Q2 2025 CareCloud Inc Earnings Call
Ladies and gentlemen.
Greetings and welcome to the kloud second quarter, 2025 results conference call.
At this time, all participant lines are in the listen-only mode. A brief question and answer session will follow the formal presentation.
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Good morning, everyone. Welcome to carecloud second quarter 2025 conference call on today's call or Mammoth Hawk, our founder and executive chairman co-chief executive officer Stephen Schneider in hottie chadri. And Norman Roth are interim Chief Financial Officer in corporate 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 in section 21e of the Securities, Exchange Act of 1934 as amended.
All statements other than statements of historical fact made during this conference or 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 Inquisition
Forward-looking statements May sometimes be identified with words such as will may expect. Plan anticipate, approximately upcoming leave estimate or similar, similar terminology and the negatives of these terms.
forward-looking statements are not promises or guarantees of future performance in our 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 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 in 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 second quarter 2025 earnings presentation.
Investor relations site, IRC carecloud.com click on news and events. Then click IRC calendar.
Click on second quarter, 2025 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 second quarter results and 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 co-ceo. Steven Schneider Stephen.
Thank you, Kristen and good morning everyone.
I appreciate you joining us today. For care, Cloud's second quarter, 2025 earnings call.
I'm very pleased to report another strong quarter for care cloud.
1 that reflects not just Financial stability, but meaningful, strategic progress across the core pillars of our business. Namely AI driven Innovation operational, discipline and sustainable growth.
These results are a continuation of the transformation we initiated in 2024, and they highlight our ability to execute in the dynamic and evolving Healthcare environment.
Let me start with the financials.
We achieved gaap net income of 2.9 Million.
An improvement of 73% from 1.7 million in the same period last year.
And this was in spite of a modest year-over-year Revenue decline driven largely by a 1-time, non-recurring revenue item in Q2 2024 importantly, this quarter marks the first time in care Cloud's history that we've delivered positive Gap, earnings per share at 4 cents compared to a loss of 14 cents per share into 22 of 2024.
This is a remarkable accomplishment and 1 that we're proud of.
Reporting our first positive, EPS as a public company. Again, as a major Milestone and a clear demonstration of the traction behind our strategy.
Your date, we've generated 4.9 million in gaap, net income, more than triple the amount. We reported in the first half of 2024
Adjusted ibida stands at 12.1 million dollars, a 20% increase year-over-year and free cash flow. Reached 9 million.
Up 85%, over the same period.
These metrics underscore the scalability and efficiency of our operating model and provide us the flexibility to reinvest in growth.
Base our performance. We are pleased to reaffirm our full year 2025 guidance.
We continue to expect revenue between $111 million and $114 million, adjusted EBITDA in the range of $26 million to $28 million, and GAAP earnings per share between $0.10 and $0.13.
As the tech innovation.
Our AI Center of Excellence is operational and is beginning to deliver measurable results. While we continue to ramp up and broaden the team.
We are actively using AI to enhance the provider and the PA and patient experience on the front end while we're also applying it quietly on the back end to meaningfully improve, our internal operations and cost structure.
Across our back office and Service delivery teams, we have deployed AI, powered automation, to reduce manual, work accelerate turnaround times and eliminate redundancies.
For example, we're leveraging machine, learning models to streamline claims coding for adjudicate denials and prioritize accounts receivable workflows.
These tools are enabling our team to more efficiently. Manage higher volumes with lower with fewer resources, driving productivity gains.
We're also using generative AI internally to support functions like denial management.
Audit threat and revenue forecasting.
In the past these areas required intensive, manual review and lengthy cross-functional coordination. Now, with AI enhanced workflows, we're able to move quickly, reduce error rates and focus, our team on higher value, strategic work.
As we move forward, we'll continue to embed intelligence deeper into our infrastructure. So we can grow faster, serve clients better, and deliver stronger returns for our shareholders.
For advancing our 2025 product roadmap and gaining traction with Cirrus, AI Notes, and Cirrus AI Voice Solutions, purpose-built to improve documentation accuracy, reduce provider burden, and enhance the patient experience. These aren't just incremental tools.
