CareCloud (MTBC) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 13% year-over-year to $31.3 million, driven by expansion in AI, product portfolio, and acquisitions, with recurring revenue rising to 74% of total revenue.

• GAAP net income was $922,000, marking the eighth consecutive quarter of profitability, though down from $1.9 million last year due to acquisition-related and integration costs.

• Adjusted EBITDA was $5.4 million, slightly down from $5.6 million in Q1 2025; adjusted EPS remained steady at $0.05.

• Major capital structure simplification executed post-quarter with a $50 million credit facility, full redemption of Series B preferred stock, and elimination of preferred equity overhang.

• AI platform is fully commercialized, with stratusAI Desk Agent automating up to 75% of inbound calls and new AI products and agentic capabilities in development.

Financial highlights

• Q1 2026 revenue: $31.3 million, up from $27.6 million in Q1 2025.

• Recurring technology-enabled revenue rose to 74% of total, with non-recurring project-based revenue from Medsphere declining.

• GAAP operating income: $1 million; GAAP net income: $922,000, both lower year-over-year due to amortization and integration costs.

• Adjusted EBITDA: $5.4 million (17% margin), slightly down from $5.6 million last year.

• Free cash flow: $2.4 million, down from $3.6 million last year.

Outlook and guidance

• Reaffirmed 2026 guidance: revenue of $128–$132 million, adjusted EBITDA of $29–$31 million, GAAP EPS of $0.20–$0.23, representing a 100–130% increase over 2025 EPS.

• Margin improvement expected as integration costs decline and AI-driven efficiencies ramp up through 2026 and into 2027.

• Free cash flow expected to exceed $2 million per month on average in the back half of the year.

• Management expects sufficient liquidity for the next twelve months and plans to continue monthly preferred dividends.

• ATM equity facility established for opportunistic financing and growth investments.