 200% in our free cash flow. Our cash from operations has increased by nearly 300%, and we posted $129,000 of GAAP operating income versus a loss last year during this quarter of $223,000.
Steven Smith: And how do you explain.
Steven: We are very pleased to see early signs that the fruit of the company's hard work is beginning to come to fruition.
Steven Smith: Particular, we've seen year over year increases of more than 200% and our free cash flow.
Steven Smith: Our cash from operations has increased by nearly 300% and we posted $129000 of GAAP operating income versus a loss last year during this quarter of $323000.
Steven: We believe that these numbers are not mere aberration.
Stephen A. Snyder: We believe that these numbers are not mere aberrations. Instead, they are the direct result of decisive actions taken by the company that are starting to be seen in our financial statements. They are snapshots of a trend line that we believe is moving strongly in the right direction.
company: Said they are the direct result of decisive actions taken by the company that are starting to be seen in our financial statements.
company: They are SaaS shot of a trend line that we believe is moving strongly in the right direction.
Speaker Change: Between October 2023, and today, we have identified approximately $22 million in annualized cuts that we plan to execute before the end of 2024.
Stephen A. Snyder: Between October 2023 and today, we have identified approximately 22 million in annualized cuts that we plan to execute before the end of 2024. Additionally, we have identified and taken preliminary steps on other material cuts that will not be seen until 2025 due to contract term requirements. As to the 2024 reductions, we have already taken action on approximately 75% of the $22 million in reductions. That's why we expect an in-year impact during the 2024 loan of approximately $15 million in reduced expenses. But let's focus for a minute on a specific example.
Speaker Change: Additionally, we have identified and taken preliminary steps on other material cuts that will not be seen until 2025 due to contract term requirements.
Speaker Change: As to the 2024 reduction we have already taken action on approximately 75% of the $22 million in reduction.
Speaker Change: That's why we expect an in year impact during 2024 loan.
Speaker Change: Approximately $15 million in reduced expenses.
Speaker Change: So let's focus for a minute on a specific example.
Speaker Change: Prior to 2024, we continue to rely on three different partners, who provided R&D resources at a combined annualized cost of approximately $3 million.
Stephen A. Snyder: Prior to 2024, we continued to rely on three different partners who provided R&D resources at a combined annualized cost of approximately $3 million. We acquired these partnerships in conjunction with various acquisition closings. As part of our cost rationalization assessment, we developed an action plan for transitioning this work to our internal R&D team members and expect to realize net annualized savings of approximately $1.9 million, within your savings of $1.4 million. Better yet, as we leverage our team, we are able to more tightly control and accelerate the development efforts without the operational risks associated with relying on third parties.
Speaker Change: We inherited these partnerships in conjunction with various acquisition closings.
Speaker Change: As part of our cost rationalization assessment, we developed.
Speaker Change: And action plan for transitioning this work to our internal R&D team members and expect to realize net annualized savings of approximately $1 $9 million within your savings of $1 4 million.
Speaker Change: Better yet as we leverage our team we were able to more tightly control and accelerate the development efforts without the operational risks associated with relying on third parties.
Speaker Change: By focusing on doing more with less we are becoming a stronger more effective and more nimble company.
Stephen A. Snyder: By focusing on doing more with less, we are becoming a stronger, more effective, and more nimble company. Since our founding, our competitive advantage has always been centered around our cost-efficient global team, our core technology strength, and our unique integration capabilities. The more we lean into these strengths, the more we are able to reduce costs, and the stronger our platform becomes. These are but a small number of the multitude of expense reductions that have already occurred or will soon occur, the sum of which will save us $15 million in 2024, and far more as we move forward. I'll now turn the floor over to our intern CFO, Norm Roth. Okay, Norm?
Speaker Change: Since our founding our competitive advantage has always been centered around our cost efficient global team our core technology strength.
Speaker Change: Our unique integration capabilities.
Speaker Change: The more we lean into the strength the more we are able to reduce costs and the stronger our platform becomes.
Speaker Change: These are but a small number of the multitude of expense reductions that have already occurred.
Speaker Change: Or will soon occur with some of which will save us $15 million during 2024 and far more as we move forward.
Speaker Change: I'll now turn the floor over to our interim CFO Nomura.
Speaker Change: Norm.
Norm: Thanks, Steve and thank you all for joining our call today.
Norman S. Roth: Thanks, Steve. And thank you all for joining our call today. I would like to start by reiterating Heidi and Steve's sentiment that we are pleased to report that our first quarter results were in line with our expectations.
Norman S. Roth: Thanks, Steve, and thank you all for joining our call today. I would like to start by reiterating Heidi and Steve's sentiment that we are pleased to report that our first quarter results were in line with our expectations, and we are on track to achieve our full year goals of returning to profitability and positive cash flow. In the first quarter, we reported revenue of nearly $26 million. While down year over year, the bulk of the decline, $2 million, was due to MedSR, which is a project-based professional services business that tends to fluctuate. MedSR had softness in the second half of last year, which is continuing.
Speaker Change: I'd like to start by reiterating Heidi and Steve sentiment that we are pleased to report that our first quarter results were in line with our expectations and we are on track to achieve our full year goal.
Speaker Change: Returning to profitability and positive cash flow.
Speaker Change: In the first quarter, we reported revenue of nearly $26 million.
Speaker Change: While down year over year, the bulk of the decline $2 million.
Speaker Change: Due to <unk>, which is a project based professional services business it tends to fluctuate.
Speaker Change: <unk> had softness in the second half of last year, which is continuing.
Norman S. Roth: So our expectation is that our second quarter professional services revenue will be similar to the first quarter. But we are hopeful that we will see some growth in the second half of 2024. More importantly, our direct operating costs decreased by almost $3 million from Q1 2023, and our operating expenses, including G&A, R&D, and sales and marketing expenses, decreased by $2.4 million. We reported positive GAAP operating income of $129,000 for the first time since Q4 2022, and our GAAP net loss decreased from $401,000 in Q1 2023 to $241,000.