They represent the foundation of a broader platform strategy to embed intelligence into every layer of the Care delivery process.
We've also remained committed to financial discipline and shareholder alignment.
Since resuming preferred dividend payments, we've declared 9 consecutive months of distributions all funded entirely from our free cash flow.
That consistency reflects our operational strengths and capital stewardship.
On the m&a front, we've returned to a more active posture.
We've completed 2 acquisitions.
This year each aligned with our focus on specialty, AI powered RCM. These tuck-ins.
Reflect the kind of disciplined accretive m&a that has historically been a core part of our growth strategy and with a strong balance sheet and a scalable platform. We are well positioned to continue to actively evaluate additional opportunities.
In summary, this quarter marks a pivotal moment for carecloud.
We are delivering profitability at scale. Launching differentiated AI capabilities and reigniting. Our acquisition engine all while maintaining a lean Capital, efficient model, we're executing executing from a position of strength and building a platform that we believe will lead the next wave of intelligent Healthcare delivery.
With that, I'll now turn the floor over to hottie hottie.
Thank you, Steve. And thank you everyone for joining us.
as Steve mentioned, AI is already reshaping how we operate, and I and I am excited to take that conversation at a level deeper
This morning, I will focus exclusively on the work we have done to bring AI from concept to execution across care cloud.
Over the past few quarters, we have gone from planning to production, embedding AI into real-world workflows that are improving efficiency, driving smarter decisions, and enhancing the experience for both providers and patients.
And while the momentum around our AI products continues to build today's calls Mark and important inflection point. Not only in how we scale those Innovations but also in how we expand our platform into entirely new market segments,
I will begin with an update on AI progress and later I will share significant step. We have taken to bring our intelligent cloud-based platform to a critical part of a healthcare ecosystem that has long been underserved.
To ensure this AI transformation. We launched our AI Center of Excellence earlier this year, and I'm pleased to share that it's now fully operational.
We have hired. 100 full-time AI professionals, including machine learning Engineers data scientists and NLP Specialists alongside them. We have onboarded another 100 interns. Many of them are already being evaluated for full-time roles. This structure gives us the scale and flexibility to move quickly while continuously investing in talent and Innovation importantly,
We are taking a pragmatic and strategic approach to AI development.
We appropriate The Leverage, 25 years of proprietary, clinical and financial data to train purpose-built models, tailored for Health Care. At the same time. We are also integrating Market available foundational models.
That they accelerate time to Value such as transcription, summarization and conversational AI.
This hybrid approach allows us to maintain control where it matters most while benefiting from Innovation, across the ecosystem.
The result is a growing set of production grade Solutions, delivered at scale without compromising, performance security, or clinical relevance. This Center isn't just a hub for Innovation, it's an execution engine, powering the next generation of care, cloud, products, and capabilities.
AI nodes. And seriously, I voice continued to gain traction and anchor, our broader intelligent platform strategy,
Notes is a fully integrated documentation assistant, that reduces provider workload and improves note quality.
It uses ambient listening, smart, summarization and Specialty, specific logic to streamline documentation directly within the EHR.
Since our last earnings call the number of providers. Using CCI nodes has more than doubled. We have continued to expand specialty support, refined natural, language capabilities and improve, real time usability while Revenue contribution is still early. This product is delivering significant strategic value. Enhancing provider satisfaction increasing platforms, stickiness and differentiating. Our offering in an increasingly crowded PHR Market.
This AI voice is our AI powered call center monitoring and auditing platform. It analyzes 100% of calls scores each agent's performance against kpis and uses sentiment analysis to surface, coaching opportunities, and quality issues in real time.
This quarter, we deployed CCI voice internally across hundreds of our employees to improve call Center Performance. We have also launched it with 1 of our Enterprise clients.
Where it's currently undergoing performance evaluation as part of their phased rollout.
Early feedback has been very encouraging.
Together CSI notes and voice are foundational to our AI road map. Built not as Standalone tools, but as a part of a connected intelligent, ecosystems spanning both clinical and operational workflows
We actively deploying AI to improve internal operations and scale more efficiently in revenue cycle and denial management machine learning and generative. AI are streamlining claim coding appeal, generation and our prioritization reducing manual work and accelerating turnaround times. We are also piloting AI tools for forecasting to support faster data-id decisions.
