CareCloud, Inc. (CCLD) Earnings Call Transcript & Summary

Well, I think we're going to get started. [Operator Instructions] I would now like to turn the floor over to Bill Korn, CEO of CareCloud. Bill, I'm going to have you take it away, tell your story and we will answer questions at the end. Thank you.

Hi, everyone. I'm Bill Korn, CFO actually, not CEO, CFO of CareCloud. We're a health care technology company. And I appreciate everybody taking some time to listen to us today. So CareCloud was started about 22 years ago by Mahmud Haq. Mahmud was an American Express executive. He had set up another business, done a roll up, taking it public, had it bought and was then trying to think about how to solve problems for his wife's medical practice. You see his wife standing there next to him as we were ringing the NASDAQ bell 9 years ago when the company went public. His wife is an internist and Mahmud started the company originally called Medical Transcription Billing Corporation as a way to meet the needs of her practice. And today, and I'll tell you more about the company. But today, we have 3 classes of stock that trade on NASDAQ. And after we talk about the company, you can think about what makes sense for you. Our common stock is a class of shares that would probably be great for investors who are looking for growth. And we have 2 classes of nonconvertible preferred, 1 of which I'd say is ideal for people who are looking for solid monthly income. So let's talk more about the company, and then we'll come back to our stock. So as I mentioned, we were started 22 years ago. We've been public for 9 years. We've had over a 30% compound annual growth rate since our IPO. A lot of that growth was through M&A. More recently, we've invested in organic sales and marketing, which is fueling some additional growth. In 2022, there was a pause in the M&A activity, not because we weren't interested but because we really didn't find deals that were attractively priced, and I'll talk about what we look for in acquisitions as we go forward. Also in 2022, there were 2 large health system clients that had come to us through an acquisition in 2020. Each of those health systems had actually been acquired long before we started servicing them. And as luck would have it, both of them actually completed migration to their acquirer systems in mid last year. So that kind of put a little bit of a lull in 2022's growth rate. But nonetheless, if you took those 2 clients out of both 2021 and 2022, we would have seen 7% organic growth in 2022, which is probably better than the average in the industry. So if you think about our client base, I mentioned that our founder's wife was client, #1 her office is a couple of miles from a headquarters, so she and her staff get to test out new products all the time. Today, roughly 25% of our revenue comes from small medical practices, so the -- what I'll call the 1, 2 to 5 doctor practices. There's about 50% of our revenue coming from large position groups that could be 10 doctors. It could be as high as 2,700 physical therapists. So it's pretty large-sized groups. About 20% of our revenue comes from hospitals and health systems, and that's an area where we've increased our focus over the last year or 2. And we've also got some revenue coming through deals with industry partners. When you think about the services we provide, think about what are the things that a doctor is looking for and will help them meet their needs. And fundamentally, doctors go to med school so they could focus on patients and helping the patients to live healthy and solve their medical issues. And the last thing that a doctor wants to take care of is sending the bills to insurance following up to make sure it gets paid, making sure they've got HIPAA compliant software. So our notion is that we want to take care of all that so the doctors can really focus on the practice of medicine. That's why they're really in practice. And so I'd say fundamentally for most practices, that starts with what we call technology-enabled revenue cycle management, essentially sending those bills into insurance, doing it in an automated fashion and making sure that we know what's necessary to get the bill paid so that 95% or more of them can get paid automatically with no human intervention. But then having the team that can handle that 5% because if you don't follow up with insurance, I hate to say it, but sometimes they're going to look for any excuse not to pay a bill and getting those bills paid for our clients is fundamental and that's one of the things that we specialize in doing. So we've got a large team offshore, and I'll talk about the offshore operations that focuses on following up with Medicare, following up with private insurance, Medicaid, whatever. In addition to the revenue cycle management, One of the key things that doctors are looking for is software to run their practice. So that includes electronic health records. You've all seen doctors taking notes, whether it's on their PC or if they're using one of our systems, It could be on their iPad or we focus on how to make it easy for the docs to take their notes. We've got a couple of certified EHR systems, one that was developed internally that was designed for those smaller practices, again, like our original doctor who's client #1. We also have -- and that's cloud-based, again, developed internally. When we bought a company whose name we took CareCloud, so we bought this company in the beginning of 2020. They also had cloud-based software, but they took a little bit different approach. They kind of focused on all the bells and whistles that are needed by a larger practice, and we've now got essentially a pro version and a light version that are available, whichever is more usable for that particular practice, we've got it both and they interoperate. We've got the practice management system that's used to schedule appointments, check on insurance eligibility. We have the patient experience software. So again, the patient can log in, request a refill, set up an appointment, look at the notes from the last visit. In addition, we do things like staff augmentation, professional services. So one hospital acquires another and wants to integrate the systems, we have the team that can do that. We're even managing several medical practices that came through an acquisition about 5 years ago, where we actually run the practices, employed the nurses, receptionists, et cetera. The newest offering that we have, CareCloud Wellness, we think, is pretty exciting. And think about how the practice of medicine has changed just over the last couple of years. 