Speaker Change: Our expectation is that our second quarter professional services revenue will be similar to first quarter, but we are hopeful that we will see some growth in the second half of 2024.
Speaker Change: More importantly, our direct operating cost decreased by almost $3 million from Q1, 2023, and our operating expenses, including G&A, R&D and sales and marketing expenses decreased by $2 4 million.
Speaker Change: We reported positive GAAP operating income of $129000.
Speaker Change: First time since Q4, 2022, and our GAAP net loss decreased from $401000 in Q1 2023 to $241000.
Speaker Change: We reported adjusted EBITDA of $3 $7 million in the first quarter.
Norman S. Roth: We reported adjusted EBITDA of $3.7 million in the first quarter. Our GAAP earnings per share was negative 2 cents compared to negative 28 cents in Q1 2023. This improvement in profitability translated into an improvement in cash flow. Our net cash provided by operating activities was $4.1 million, almost four times what we earned in Q1 2023. And our free cash flow was $2.2 million, compared to negative $2 million last year. Please note that free cash flow is a measure of cash we generate from operating and investing activities and does not take into account the use of cash during Q1 of 2023 for our preferred stock dividend.
Speaker Change: Our GAAP earnings per share was negative <unk> <unk>.
Speaker Change: Compared to negative 28.
Speaker Change: In Q1 2023.
Speaker Change: This improvement in profitability translated into an improvement in cash flow.
Speaker Change: Our net cash provided by operating activities was $4 $1 million almost four times Q1 2023.
Speaker Change: Our free cash flow was $2 2 million.
Speaker Change: <unk> to negative $2 million last year.
Speaker Change: Please note that free cash flow is a measure of cash we generate from operating and investing activities and does not take into account the use of cash during Q1 of 2023 for our preferred stock dividends.
Speaker Change: Our free cash flow allowed us to pay down $1 million on our SBB line of credit during Q1, and still end the quarter with $4 $1 million of cash an increase of $800000 from December 31 2023.
Norman S. Roth: Our free cash flow allowed us to pay down $1 million on our SVB line of credit during Q1 and still end the quarter with $4.1 million of cash, an increase of $800,000 from December 31, 2023. We paid down another $1 million on the SVB credit line during April. Reducing our SVB line of credit balance by generating positive free cash flow is a top priority for us and is a prerequisite to being able to restart the dividends on our preferred stock.
SBB: We paid down another $1 million on the FCB credit line during April.
Speaker Change: Reducing our SBB line of credit balance by generating positive free cash flow is a top priority for us and as a prerequisite to being able to restart the dividends on our preferred stock.
SBB: I'll close my comments by reiterating our 2020 for guidance, we continue to expect revenue of $118 million to $120 million and adjusted EBITDA of 21% to $23 million we.
Norman S. Roth: I'll close my comments by reiterating our 2024 guidance. We continue to expect revenue of $118-$120 million and adjusted EBITDA of $21-$23 million. We expect to see steady quarterly revenue growth throughout the year, and as we hold the line on expenses, this means that our adjusted EBITDA and cash flows will grow even faster than revenue. The first quarter results put us on a good footing for the year ahead. We're happy with our progress toward returning to profitability and look forward to updating you later in the year. With that, I'll turn the call over to Mahmoud for closing remarks.
SBB: We expect to see steady quarterly revenue growth throughout the year and as we hold the line on expenses. This means that our adjusted EBITDA and cash flows will grow even faster than revenue.
Speaker Change: First quarter results puts us on a good footing for the year ahead.
Speaker Change: We're happy with our progress toward returning to profitability.
Speaker Change: We look forward to updating you later in the year.
my mood: With that I'll turn the call over to my mood for closing remarks.
mood: Thank you norm.
my mood: Our primary focus is on disciplined operational improvements setting the stage for profitable and sustainable growth ultimately, creating long term value for our shareholders I would like to thank our employees customers and shareholders for their continuous support and furthering carrier Cloud Commission.
my mood: Operator, please open the floor for questions.
my mood: Thank you Sir.
Operator: Ladies and gentlemen, we will now begin the question and answer session with analysts that cover CareCloud. Should you wish to ask a question, please press a star followed by one on your touch-tone phone. You will then hear a three-tone prompt acknowledging your request. And if you would like to withdraw from the question queue, simply press the star followed by two. And if you're using a speakerphone, we ask that you please lift the handset before pressing any key.
Operator: Ladies and gentlemen, we will now begin the question and answer session from analysts that cover care cloud should you wish to ask a question. Please press star followed by one on your Touchtone phone.
Operator: Here.
Operator: Prompt acknowledging your request and if you would like to withdraw from the question queue simply press star followed by two.
Operator: You're using a speaker phone.
Analyst: Can you please lift the handset before pressing any keys.
Speaker Change: Out of consideration for callers today, we ask that you. Please limit yourself to two questions and then return to the queue. If you have more.
Operator: And out of consideration for the callers today, we ask that you please limit yourself to two questions and then return to the queue if you have more. Please go ahead and press star 1 now if you have any questions. And your first question will be from Jeffrey Cohen at Lindenburg. Please go ahead.
Speaker Change: Please go ahead and press Star one now if you have any questions.
Speaker Change: And your first question will be from Jeffrey Cohen at Ladenburg. Please go ahead.
Jeffrey Scott Cohen: Oh, Hey, good morning, Thanks for taking our questions I guess.
Jeffrey Scott Cohen: Hey, good morning. Thanks for taking our questions. I'd like to start with yesterday's press release and give us a little flavor of it as far as the capital structure update and the announcement yesterday.
Jeffrey Scott Cohen: Firstly could you talk about.
Jeffrey Scott Cohen: Yesterday's press release and give us a little flavor on that as far as the capital structure. Okay.