These early. Deployments are already delivering clear productivity gains and operational Leverage.
Now looking ahead to Q3, we are actively working on a broad set of AI initiatives across the organization.
Among them. Here are few key projects that illustrate how we are continuing to push the boundaries of intelligent Automation and patient engagement.
The first 1 is an AI front desk agent.
We are piloting. A conversational AI agent capable of handling inbound calls without human intervention. It performs front office tasks like appointment, scheduling prescription refills, lab results, updates and general inquiries with the human life voice experience.
This will help reduce call volumes and improve service responsiveness.
The number number 2.
AI enabled. Personal health record a PHR. We are building an AI powered PHR. That allows patients to interact with their health data using natural language through both text and voice. A key feature is an AI Voice Assistant. That conducts, adaptive pre-visit interviews asking context aware questions to complete intake. Assesses, the patient's condition and pre-populate clinical notes, saving time for providers and improving, visit quality.
Additional capabilities. Include smart scheduling chart summarization and proactive care. Prompts all aimed at making Healthcare more, personalized accessible and actionable.
Number 3, enhanced AI denial management. We are expanding. Our AI power denial management capabilities. With deeper use of generative AI to automate appeals, classify root causes and surface. Fear Trends, helping clients recover, Revenue, faster, and reduce future denials,
These projects, reflect our commitment to delivering real world, AI that improves experience, efficiency and outcomes across the care. Continuum
Underserved and critically important segment of the Health Care system.
Our CA certified platform is cloud-based AI enabled and designed to support inpatient, outpatient and swing bed, work flows, delivering the same operational, efficiency, and Regulatory Compliance. We are known for it in the ambulatory space.
This Milestone opens access over 1.5 billion. Aggress addressable market across more than 1300 rural hospitals. Many of which are actively seeking modern replacement for outdated high maintenance systems.
It also reinforces our broader strategy of supporting the full Continuum of Care from independent practices to rural in inpatient facilities through a unified intelligent platform.
To summarize. We are executing with focus and discipline across every layer of our AI strategy from client facing Innovation to internal automation. We are embedding intelligence into the core of our platform, delivering measurable improvements and experience efficiency and scalability. We have built the internal infrastructure expanded into new markets.
And actively developing Next Generation capabilities that will further differentiate care cloud in the quarters ahead.
Our entry into the inpatient Market, reinforces our commitment to serving the full, Continuum of Care and our conviction that AI can and should power meaningful practical improvements in our Healthcare is delivered. In managed, we believe we are still in the early inning of AI and Healthcare, but with the foundation we have built, we are well, positioned to lead. Thank you again for your time and continued support. I will now turn the call over to our intm CFO and controller Norm Rod Norm.
Thank you, Heidi, and thanks everyone for joining our call. Today, we delivered a strong quarter reflecting the strength of our business model and the disciplined execution of our strategic priorities.
Positive earnings per share and strong cash flow underscore, our continued, operational efficiency, and Financial Health.
During the 6 months and the June 30th 2025, we generated 12.5 million dollars of cash from operations, and 9 million dollars of free cash flow. We're proud of this accomplishment.
In the second quarter, we reported revenues of 27.4 million.
While down approximately 700,000 year-over-year to, the client was due to a 1-time non-recurring revenue item in Q2 2024.
Care cloud Wellness, generated approximately $1 million in revenue for the quarter and approximately 1.8 million for the first 6 months of this year.
Our direct operating costs continue to decline and they are down to approximately $70,060 from Q2 2024.
our operating expenses, including GNA R&D,
And sales and marketing expenses decreased by approximately 1.4 million.
In the second quarter, we reported positive Gap. Operating income of 3 million and gaap net income of 2.9 Million. This compares to gaap, operating income of 2.3 million, and gaap. Net income of 1.7 million during Q2 2024 the gaap. Net income per share was 4 cents, based on the net income attributable, to Common shareholders, which takes into account. The preferred stock dividends.