2019 and before, when you thought about a visit with a doctor, you thought about going to their office in person. And we actually added telemedicine to our platform in 2019, and our original thought was that we were going to set up a service more like Teladoc, letting the existing group of doctors be able to provide remote visits to patients that could be geographically distant, could even be in another country. And we were working on getting that software all set up as 2020 started. And of course, COVID hit. So you think about how the world pivoted to telemedicine. For our docs, it was pretty interesting because we could tell them you've already got telemedicine software, it's HIPAA compliant, it's integrated with your EHR, it's available on your app, it's available on the patient portal and you can use it. And by the way, just like we do with the rest of our software, if you've signed up and you want to use the -- use us for billing and you want to use the software, the whole store for platform is included at all in the same price. So no extra charge to you, you've got telemedicine available. So for us, in 2020, our docs pivoted almost immediately to 100% telehealth. And of course, by now, the world has gone back hybrid. But we see another change in health care that we think is as big as the telemedicine initiative and think about patients who've got chronic conditions. And what's the right way to manage somebody with a chronic condition, whether it's high blood pressure, high cholesterol, diabetes, you're probably not going to get them to go in person to the doctor every month. You're not going to do as well with just a telemedicine visit. So that hybrid chronic care management visit is something that we've been thinking about and the industry has been thinking about for a while. Medicare changed their rules roughly about a year or so ago and private insurance changed as well to really emphasize these chronic visits. And once the Medicare rules were changed last year, we introduced an offering that we call Chronic Care Management as part of our CareCloud Wellness brand. And the notion here is we're going to have licensed caregivers who can have a monthly visit with a patient who's got 1 or more chronic conditions. This can be video, it could be audio, if that's what they want. It's following the care regimen that's set up by the doctor. And the notion here is, let's see that everything is fine. If it's good, let's have time for next month. If there's a problem, we need to get you back into to see your physician. Let's schedule that appointment right now. And as we've started to roll out this offering, we've retained a firm that's working for us with care managers. So initially, we'll be using a third-party. Eventually, we may do some of that work in-house. We've integrated it with the capabilities and our systems. And we've set things up so that as reimbursement comes in, the doctors are getting money. So even though we're actually doing the visit, the doc gets some extra revenue, the patient hopefully stays healthier. And then again, the goal here for Medicare and other payers is it's a lot more cost-effective to pay $100 for a monthly visit than to pay $10,000 when the patient makes it into the emergency room. So let's keep them out of the ER -- we've also added a second offering called remote patient monitoring. So unlike the chronic care management where there's a person involved, remote patient monitoring is pretty much all electronic. So you give the patient something like an automated blood pressure cuff. And again, think about what would your average doctor do if 500 patients gave their blood pressure readings every day? No way to follow up on that. On the other hand, what happens when this comes into my software, we can go compare to the readings that this patient has had before. We can see everything is on track. Okay, normal day. Out of 500 patients, maybe there's 1 where readings look a little bit off. And again, then it causes you to say, "Here's a chance to bring you back into the doctor while you're not in trouble yet, figure out what adjustments we need to make and keep you healthy." So far, as we've introduced this, the response has been great. Last year, we signed up doctors who -- when this is fully rolled out with their patients, will generate an extra $6 million of annual revenue for us. And we've kind of looked at the -- this offering in Phase 1. Let me offer this to my existing practices, and we think that could give us up to $50 million of additional incremental revenue. Phase 2 is going to be, let me introduce this and give it to other practices as well kind of as a way to get them interested in working with us. So we're pretty excited about CareCloud Wellness. So I think what I'll do now is give you a couple of case studies of a couple of practices that we work with, again, just to help you think about who are typical clients that would work with CareCloud. I'm going to go through these pretty briefly. Rocky Mountain International -- internal medicine is one of the largest health care providers in Denver. We started servicing them in 2018, starting with the revenue cycle management. They started using our EHR patient experience software. During COVID, they started to use our telehealth solution with great success. And last year, they signed up for chronic care management and remote patient monitoring to support their patient base. Fox Rehab. Fox is one of our largest customers. They are probably one of the world's largest providers of physical therapy and occupational therapy, in the home for older adults. So think about this as a geriatric in-home patient visit. When we started servicing them, initially, we were following up on old