Speaker Change: Now lets me yesterday.
Speaker Change: Sure Good morning, Jeff Thanks for the question.
Stephen A. Snyder: Sure, good morning, Jeff. Thanks for the question. And maybe, Jeff, if we kind of step back for a minute.
Speaker Change: And maybe Jeff as we kind of step back for a minute.
Speaker Change: As you know.
Jeff: Pretty common for public companies to receive these sorts of inbound expressions of interest in one form or another and as a general rule.
Jeff: They don't necessarily publicly disclose them.
Jeff: And we're no different in that regard, but for this particular indication of interest.
The board: The board thought that it was important to provide disclosure.
Stephen A. Snyder: As you know, it's pretty common for public companies to receive these sorts of inbound expressions of interest in one format or another. And, as a general rule, they don't necessarily publicly disclose them all. And we're no different in that regard.
Board: As context to explain to your point.
Jeff: Why we selected citizens to A&P to analyze the overall capital structure and to provide guide.
Stephen A. Snyder: But for this particular indication of interest, the board thought that it was important to provide disclosure as context to explain, to your point, why we selected Citizens JMP to analyze the overall capital structure and to provide guidance with regard to potential changes to the capital structure. And those changes, of course, would be changes to ensure and protect the best interests of the company and also the best interests of all the shareholders.
Jeff: Guidance with regard to potential changes to the capital structure.
The board: And those changes of course would be changes to ensure and to protect the best interest of the company and also the best interest of all the shareholders. So by providing some more granular details at least on a high level with regard to the indication of interest.
Stephen A. Snyder: So by providing some more granular details, at least on a high level with regard to the indication of interest, we thought that was helpful, again, to point out the differentiation that at least this particular party was making with regard to the treatment of the preferred A's and the B's in the context of a change of control. The context, of course, being that in a change of control with regard to Series B, in effect, the buyers of the common stock would ultimately pay the accrued dividends and liquidation value of $25 in conjunction with any transaction.
The board: We thought that was helpful again.
The board: To point out.
Speaker Change: The differentiation at least this particular.
Jeff: Marty was making with regard to the treatment of the preferred as and the BS.
Marty: In the context of a change of control.
Marty: The context of course being that in the change of control with regard to our series B.
Marty: In fact, the buyers of the common stock will ultimately pay the accrued dividend and liquidation value of $25 in conjunction with any transaction.
Marty: And at least this particular indication of interest was silent as to the series a.
Stephen A. Snyder: And at least this particular indication of interest was silent as to Series A. And again, the board thinks it's important to receive some guidance from a bank like Citizens JMP with regard to any possible modifications of the certificate of designation that could address this disparity.
Marty: And again the board thinks it is important too.
Citizens JMP: To receive some guidance from for a bank like citizens JMP.
Board: With regard to any possible modifications of the certificate of designation that.
Board: Could could address this disparity.
Marty: That's helpful Suite could you give us a sense of is that a PE fund or a competitive company in the space or any color there is appreciated.
Stephen A. Snyder: That's helpful, Steve. Could you give us a sense? Was that a PE fund or a competitive company in the space, or any color that is appreciated?
Stephen A. Snyder: Sure, sure. It was a leading PE fund.
Speaker Change: Sure sure Yeah, It was a leading p/e funds.
Speaker Change: Got it Okay, and then secondly for us any comments on the lines of credit where does it stand now and what would you expect it to look like.
Stephen A. Snyder: Got it. Okay.
Norman S. Roth: And then, secondly, for us, any comments on the line of credit? Where does it stand now? And what would you expect it to look like throughout 2024?
Speaker Change: 2024.
Norman S. Roth: So thank you for the question, Jeff. So right now, our credit line is $8 million. And so let me just give you a little background, if I could just on the credit line and on the dividend. So we have the $25 million line of credit with SVB, and then last December we had about 10 million; we had 10 million drawn on the line, and the bank made it clear that if we continued paying the dividends, we wouldn't see any relaxation of the covenants in order for us to access the remaining $15 million on the line, either So we made the difficult decision to suspend the Preferred Stock Dividend last December.
Geoff: Thank you for your question Geoff So right now.
Unknown Attendee: The credit line is <unk>.
Unknown Attendee: $8 million.
Geoff: And.
Unknown Attendee: So let me just give you a little background, if I could just on the credit line.
Geoff: On the dividend so we have the $25 million line of credit with SBB.
SBB: And then.
SBB: Okay.
SBB: Assembly at about $10 million, we had $10 million on the line.
SBB: The bank made it clear that if we continue paying the dividend we wouldn't see any relaxation of the covenants in order for us to access the remaining $15 million on the line needed for business in Asia.
The bank: The preferred dividend.
Speaker Change: So we made the painful decision to suspend the preferred stock dividend last December same time, we continue with our plan to reduce expenses across the company.
Norman S. Roth: At the same time, we continue with our plan to reduce expenses across the company, and our focus has become achieving positive free cash flow and profitability. And as of today, as we previously said on the call, we've identified approximately $22 million in annualized cost reductions, and in 2024, there'll be savings of approximately $15 million, approximately equal to our annual dividend. You know, our pre-cash flow was 2.2 million. We currently plan to continue retaining the line from our cash flow.
Speaker Change: And our focus became achieving positive free cash flow and profitability.
Speaker Change: As of today as we previously said on the call. We've identified approximately 2000 2020 $2 million in.
Speaker Change: And annualized cost reductions in 2020 for energy savings product line $15 million.
Speaker Change: Equal to our annual dividend.
Norman S. Roth: We want to see several more months of positive cash flow that would cover the dividends before we have a specific discussion about reinstating the dividend. We have paid down $2 million on the dividend to date. The balance is $8 million. And, of course, the board and the management are very confident about the future of the company, which is reflected in the 38% insider ownership. Mahmud Haq, our company's founder, has increased his ownership to over 5 million shares compared with the approximately 4.8 million shares he had at the IPO. So it's such a large inside ownership interest, our founder, and the rest of the company's office and directors have the best interest in ensuring that the company's efforts will be successful. Hopefully, that answers your question.