Non-gaap adjusted net income. For the second quarter, 2025 was 3.3 million or 7 cents per share calculated, using the end of period. Common shares outstanding
We reported adjusted ibida of 6.5 million. In the second quarter compared to 6.4 million in the same period last year.
revenue for the first 6 months of 2025, was 55 million compared to 54.1% in 2024,
for the first 6 months of 2025, the company's gaap. Net income was 4.9 million compared to a gaap, net, income of 1.4 million for 2024.
This equates to income of 2 cents per share. After subtracting the preferred stock dividends non-gaap adjusted. The net income for the first half of 2025 was 5.6 million or 13 cents per share.
In the same period last year.
As of June 30th 2025 the company had approximately 10.4 million of cash. Networking Capital was approximately 14.9 million
This performance gives us confidence as we enter the second half of the year.
We remain focused on profitability and cash flow and delivering long-term shareholder value. We look forward to updating you later in the year.
With that, I'll now turn the call over to Mahmud for his closing remarks Amud.
Thank, you know, I want to take a moment to sincerely. Thank our employees clients and shareholders for their continued. Trust and support this quarter marks. A significant milestone for carecloud, not only have we delivered our first ever, positive Gap earning per share since our IPO, but we have done. So while continuing to invest in the future,
As we look ahead, we remain committed to thoughtful execution, sustainable growth and delivering long-term value, for all our stakeholders operator. Please open the line for questions.
Thank you, ladies and gentlemen, we will now begin the question and answer session.
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Ladies and gentlemen, we will wait for a moment while we pull for questions.
The first question comes from Alan. Clay with Maxim group, please go ahead.
Yes. Hi uh great quarter um for cash flow really standing out. Um I wanted to touch on your AI center of excellence and
And the opportunities you're creating their could could you.
How how do you think about kind of?
The spin that you'll have and how you thinking about that relative to the um potential Revenue. Generating opportunities. Thank you.
Uh, good morning, Ellen. Uh uh, thank you for for joining and and for your question. Uh, so as, as as we mentioned, or the way we are trying to focus on it is 3, 4 1 is the the Top Line, uh, which is we can bring in, uh, to the market, uh, some products which can generate some incremental revenue, and the second part is making the products more comparative and AI enabled, which is a, which is an evolution. The whole industry is is going through like if it's an EHR, uh, they are 100 different ways. We can optimize how the things can operate in the, in the Next Generation with the help of an AI, whether it's the, uh, summarization of charts, whether it is the recommendations, whether it is the, uh, sorting out with the help of AI, all the different incoming documents and suggesting and recommending. The next procedures, uh, suggesting to the doctor as an example, the different, uh, the next prevent screening, uh, for example,
And as I mentioned in our, in our call earlier uh the uh for example, the AI agent, which can intercept the call and instead of human being, who is taking the answering the call, a simple question, such as appointment scheduling cancellations and the like, so many of the things are some of those would be where we can have an incremental Revenue otherwise making the product more competitive in the market. And the third 1 is our back office uh optimization uh the Sim the menu.
Any task that we were doing manually today or in the process of being converted into into an automated way or with the help of an AI, there are less, and less human resources needed to perform the same task or we can perform the same task with much more uh more efficiency. So I think the benefit is going to come in all these 3 areas. Not just 1 1 is the revenue driver the product being more but eventually will result into a more Revenue better sale and positioning in the market and third 1 is helping us improve the margins uh with the help of an AI.
I hope that answers the question.
Yes. Uh,
Products, you've talked about critical access hospitals and then some specialized, um, EHR. Um,
Maybe uh, can you talk about how how you're approaching the the it sounds like you're reaching out to to new potential customers how how you're thinking about the, um, the the sales approach to to try to, uh, win the business with your new offerings?