AR, then they asked to take over billing, insurance claims. We built a new mobile app for their people to be able to enter claims and enter information while they're out visiting patients. We took over the credentialing process. That was actually a big deal for them because credentialing is when you hire a new provider and you want to get them set up at to bill for insurance. That was about a 6-month process before we started working with them. And now that our team is engaged, now we get new docs, new therapists able to bill in a month or so. So that's really helped them bringing their AR down, bringing their denials down. So all the things that you'd want, if you're focusing on growing your practice. Hutchinson Clinic, another good example. So this is a multi-specialty group in Hutchinson, Kansas. They've seen tremendous growth. In 2019, they asked us to streamline their systems and their revenue cycle management operations. And again, we've been able to reduce denied claims. We've been able to improve the collection rate and the days that it takes for them to get reimbursed. So Again, we look at our goal as taking over the things that are necessary to allow these practices to grow and to focus on the practice of medicine. So if you think about our growth strategy, there's actually 3 elements to that. And at the time of the IPO, I would say, candidly, we really were not so focused on organic growth because we found that we could acquire businesses who had some challenges for less than our competitors could grow organically. So we'd see larger competitors spending $1.25 in marketing and sales to add $1 of annual recurring revenue. And if we could buy a business and a book of business for less than that, and we were often $0.50, $0.75 for $1 of annual recurring revenue, that was where we put our focus. Now I will say after we went public, people would say, "Bill, it's great that you've got a 35% compound annual growth rate. How much of that is organic?" And when we had no salespeople, there wasn't very much that was organic. Well, we really put more emphasis over the last couple of years on the organic side. And today, we've now got 55 people worldwide focused on marketing and sales. We've gone from under 1% to over 7% of revenue on marketing and sales. And we're getting good traction with new clients as well as the good traction with new offerings like CareCloud Wellness. Now we're still looking for accretive acquisitions. I would say that our challenge is we have a pretty high bar. When we want to buy someone, we'd like to see that for the investment that I make, I'm going to get a return on that investment, profits, cash flow in 3 to 4 years. And the way we'll do that is a combination of utilizing our technology, using our offshore team and finding ways that we can reduce the cost and the profitability. And we've been able to do that repeatedly. We're always looking for deals like that. In 2022, we didn't find anybody that met our criteria. Our guidance for 2023 assumes that we're not going to go -- continue to make acquisitions. But I'd say we're always looking for the next good deal. So thinking about our guidance in terms of our revenue growth, what I've done here, I've shown in the blue parts of the bar, I've taken out these 2 health systems. When we bought Meridian in mid-2020, these 2 health systems had each been acquired several years earlier, and we're using Meridian for some of their services. They had started down the process of migrating to their acquirers systems. We recognized that it would be hard to stop that process. So we knew that this revenue was going away. We just didn't really know when. We were initially told that they both be done with their migration at the end of 2020. Well, that actually turned out to be mid-2022. So if you exclude those 2 systems, our 2021 revenue would have been $118 million. Our 2022 revenue would have been $126.7 million. And you would have actually seen 7% growth. When you think about our revenue in 2023, we've guided The Street that it's going to be $142 million to $146 million, there's roughly $2 million even though these 2 have pretty much wound down, there's roughly $2 million of residual revenue that will come from those. So if I take that out, I'd actually be showing 12% organic growth rate in 2023. And again, that's a combination of new practices that we've signed up as well as cross-selling the CareCloud Wellness offering. In addition to that 12% organic revenue growth, our plan of 24 -- or our guidance of $24 million to $27 million of adjusted EBITDA for this year is 15% growth in EBITDA. And again, we're always focused when we acquire a business and even when it's running smoothly, on how do I automate things? How do I eliminate the overhead? How do I take work away from subcontractors and give it to my own team offshore if that's where it makes sense? And how do we bring the margins up even while we're investing more in sales and marketing each year? So we have 3 unique strengths that I think are the key to giving us a competitive advantage. The first is the technology platform. I mentioned that we developed the core technology ourselves. Most of our acquisitions have really been around customers. But the company whose name we took, that we bought in 2020, CareCloud, had some good technology. Meridian, which we also bought in 2020, had some good technology. And we've worked on integrating these into a platform. We've got about 500 people in total on our technology team, most of whom are offshore. The global team has 4,000 employees, 3,500 of who are offshore. Most of that offshore team is in Pakistan, some in Sri Lanka. And those people are 1/10 the cost of similarly educated and experienced people in the U.S. So that's clearly a major strength of ours and something that very few other people can talk about. And finally, our track record of acquisitions. We bought 17 companies since our IPO, and we have a proven process to integrate the businesses and [ bring ] out the cost. So I thought I'd give you a couple of photos again, so you can see the operation. I don't have a photo of our headquarters. I'd say the headquarters building is not remarkable. When