The bank: Free cash flow was $2 2 million.
The bank: We currently plan to continue repaying the line from our cash flow we wanted to do.
Speaker Change: Several more months of positive cash flow that would cover the dividends before we ever receive.
Speaker Change: Vic discussion about reinstating the dividend.
Vic: We paid down $2 million on the dividend to date, the balance is $8 million.
Vic: Of course, the board and the management are very confident about the future of the company, which is reflected by the 38% insider ownership.
Speaker Change: My mood HOKA company's founder has increased its ownership to over.
Speaker Change: <unk> 5 million shares compared with the approximately $4 8 million shares he had EBITDA.
Speaker Change: So with such a large insider ownership interest are found the rest of the company's officers and directors have best interest ensuring that the company's efforts will be successful.
Vic: Hopefully that answers your question.
Vic: Did that answer your question Geoffrey.
Operator: Did that answer your question, Jeffrey?
Geoffrey: Yes, thank you very much.
Jeffrey Scott Cohen: Yes, thank you very much. Thank you.
Vic: Thank you.
Allen Robert Klee: The next question is from Allen Klee at Maxim Group. Please go ahead.
Vic: Next question is from Allen Klee of Maxim Group. Please go ahead.
Allen Robert Klee: Yes, hi.
Allen Robert Klee: Yes, hi. Congratulations on the profitability improvement. The question about your guidance: you commented that you expect revenue to increase each quarter for the rest of the year. We know that the first quarter is seasonally low, so we would expect it to jump up in QQ. But could you kind of give us the playbook for why you expect 3Q and 4Q to continue to grow after that? Thank you.
Vic: Congrats on the.
Allen Robert Klee: Profitability improvement.
Allen Robert Klee: A question on your guidance you commented that you expect revenue to increase.
Allen Robert Klee: Each quarter for the for the rest of the year, we know that first quarter is seasonally low so we would expect the jump up in.
Vic: <unk>.
Speaker Change: Could you could you kind of give us the playbook for why.
Speaker Change #103: You expect <unk> to continue to grow after that thank you.
Adam: Yeah. Thanks, Thanks, Adam.
Hadi Chowdhury: Thanks, thanks, Adam. So, as you rightfully said, the first quarter typically has seasonality and that those numbers are comparatively will be down compared to the rest of the rest of the quarters into the year. We and I mentioned during our prepared remarks that if we look at our digital health offering, as an example, the revenue from year over year is an increase by roughly four times. So we do see the increase in revenue coming from whether it's a digital health offering, whether it's the sales that our team has made for our technical technology enabled solutions.
Adam: As you rightfully say there the first quarter typically has the seasonality.
Speaker Change: Those numbers out competitively it will be down compared to the rest of the rest of the quarters into the year.
Adam: And I mentioned during our prepared remarks.
Vic: You look at our digital health offering as an example.
Vic: On the revenue year over year and increased by roughly.
Speaker Change: Four times, so we do see the increase in the revenue coming from limited visibility offering whether it's over the sales that we would deem as meaningful alert technology.
Vic: Technology enabled solutions. So it's a combination of over our entire suite of proprietary solutions RCM solution and digital health solutions and towards the second half that could be.
Hadi Chowdhury: So it's a combination of our entire suite of proprietary solutions, the RCM solution, and digital health solutions. And towards the second half, there could be some contribution from different AI, the products and services we are offering.
Speaker Change: Some contribution from some different AI.
Speaker Change: Other products and services, we're offering.
Speaker Change: Thank you I have one other follow up question on.
Hadi Chowdhury: Thank you. I have one other follow-up question on the expression of interest. You know, you know, one of the series has to be redeemed, the other one to be left outstanding. If it was left outstanding, I'm assuming though, it's still a liability of the acquiring company, right? Is that true? That's correct, Allen. Yeah, they would still be in the
Speaker Change: On the expression of interest.
Speaker Change: You know one of the series.
Speaker Change: It has to be redeemed the other one to be left outstanding if it was left outstanding.
Speaker Change: Assuming though it's still a liability of the.
Speaker Change: Acquiring company right.
Speaker Change: Okay.
Speaker Change: Is that true.
Alan: That's correct Alan Yes, they would still is in the context of a transaction would still have all the same obligations that said that we would have relative to the A's.
Stephen A. Snyder: That's correct, Alan. Yeah, they would still, in the context of a transaction, still have all the same obligations that we would have relative to the A's.
Speaker Change: Thank you.
Speaker Change: Thank you. Thank you.
Operator: As a reminder, ladies and gentlemen, if you do have any questions, please press star followed by one on your touchtone phone. And your next question will be from Bill Sutherland at Benchmark. Please go ahead.
Operator: As a reminder, ladies and gentlemen, if you do have any questions. Please press star followed by one on your Touchtone phone.
Operator: And your next question will be from Bill Sutherland with benchmark. Please go ahead.
Operator: Alright. Thanks.
William Sutherland: Hey, thanks. Hello, everybody. Welcome back, Steve. I was thinking about the cost takeouts, maybe one or two other important examples that you're going to be counting on for the... The Target.
Operator: Hello, everybody and welcome back Steve.
Operator:
Bill Sutherland: I was thinking online cost on the cost Takeouts, maybe one or two other <unk>.
Bill Sutherland: Important examples of that year.
Bill Sutherland: Okay.
Steve: Be counting on for the.
Steve: The target.
Bill: For sure. Thanks, a lot for your question Bill.