Sure. Uh
If you think about it, some of these Specialties such as Dermatology. Let's take that. As an example, we have many clients who are using today, care cloud services, when it comes to RCM and practice management and the like, but they may be using some other industry specific EHR. Those players may have been in the industry focusing on those specific specialty areas for for decades. Uh, even though we are providing the services by integrating those systems into into our into our platform, that's where 1 of the areas, where we see a true opportunity, where the full end-to-end solution can can offer much better outcomes, compared to an integrated integrated versions. And in many cases, those ehrs are or those other platforms, still lack the capabilities. The the next generation of capabilities of AI, uh,
And the like so that's 1 of the area where we see the uh see the opportunity. Uh and I think you can uh, I'm sure you have.
Things to add here.
Absolutely. Yeah. Thanks hardi and Alan. Thanks for the question. So if we focus in particular in terms of the the EHR for the inpatient space, our focus is primarily strategically on the critical access Hospital space, where there are 1300 roughly uh critical access hospitals across the United States.
And um, if we kind of step back, even further and think about the inpatient Hospital space from an EHR perspective, there's a very small Universe of vendors who are focused in on this space and have the the technological capability to develop a end-to-end solution. Um, and there's even a smaller number that have not only the technological capability. Develop an end-to-end solution from a clinical perspective, but also have a, a long track record of meeting the needs of hospitals and independent practices from a revenue cycle, mazur perspective. So we're excited about this. This is, this is a pretty huge milestone, uh, in terms of our overall ability to, um, to penetrate this market and to reach out to this Market. Um, and over
The next quarter, we're we're excited to share some additional information, um, and some additional updates, um, as we, uh, as we move forward.
Thank you. I I'll ask 1 more question and then I'll jump back in the queue for what?
Excuse me.
Could you just comment on how? Um,
Meds are remote. Patient monitoring and chronic Care Management performance.
For sure. So if we step back for a minute Alan and we think about the year overall, what our strategic Focus has been? It's really been. There have been 4 key things. First of all, to gain the leading, the Leading Edge in the AI space within the healthcare it market. We've already spoken about that. Secondly, would be to stabilize overall revenue and we're excited to again report that year-to-date Revenue uh has increased
Third, it's been to further expand margins. And as we think about the margins, and we think about most specifically, the the most recent quarter, of course, represents the first time in our company history where we've been able to report positive, net, earnings. So we've taken the momentum from last year and we've continued that momentum into this year and then the final thing would be to really focus on reigniting.
Expect Revenue this year to be uh roughly equal to what it was last year. Obviously, there's there's there's still time, there's still wins to be made but but we're striving to uh, to achieve that likewise from an RPM perspective. Um, RPM is an exciting addition to the overall Revenue mix, but as we've spoken about in the past, we still anticipate that the overall uh Revenue mix will continue to be about 5% or less from RPM and and that's about what where we're tracking today.
Thank you very much.
Thank you.
Thank you.
We have our next question from Michael Kim, with Zach's, small group, small, small cap research. Please go ahead.
Everyone. Good morning and, and thanks for taking my questions. Um,
First, maybe just to follow up on.
Seemingly seems like you guys are targeting more, specialized practices, and being able to, to come to Market with a fully integrated end-to-end solution. So just wondering where you might be seeing incremental opportunities going forward as as you sort of uh look out into the future.
Certainly that thanks Michael for the question. Um certainly from from the perspective of overall growth, our Focus continues to be on upselling, the existing Revenue base, so delivering value and meeting. The needs of our existing client base. I'm looking for other opportunities, whether it be RPM or other opportunities from an upselling perspective. Um, together with the net new types of opportunities, that that you referenced that are more specialty specific ehrs and the like, um, and this, and as we lean further into the, um, in particular the, uh, ambulance rather the inpatient space. Um, we're excited about having a brand new market that we can unlock, especially the smaller Health Care Facilities, the critical access hospitals and those that are generally speaking 25, beds or less, uh, together with a life-size opportunities we've spoken about before. So,
We really see again, when we look at this year, looking at those kind of 4, key objectives. Um, we're pleased to to see that at least along the, at least along all these 4, key objectives. We're really tracking. Well,
Thanks. Um, and then just in terms of m&a, just wondering what you're seeing from a competitive standpoint and then, probably, you talked about the, the the strengthening balance sheet. But just curious how you're thinking about capacity from, uh, from a funding perspective. Thanks,
From a competitive perspective in the m&a space again we're seeing a very active environment when it comes to healthcare, it and revenue cycle management opportunities. So, as we've discussed in the past, it it's our beliefs that over the last year and a half, um, the overall valuations in this, in the space of normalized, and they've normalized to something close to the evaluations that, um, that we're experienced preco, so that really unlocks other actionable opportunities for us here in the revenue cycle management, inquisitive space together with the broader Health Care, it space. Um, we're also seeing some distressed companies and core and non-core assets of companies come to Market. And um, in many of these cases, we really see an opportunity to take our operating model scale and Healthcare it capabilities and to unlock.
