By Michael Kim
NASDAQ:CCLD
READ THE FULL CCLD RESEARCH REPORT
Pre-market open on 3/12/26, CareCloud (NASDAQ:CCLD) reported 4Q25 earnings results. For the quarter, CCLD reported GAAP net income of $2.9 million, representing the company’s seventh consecutive positive net income quarter. After taking into consideration preferred stock dividends, the company reported net income attributable to common shareholders of $1.5 million, or $0.04 per share, for 4Q25 – CCLD’s third consecutive profitable quarter, inclusive of preferred stock dividend payments, and up from essentially breakeven, or $0.00 per share, for 4Q24. Much of the year-over-year variance can be attributed to a 22% step up in revenue, combined with meaningfully lower preferred stock dividends, partially offset by higher operating expense (skewed by an increase in amortization of purchased intangible assets and transaction/integration costs).
Excluding stock-based compensation expense, amortization of purchased intangible assets, other (income)/expense, transaction and integration costs, as well as preferred stock dividends, Adjusted EPS totaled $0.10 based on our calculations, or a penny shy of our $0.11 estimate. Relative to our model, higher-than-forecast operating expenses primarily drove the slight Adjusted EPS miss (Exhibits 1 and 2).
Focusing on the top line, CCLD generated $34.4 million of revenue during 4Q25, or 6% above our $32.5 million forecast, 22% higher relative to $28.2 million for the year-ago quarter. Total operating expenses of $31.3 million in 4Q25 were up 26% from the year-ago period, and came in 9% ahead of our $28.7 million forecast, with much of the unfavorable variance centered in higher direct operating costs, selling & marketing, R&D, and depreciation/amortization costs. Finally, Adjusted EBITDA totaled $7.7 million for 4Q25, up from $7.1 million in the year-ago quarter.
On a GAAP basis, our updated model calls net income attributable to common shareholders of $0.23 per share for 2026 (at the high end of management’s guidance range of $0.20 to $0.23) followed by $0.32 per share in 2027. Excluding stock-based compensation expense, amortization of purchased intangible assets, other (income)/expense, integration costs, transaction costs, goodwill impairment charges, changes in contingent considerations, and related tax impacts, as well as preferred stock dividends, we forecast Adjusted EPS of $0.46 for 2026 (versus our prior estimate of $0.44) and $0.54 for 2027. From a top line perspective, we forecast total revenues of $130.7 million in 2026 (within management’s $128 million to $132 million guidance range), followed by $143.7 million in 2027, as business development initiatives increasingly take hold and management captures incremental economics from existing customers via complementary services. Furthermore, senior executives provided 2026 Adjusted EBITDA guidance of $29 million to $31 million.
Turning to valuation, no change to $6.00 DCF-derived price target, representing meaningful upside potential from current levels. We continue to look for an upward revaluation for shares of CCLD, as awareness and appreciation of the company’s unique business model, durable competitive advantages, and reaccelerating growth prospects compound. Moreover, comparable Healthcare Information Services small-cap stocks continue to trade at meaningfully higher Price-to-Earnings multiples across the board, thereby reinforcing our valuation work.
We highlight the following key takeaways from 4Q25 results:
1. Increasingly leveraging a more robust/AI-centric services platform: Following the acquisition of Medsphere in August 2025, management remains focused on tapping into Medsphere’s existing inpatient EHR and RCM relationships across small- and mid-sized hospitals to complement and integrate with the company's AI-driven ambulatory, RCM, and analytics offerings. Indeed, CCLD recently agreed to provide comprehensive clinical supply chain solutions to Memorial Hospital in Marysville, Ohio. More specifically, Medsphere’s HealthLine platform enhances inventory management by upgrading tracking and visibility and heightens revenue capture through improved charge capture accuracy, while reallocating clinicians’ time/resources to patient care.
Similarly, the company recently announced Affinity Urgent Care, a multi-site urgent care services provider located in Houston, Texas, selected Wellsoft, Medsphere’s emergency department information system (EDIS). The agreement brings Wellsoft’s comprehensive clinical workflow engine to the high-growth urgent care market, thereby enhancing documentation, operating efficiencies, and revenue optimization. Furthermore, the Medsphere acquisition provides opportunities to more broadly cross-sell CareCloud’s legacy Electronic Health Record (EHR), Practice Management (PM), and Revenue Cycle Management services.
2. Accelerating capital management story: Senior officials remain focused on continuing to strengthen balance sheet. To be sure, management recently fully paid down the company’s $10 million credit facility through internally-generated cash flows. From a cash flow perspective, CCLD generated $20.5 million of cash flow from operations in 2025, up from $13.2 million in 2024. Looking ahead, our model calls for continued growth reflecting rising revenues and ongoing margin expansion. Beyond maintaining ample capacity to continue to reinvest for growth and capitalize on incremental M&A opportunities, the Board recently started paying double monthly dividends on the company’s 8.75% Series B Preferred Stock. As background, the Board temporarily suspended monthly dividend payments from November 2023 through December 2024 to improve cash flows and margins. In light of ongoing growth in recurring revenue, expanding margins, and rising cash flows over the last 12+ months, the decision was made to pay one regular monthly dividend along with one catch-up distribution each month starting in January 2026.
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