Stephen A. Snyder: For sure, thanks a lot for your question, Bill. Again, if we kind of step back for a minute, and we think kind of big picture in terms of where we're at, since we initially discussed the overall reduction in expenses as a project back in the fourth quarter of last year, we've identified 22 million in annualized cost savings. And if we kind of think about what our competitive advantage as a company has always been, it's really been the ability to leverage kind of our cost-efficient, fully integrated team. And one kind of a second core part of that competitive advantage has been our technological capabilities. So our IT R&D team.
Stephen A. Snyder: And then third, has been our ability, from an integration perspective, to integrate additional solutions that we're launching, and also in the context of growth, to leverage those capabilities to fully integrate new clients, both in organic growth and also historically in acquisitive growth. So if we kind of think about that, those kind of core competitive advantages, as we really lean into those advantages, frankly, the more we lean into those, the more we're capable of reducing costs.
Speaker Change #102: Again, if we kind of step back for a minute and we think of kind of big picture in terms of where we're at since we.
Stephen A. Snyder: And candidly, the stronger the company, the stronger the platform becomes. And in terms of specific advantages, I mentioned one of them, which was the reduction of a handful of R&D vendors who they had been working with as a result of acquisitions in the past. That's one example, but even from the perspective of kind of, if we kind of zoom out in terms of IT.
Speaker Change: Italy discussed the overall.
Speaker Change #112: Reduction in expenses as a project back in.
Speaker Change: In the fourth quarter of last year.
Stephen A. Snyder: We have about, out of that 22 million, there are about 7 million, roughly, in annualized savings that directly relate to these IT and R&D capabilities. Again, the ability to leverage our team very effectively with regard to IT and R&D solutions. And as we're looking for cuts, we're looking to eliminate redundancies, both in terms of vendors and personnel. And in particular, we're highly focused on doing this in a way that doesn't impact clients. So we're looking specifically and strategically for cuts that are not client-facing and that also shouldn't have any impact in terms of near-term and long-term revenue generation.
Bill: We've identified $22 million roughly an annualized cost savings and if we kind of think about what our competitive advantage as a company has always been its really been the ability to to leverage kind of our cost efficient fully integrated team.
Speaker Change #101: One kind of a second <unk>.
R&D team: Sure part of that competitive advantage has been our technological capabilities. So our R&D team and then third has been our ability from an integration perspective too.
R&D team: To to integrate additional solutions that we're launching and also the context of growth to leverage those capabilities to fully integrate new clients both in organic growth and also historically and acquisitive growth.
Speaker Change: If we kind of if we kind of think about that those those kind of core competitive advantages as we really lean into those advantages frankly, the more related to those.
Speaker Change #107: More we're capable of reducing costs and candidly the stronger the company. The platform becomes in terms of specific advantages I had mentioned one of them, which was the reduction of.
Speaker Change #105: Handful of of R&D vendors, who had been working with.
Speaker Change #105: As a result of acquisitions in the past.
Liz Ferrer: That's one.
Speaker Change: As one example, but even from the perspective of category, if we kind of zoom out in terms of.
Speaker Change #105: We have about out of that $22 million or about $7 million roughly an annualized savings that directly related to this.
Speaker Change: And R&D capabilities again, the ability to leverage our team.
Speaker Change: Very effectively with regard to it.
Speaker Change #110: And R&D.
Liz Ferrer: Solution.
And as we're looking for cuts we're looking to eliminate redundancies, both in terms of vendors and personnel.
Speaker Change #106: And in particular, we're highly focused on doing this in a way that.
Speaker Change #106: Doesn't impact.
Speaker Change #108: Clients. So we're looking specifically in strategically for cuts that are not client facing.
Speaker Change: And that is and then also won't have any debt also shouldn't have any impact in terms of.
Speaker Change #111: Near term and long term revenue generation.
Speaker Change #108: Okay will you have additional.
William Sutherland: Okay, will you have additional restructuring or, yeah, one-time charges to realize the cost?
Liz Ferrer: Restructuring charge.
One time charges to realize the cost saves.
Speaker Change: Yes, good question.
Norman S. Roth: Yeah, good question. And, in turn, I'll hand the floor over to Norm to jump in on that. Thank you, Bill. So we're estimating about another 400,000 for the remainder of the year in restructuring charges.
Liz Ferrer: Sure.
Speaker Change: The floor over to norm to jump in on that thank you Bob.
We're estimating by another 400000 for the remainder of the year.
Liz Ferrer: Restructuring charges.
Liz Ferrer: Okay.
Speaker Change #108: Yeah.
Liz Ferrer:
Liz Ferrer: Yes.
William Sutherland: Yeah, I've been thinking about your revenue trajectory, and to what degree do you kind of see it in the sales pipeline at this point, since you're just launching these AI products?
Speaker Change: About the revenue trajectory.
Speaker Change: And to what degree do you kind of see it in the sales pipeline at this point since you're just launching this AI products.
Liz Ferrer: Greg.
Hadi Chowdhury: Right. So I think, Bill, you should look at it from the overall, I would say, new revenue or growth perspective. Well, let's look at it from the net new revenue perspective. We are doing much better so far this year when it comes to attrition, for example. Annualized attrition at this point is much better than what we did last year.
Speaker Change: Bill you should look at it from the overall.
Liz Ferrer: Overall, I would say the the amendment the.
Speaker Change: New revenue the growth perspective, let's look at on the net new revenue perspective.
Speaker Change: Doing much better so far into the year when it comes down to attrition as an example, our annualized attrition at this point is it's much better than what we did last year. So we are focusing extensively on making sure we retain basis existing revenue.
Hadi Chowdhury: So we are focusing extensively on making sure we retain the existing revenue. The second, in terms of the top line, revenue is we see an increase in revenue from a digital health standpoint. All the rest of the bookings for RCM and technology enabled, we just look at the first quarter this year compared to the first quarter last year, and that seems to be we are doing as good as we did last year or slightly better than that on the RCM and technology enabled side. So between the RCM, digital health, and improving on attrition, we see net new revenue growth into the upcoming quarters in addition to the initial seasonality effect in Q1.