Um, very meaningful value Within These companies. Um, you also asked about it from a funding perspective and from a funding perspective.
We're continuing to approach. All these inquisitive opportunities with discipline,
Uh will drive uh further Roi. Um so broadly speaking, we're pursuing these strategic Acquisitions that are financially, accretive operationally synergistic and also aligned with our long-term growth objectives.
Um, including the opportunity to be able to deploy our AI technology. Uh,
ladies and gentlemen, the line for the speaker has got disconnected request you to stay only in while we get him connected. Thank you.
Hey Mike, uh the the Steve is dialing back on.
Just a moment.
Ladies and gentlemen.
We've got the management back. Please go ahead.
See, we cannot hear you.
Okay. Okay, I guess he's he's got disconnected again. I'll try to connect him. Please stay on the line.
Upgrader.
Okay, uh, while we are waiting for, uh, for Steve. Uh, sorry about that. Sorry about that everyone, my apologies. Uh, a little bit of a of an issue here with, uh, the the phone lines. Um, so, so when I dropped off there, my apologies Michael, I was just talking about the overall,
Strategy associated with um these opportunities that we're pursuing in the inquisitive space. Uh I can't believe it was almost done, I was just going to mention and then I I can ask then then feel free to ask any follow-up questions. I was going to mention 1 of those acquisition that we've already spoken about some and that's the revenue Med acquisition. I think that probably is a good acquisition to think about as a good reference point for, um, those opportunities that are, um, particularly attractive and fit, well, within our model, um, you'll recall that, uh, Revenue Med is focused on the hearing Health space and gave us the opportunity to acquire a business that not only um, added the existing client base but also gave us the opportunity to expand
The scope of our existing Solutions, into a new into a new sub subsection of the market. Um, and and that's that, that particular transaction. You may recall involved, no money down, 100% of the purchase price is based on the revenue generated, um, over time. So again, it's the type of of, uh, of tuck in that really fits well, um, low customer acquisition cost.
The meeting of our immediate client base and a platform that we can enhance using our broader technological and AI capabilities. Um, if you think about this, this represents not only...
Able to move forward on in terms of organic growth. So if you think about it, from the perspective of this particular acquisition, just as an example, I'll share a couple things that have happened with regard to revenue Med. Um, the largest customer in Revenue Med, we've been able to meet their needs, um, and, uh, I think candidly, I believe exceed the their expectations and they've taken the 1 year contract that we started with and have expanded that to a 3 year agreement. So we believe that a real validation of the success um, of this approach, we've also been able to expand um the overall reach deeper into the Audiology and hearing Health Market. So every acquisition of course is different but this 1 represents um a really good.
Story for um you to think about in terms of what the overall acquisitive strategy is able to accomplish for us. Um, and Michael, do you have any other questions that would uh, be along the lines either of Acquisitions or anything else related?
No, that was uh, very helpful appreciate uh, the color there. So thanks for taking my questions.
Absolutely, thank you.
Thank you. We have a follow-up question from Alan. Clay with Maxim group, please go ahead.
Yes. Hi, it's Claire, you know.
With your free cash flow generation, it creates a lot of optionality. And and positives that um,
You can go after. Um, so so I think that's very bullish for your outlook. Um getting into your outlook. I did, I just wanted to touch base a little any, any commentary on?
These analytics for 3 q and 4 q. And then, um,
It seems like using your AI internally could help with margins, and maybe that can offset.
that, along with maybe some of the new revenue contributions, could offset any of the new costs related to
People you're hiring at the AI data center, uh Center of Excellence is that the way to think about it or or what color could you provide? Thank you.
A good question, Alan and I'll let uh, Norm jump in here and provide some some additional detail. But what we think that is the right way to look at it. First of all, we'll start start with your the second part of your question, from an AI perspective.
our, our focus is really on building, this AI center of excellence, in such a way that we
Are hoping to really remain and cement our role on the Leading Edge of healthcare. It um AI. Um having having said that again it's this is our own internal investment and when we think about free cash flow, we anticipate that free cash flow this year, um, you know, absent additional Acquisitions and things along those lines. We anticipate the free cash flow this year, um, will meet or exceed, our free cash flow last year, in spite of all the additional investment. And at the same time that positions us very well, from an organic growth perspective and also from an inquisitive growth perspective from an acquisition, I mentioned that just because of the fact that that is a theme that we hear consistently when we're talking to sellers, um, their realization that the market is fundamentally changing, and the understanding that they have that
It's essential to either leverage their own AI technology or to partner with someone like us, who can help them unlock that um that that AI functionality on behalf of their their clients and on behalf of their, their own company on the back end in terms of reducing costs and and streamlining overall operations. So, that's the second part. And Ellen, the first part of your question was, what again?
just thinking about seasonality of, um,
Revenue's in the second half and and and expenses.
We're at today again. Um uh, notwithstanding any any additional changes on the like but over to Norm,
Uh, thank you Stephen. Thanks Alan. So yeah, I I think, you know, as we ramp up the uh AI inter of Excellence, you know that is all going to be funded from internal cash flow.
Um, you know, which is strongly expected to, you know, increase. You know, as far as seasonality, Allen, I would say if you looked at Q3 and Q4 of last year, it really isn't. I I I would expect this year's Q3 and Q4, Tamir. Last year, last last year, with Steve said, some modest increases. Um, you know, Q1 Q2 has, you know, been strong. So I I would expect that trend to continue.
That's great. Thank you. Um,
uh, in
Yes sir. Please go ahead.
I'm sorry, I think that's
It in terms of capitalized software. What? What is that focused on?
So, the cap software is basically, right now improvements to our existing Platforms, in the packages that we have, you know, we're always putting in, you know, modifications and just making it, you know, more AI. Um,
You know, more AI focused. So, as we're um, making these updates, you know, Gap allows us to capitalize that. And uh, then we advertised it over a short period.
That's great. Thank you. Um,
and then with just just in general like when when you're talking to customers and and you're having
A lot more to offer with with, um, all these enhancements you're doing with AI. How? How just, how how
Some comments on how those conversations are going, because it sounds like you have a lot more to offer to your customers.
Yeah sure. So uh
I think for us, the advantage is since they are using our existing platform. So, our internal marketing strategy, or sales strategy, starts with showing them the right communication in the right places, through splash screens, as an example. Uh, if I share with you some of the numbers that, uh, for CSII notes, as an example, the clients that are signing up for the initial trial period, we have seen over 75% adoption or continuation.
After the, the, the trial period ends. Uh, so all very good feedbacks. And even though this 25% is, is there which are not continuing, most of that was in the initial phase, where we see an opportunity that this number should even be higher than the 75%. Uh, so I think we see the, the more and more, uh, more and more traction towards AI as the clients are also hearing from Left Right sideways, the AI into the healthcare, uh, but then when they get an opportunity to at least test it out the overwhelming, majority undertakes it or or accepts it or try to use it and continue to, uh, to use it. Uh, there are other small pieces, like similar. You can give them the, the flavor of AI of summarization of the charge. As an example, very rudimentary AI feature, so clients, see as as they start to, to use it. Uh, the the adaption is increasing and it's all, it's all positive at the moment.
That's great. Okay, thank you so much, and congrats.
Thank you.
Thank you.
Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Norman Roth the CFO for the closing comments.
Thank you everyone, for joining our call today. Hope you have a great day.
Thanks again. Bye. Bye now
Thank you, sir. Ladies and gentlemen the conference of carecloud has now concluded, thank you for your participation. You may now disconnect your lines.