Speaker Change: Second in terms of from the top line the revenue as we see the increase in the revenue from digital health standpoint.
Speaker Change: All the rest of the bookings for RCM and technology Enablers, we just look at the fourth quarter. This year compared to the first quarter last year. There seems to be we are doing as good as we did last year or slightly better than that on the on the RCM technology neighbors site. So between the RCM digital.
Liz Ferrer: Health and improving on on the attrition, we see the net the net new revenue growth into the upcoming quarters.
Liz Ferrer: In addition to the initial seasonality impact in Q1.
Speaker Change: So I guess youre, saying not as reliant as I thought on the new products and are you looking for the chronic care.
William Sutherland: So I guess you're saying not as reliant as I thought on the new products. And are you looking for chronic care and the other remote monitoring to correct the CCMR?
Speaker Change: The other.
Speaker Change: Remote monitoring.
Speaker Change: Correct PCMR P M will be which is our digital health solution.
Hadi Chowdhury: Correct. The CCM RPM will be, which is our digital health solution. There is revenue growth as the clients have continued to ramp up, and they are more in the onboarding process and going live in the upcoming quarters. So yes, there will be growth coming from there.
Speaker Change: <unk> revenue growth as the clients have continued continue to ramp up and they are more in the onboarding process ongoing life in the upcoming quarters. So yes, there will be a growth coming from their growth coming from RCM and the AI solution. If you think about it so one of the product which is since we are.
Hadi Chowdhury: The AI solution, if you think about it there, so one of the products which is, since we are still reliant on, which is our CIRAS AI guide on our partners, Google Cloud, and using their LLMs. And as we know that, more technically speaking, the AI hallucination needs to be reduced and significantly improved before we can put those in production with a price point. So we are working through those things. For this recently launched ambient AI technology solution, the CIRAS AI nodes, this technology seems to be pretty much more mature compared to this other one.
Speaker Change: We're still reliant on which is obviously the CIA guys on.
Speaker Change: Partners, who will cloud and using data elements and as we know that.
Speaker Change: More technically speaking the AI hallucination needs to be reviewed and significantly improved before we can put those in production with the price point. So we are again working through those two those things for this recently launched NBA AI technology solutions as <unk>.
Speaker Change: This technology seems to be pretty much more mature compared to this other one and that's why we believe once we are done with our initial pilot testing and optimization youre going to put a price tag to it.
Hadi Chowdhury: And that's why we believe once we are done with our initial pilot group testing and optimization, we're going to put a price tag on it, and then we'll share it over the next 30 days. So we do see some revenue coming out of these products towards the second half of the year. It's hard to predict at this point how much in terms of the dollar that's going to be, but you should think about it in terms of just the top line and our guidance, that it's part of the guidance. Right?
Speaker Change: Then we will share it over the next 30 days. So we do see some revenue coming out of these products towards the second half of the year, it's hard to predict at this point at how much in terms of the dollar that's going to be.
Liz Ferrer: That's the.
Speaker Change: You should think about it in terms of just the top line in our guidance that it's part of the guidance.
Liz Ferrer: Yes.
Speaker Change: Alright, and I know it's.
William Sutherland: Right, and I know it's a very competitive space now, the documentation side. Okay.
Speaker Change: Very competitive space now the documentation side, okay. Thanks, everybody.
Speaker Change: Thank you your next bill.
Speaker Change: Next is a follow up from Alan. Please. Please go ahead.
Allen Robert Klee: Next is a follow-up from Allen Klee. Please go ahead.
Liz Ferrer: Yes.
Allen Robert Klee: Yeah, just a couple of housekeeping questions about when the 10 Q might be filed and what your share count currently is. And then I had one follow up after that.
Liz Ferrer: Just a couple of them.
Liz Ferrer: Housekeeping.
Speaker Change: When the 10-Q might be filed and what your share count.
Speaker Change: Currently use and then I had one follow up after that thank you.
Speaker Change: Okay. Thank you also the 10-Q will be filed Tonight at 430.
Norman S. Roth: Thank you. So the PINQ will be filed tonight at 430, right after the market closes. And our current common share count right now is about 16.1 million shares outstanding.
Liz Ferrer: Right after the market close and.
Speaker Change: Our current our common share count right now is about.
Speaker Change: 16 point.
Liz Ferrer: 1 million shares outstanding.
Speaker Change: I'm, sorry could you say that again.
Norman S. Roth: I'm sorry, could you say that again? Okay.
Norman S. Roth: I'm sorry, we're going to file the 10-Q tonight, 4.30 after market close, and our common shares outstanding are $16.1 million.
Speaker Change: Okay, we're going to file the 10-Q Tonight and 430 after market close and our common shares outstanding at $16 1 million.
Liz Ferrer: Okay, and then one follow up question on the unsolicited offer.
Allen Robert Klee: Okay, and one follow-up question on the unsolicited offer. The third-party bank that was hired to evaluate it was to look at the offer, and you wrote in the press release to also make recommendations that that might be beneficial to yourselves. Is the way I read this that this means that they're have recommended that the terms of both of the preferred stocks should should be changed related to the redemption provisions?
Speaker Change: The third party banks that was hired to evaluate it was to look at the offer and you wrote in the press release.
Liz Ferrer: Also make recommendations.
Liz Ferrer: That might be beneficiary to yourselves.
Speaker Change: Is the way I read this that that means that there.
Liz Ferrer: That they recommended that the terms of.
Speaker Change: Both of the preferred stock should should be changed.
Liz Ferrer: Related to the redemption provisions.
Stephen A. Snyder: Good question, Allen. And we've just recently retained Citizens JMP, so they're just starting their work right now. But again, the core part of their focus is really on kind of the issues that you're alluding to, which is the Series A and the Series B, and really analyzing the certificate of designation in particular with regard to changes of control as it relates to Series A in particular. So we'll have to see what guidance they provide ultimately, but that'll be a core part of their overall focus.
Speaker Change: Good question Allen.
Speaker Change: And we've just recently retained citizens JMP, so they're just starting their work right now but again.
Speaker Change: A core part of their focus is really on kind of the issues that you're alluding to which is the series a and the series B and really analyzing the certificate of designation in particular with regards with regards to changes of control as it relates to series a in particular so.
Liz Ferrer: We'll have to see what what guidance they provide ultimately but that'll be a key.
Liz Ferrer: Core part of their overall focus.
Hadi Chowdhury: Thank you. On last quarter's call, I think you might have mentioned something about launching CareCloud Prime. Any update on that? Yes, and
Speaker Change: Thank you Juan.
Speaker Change: Last on last quarter's call I think you might have mentioned something about <unk>.
Liz Ferrer: Launching care cloud prime.
Liz Ferrer:
Liz Ferrer: Okay.
Liz Ferrer: Any update on that.
Hadi Chowdhury: Yes, Allen, we moved that into production, and we continue to onboard and transition more and more clients from our existing platform to this new platform. So that process continues.
Liz Ferrer: Yes.
Speaker Change: As we moved into production and we continue to onboard and transition more and more clients from over.
Speaker Change: Listing platforms.
Liz Ferrer: This new platform so that process continues.
Hadi Chowdhury: And any commentary on CareCloud Wellness?
Speaker Change: And any commentary on your cloud wellness.
Hadi Chowdhury: Right. So the wellness, as I mentioned, if you look at it from Q1 2023 to Q1 2024, the revenue, you can see that it has increased by almost four times. And we continue to see the momentum, and though it took us a little more time initially to ramp this thing up, now with more patients on board and more practices on board, we continue to see an increase in that revenue.
Speaker Change: So the awareness as I mentioned, if you look at it from the Q1 2023 to Q1 2020 for the revenue you can see that has increased by almost four times.
Speaker Change: And we continue to see the momentum in <unk>.
Speaker Change: No it took us a little more time initially due to ramp this thing up.
Speaker Change: But now with the more patient onboarding more practices onboard and we continue to see the increase in that revenue.
Speaker Change: Okay, and then finally with met US are you've mentioned.
Hadi Chowdhury: Okay, and then finally, with MedSR, you mentioned that you kind of think that revenue was a little sluggish in 1Q and probably stays at that level in 2Q. Last quarter, you talked a little about opportunities with Meditech. Any commentary on what opportunities might be there to improve this in the second half?
Norman S. Roth: But you kind of think that revenue will that it was a little sluggish in <unk> and probably stays at that level in <unk>.
Speaker Change: Last quarter, you talked a little about opportunities with Meditech.
Liz Ferrer: Okay.
Speaker Change: Any commentary on what opportunities might be there too.
Speaker Change: Prove this in the second half.
Liz Ferrer: Yes sure.
Hadi Chowdhury: Sure. So Bill, if you look at it there, basically, there's health system space-related project revenue, which is, as we know, the highest share is Epic, then it's a number of other players, but we work closely with Meditech, and then there is an RCM play. And then there could be different other staff, CIOs, and training and the like. So these are the major revenue drivers of MedSR. RCM, Last year, revenue was flat compared to 2022, but in 2022, we were able to increase the RCM revenue by roughly 300% compared to acquisition levels.
Hadi Chowdhury: All of you that saw the island, if you look at it they're basically there's a health system space related projects revenue, which is as we know the highest share is that baked then its a between number of other players, but we work closely with Mary Kay and then there is an RCM play and then they could be different or the staff of CIO.
Speaker Change: And then the training and the like so these are the major revenue drivers all automated.
Liz Ferrer: <unk>.
Liz Ferrer: Last year, the revenue was flat compared to the 2022 by 2022, and we were able to increase <unk> revenue by roughly 300% compared towards acquisition level. So I think we see either the same or some growth in the RCM related revenue Sumit Desai relationships.
Hadi Chowdhury: So I think we see either the same or some growth in the RCM-related revenue through MedSR relationships. Meditech or Epic, so first of all, with Epic, we don't do any large projects since the time they considered us to be in a competitive position.
Liz Ferrer: Meditech all the FX. So first of all with epic, we don't do any large projects.
Speaker Change: The timely they considered us to be and there will be in the competitive position. So there is a very small piece of the overall FX related projects, we could have done or metaphorical ever could've done compared to prior to the acquisition. The Meditech. We continue to work closely and revenue continuously go over.
Hadi Chowdhury: So this is a very small piece of the overall Epic-related projects we could have done or MedSR could have done compared to prior to the acquisition. So Meditech, we continue to work closely, and the revenue has continuously grown over the last two years on the Meditech side, but there is at the same time a dependency on Meditech's own growth for the year, how many sales they have made, how many projects they have implemented, because there's a direct correlation in terms of the growth from Meditech or Epic and the like. So I think we continue to believe it's going to be either Meditech or RCM or maybe some work from the Epic side that we have room for.
Speaker Change: The last two years on the Medicaid side, but there is at the same time a dependency on the mandate takes on growth for the year, how many sales they have made how many projects they have implemented because.
Speaker Change: There is a direct correlation in terms of the growth from the from the Meadowbank ore epic and delight.
Liz Ferrer: We continue to believe is going to be either the meditech or RCM or maybe some words from from from.
Liz Ferrer: From an <unk> site that we have.
Speaker Change: We have a room floor.
Stephen A. Snyder: And I will maybe, maybe just one...
Speaker Change: Hi, everyone.
Speaker Change: Sorry to interrupt I was going to say to <unk> point, maybe one thing to think about us.
Stephen A. Snyder: Sorry to interrupt. I was gonna say, you know, to Hani's point, maybe one thing to think about is... You know, especially on the NetSR side, of course, we're talking primarily about non-recurring project revenue. So in terms of the overall revenue mix, and as Norm alluded to, there's some softness in that. And while we see lots of exciting opportunities to really expand revenue, and especially in terms of the overall products, in terms of generative AI, we're excited about that.
Speaker Change: Especially on the <unk> side.
Speaker Change: Of course, we're talking primarily about nonrecurring project revenue so in terms of the overall revenue mix.
Liz Ferrer: <unk>.
Norman S. Roth: And as norm as norm alluded to there is there is some softness in that and while we see what we see lots of exciting opportunities to to really expand revenue and especially on the <unk>.
Liz Ferrer: Especially in terms of the overall products and services generative AI, we're excited about that.
Stephen A. Snyder: I think as a team, we're really focused this year primarily on generating cash flow. And that's kind of step one in our overall thought process, is how do we get to, you know, on an annualized basis, 20 million in free cash flow? How do we get to 21, 22?
Speaker Change: I think as a team we're really focus this year, primarily on generating cash flow and that's kind of kind of step one in our overall kind of thought process is how do we get to on an annualized basis $20 million in free cash flow, how do we get to 'twenty one.
Speaker Change: <unk> 22 house, how do we achieve that and then secondarily an important is an important aspect of that will be of course, expanding revenue and growing revenue, but I think as you think about and kind of watch us. This year, I think really test us and judge us in particular by our.
Stephen A. Snyder: How do we achieve that? And secondarily, an important aspect of that will be, of course, expanding revenue and growing revenue. But I think as you think about and kind of watch us this year, I think you should really test us and judge us in particular by our ability to generate free cash flow, primarily. And then, secondarily, really be thinking about the long-term ability to grow revenue. Revenue growth will come and will be a key part of our overall kind of what we bring to the market this year and the years to come. But I really think the emphasis should be on free cash flow. I think if you focus on free cash flow, that would be the place to focus.
Liz Ferrer: Ability to generate free cash flow.
Speaker Change: Primarily and then secondarily really be thinking about the long term ability to grow revenue revenue growth will come and will be a key part of key part of our overall kind of what we bring to the market in the in the in this year and the years to come but.
William Sutherland: That's helpful. I'll ask one more question.
Speaker Change: I really think the emphasis.
Liz Ferrer: I think if you focus on free cash flow that would be the place to focus.
Speaker Change: Got it that's helpful.
William Sutherland: Service Notes, which sounds pretty exciting. I'm trying to understand how that would be positioned in the market. Is my understanding that this is an all software solution that then gets approved by the clinician, the doctor? Does that mean that...
Speaker Change: I'll ask one more question.
Speaker Change: Service nodes.
Liz Ferrer: Which sounds pretty exciting.
Speaker Change: And I understand how that would be positioned in the market.
Speaker Change: Is my understanding that this is an all software solution that then gets approved bye bye.
Speaker Change: By the clinician the Doctor.
Liz Ferrer: Does that mean.
Hadi Chowdhury: Competitively, is this trying to go after, like, just the pure transcription users that are out there, the scribes, which is kind of the lower end of the ambient solutions, or is it somewhere else that you would say that it's focused within the choice? And oh, and just to follow up, does it create the note, like, instantly? Or is it, or is there a time delay, and someone has to look at it?
Liz Ferrer: This is Mike competitively is this trying to go after.
Speaker Change: Just your transcription users that are out there describes.
Speaker Change: Which is kind of at the lower end of the of the <unk>.
Speaker Change: AMD and solutions or or is it somewhere else.
Speaker Change: But you would say that its focus within the choices.
Liz Ferrer: And just a follow up.
Liz Ferrer: To note like like.
Speaker Change: Instantaneously or is it or is there a time delay and someone has to look at it.
Hadi Chowdhury: A good question, and I think you understand this competitive space very well. So our product basically, in a rare time, it listens to the patient, provider, and doctor conversations and converts that into a note instantaneously. And as we roll it out, it could be just a pure technology play where the doctors can use it and can edit the notes if they feel necessary and can save them as is. And in addition to that, it could be a technology plus resource play where our, let's say the doctors or our team members, they can look at it and can make the edits after listening to the recorded conversation as well.
Liz Ferrer: A good question Ed.
Liz Ferrer: And I think you understand this is a competitive space.
Speaker Change: Well so other parties basically.
Speaker Change: And the time it listens to their patients provided the doctor conversations and convert that into a node instantaneously.
Liz Ferrer: And as we will roll it out so it could be.
Speaker Change: Just a pure technology play where the doctors can use it and added the north if they really necessary and can save it.
Speaker Change: And in addition to that it could be a technology plus the resource play there.
Liz Ferrer: Let's see.
Speaker Change: The doctors or the other of our team members that you can look at it and can make the edits after listening to the recorded conversation as well. So it will be a technology plus a service play as we continue to roll this out and like any other product or our first target markets with existing client base, we would like to roll it out to all of them.
Hadi Chowdhury: So it will be a technology plus a service play as we continue to roll this out. And like any other product, our first target market is our existing client base. We would like to roll it out to all of our existing clients before going after the market for new sales.
Speaker Change: Existing client base before going after the market for for new sales.
Liz Ferrer: Okay, great. Thank you so much.
William Sutherland: Okay, great. Thank you so much.
Speaker Change: Perfect. Thank you.
Norman S. Roth: And at this time, Mr. Roth, we have no other questions registered. Please proceed.
Liz Ferrer: And at this time, Mr. Ross, we have no other questions registered please proceed.
Norman S. Roth: Yes, thank you everyone for attending the call. Have a great day.
Speaker Change: Yes. Thank you everyone for attending the call have a great day.
Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we ask that you please disconnect your lines.
Speaker Change: Thank you, Sir ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we ask that you. Please disconnect your lines.
Liz Ferrer: [music].
Liz Ferrer: Okay.
Liz Ferrer: [music].
Liz Ferrer: Yeah.
Liz Ferrer: Okay.