you pull into the parking lot, you think you're showing up like in a small dentist office. It does not look like a headquarters of a global NASDAQ company. There's 21 desks in a 1,000 square feet. On the other hand, the building you see at the upper right in Bagh, in Pakistan is 1 of the 2 offices there, that hold 3,500 employees. And you see some shots of people working in various rooms there. So you got a lot of folks, most of whom -- the senior people tend to work U.S. hours. They've got accessibility by a U.S. phone number, the people who are on the phone with the customers are chosen because they can speak English well. And when we move work from a subcontractor to our own team offshore, we give people their dedicated account manager. So this becomes a great way for us to leverage the team a lot more cost effectively than hiring lots of additional people in the U.S. So I mentioned our stock. So I think it's worth thinking about our cash structure that's a little bit nontraditional. So we went public in July of 2014. At the time the IPO, we had $10 million in trailing revenue. The stock was $5 a share. Fast forward 9 years, we're now $140 million in revenue and the stock is below the IPO price. And so what I'd say for those who are thinking about growth opportunities, our stock is fallen by -- from $10, $12 a share 2.5 years ago to over -- just a little over $3 today. We tend to think the market isn't really valuing us. We think some of that is kind of a general phenomena that's small and microcap growth companies people are kind of shying away from today, just thinking about global uncertainty, interest rates, not knowing what's going to happen, I also think that we've been kind of under the radar and we need to do a better job of telling the story and getting people thinking about it. So if you're somebody who's thinking about growth, I think the common stock is certainly an interesting opportunity for you. Because the common stock has really not -- it hasn't reached the levels that we would find exciting, the way we funded most of our growth has been selling nonconvertible preferred, and we have 2 classes of preferred that trade on NASDAQ. The original one Series A has been out there for 7 years. So it's well established. We actually started redeeming it last year. And so the Series A is fully redeemable at $25 a share. So I have to say, being candid, spending over $26 for a stock that could get redeemed for $25 is probably not something that I would suggest people think about. On the other hand, the Series B shares and the 2 series are pari-passu. The Series B shares pay an 8.75% dividend on the $25 price. And for whatever reason, over the last -- especially over the last 2 weeks, that Series B that had been sitting there trading solidly at $25, it almost seems like somebody needed to sell some shares and the price went down. I have no idea why that stock is doing what it's doing. But you can get those shares today at $21, $22 a share. And I'd say when you think about an instrument that pays a monthly dividend in cash, pays the dividends on the 15th of the month and paid last month's dividend on March 15. So it's a good source of cash payments, and in fact, if you take that and compare it to the current price, the strip yield is something like 9% or 10%. So it's a pretty good rate of interest. I think that's an interesting one. And yes, it will be redeemable in the future. But when it's redeemable, it will be redeemable at $25, so there'll actually be a little appreciation. But I'd say you could even think about that and say, if I bought this just for its current yield, it's not a bad instrument. Overall, the company's enterprise value is a little under $200 million. Again, when you think about the revenue guidance, when you think about the EBITDA guidance, I'd say the 7 sell-side analysts who cover us, would all suggest that we're selling at a pretty significant discount to our peers. And -- anyway, I would say that for you folks, think about the common think about the Series B preferred, whichever one is better for your needs, there's -- I would say you probably could should just choose the one that meets your particular interest better than the other. So sort of summarizing. If you want to learn more about the business, I'd suggest you can go to our Investor Relations website, which is ir.carecloud.com. You can download a copy of this presentation. You can see other management presentations in the IR website under company information there is a video page. We did an Investor and Analyst Day in December. There's a whole bunch of videos there, probably more hours of things that you want to look at, but maybe a few minutes looking at the offshore operations, maybe a couple of minutes listening to carry the customer from Fox Rehab would be interesting. And finally, on the IR website, you can sign up for alerts so that when we issue press releases, you can get those delivered to your e-mail. So with that, maybe let's open the floor for some questions.

Okay. Great. Thank you so much, Bill. Yes, a lot of questions have come in. Can you talk about your IP security having your back office in Bangladesh?

Well, so the back office is -- people at Pakistan, not Bangladesh, but the technology, the servers are all either Amazon or Google Cloud. So the servers are not sitting at the office. I mentioned we have 500 people on our technology team. So we have a lot of people focused on security. We have a lot of people focused on doing everything from checking firewalls are good, doing the various forms of testing that you want to do. And candidly, if we had the whole technology team here, it would probably be hard to afford as many people focusing on IT security. I think having those people overseas actually lets us hire 10x as many as we could here for the same dollar. And our systems have been repeatedly tested by a lot of parties, whether it be large customers. There are actually a couple of very big industry participants who we partner with, who've done a fair amount of testing on us before saying, yes, I want to use your capabilities. And we feel really good about that. Also even as the U.S. government changes requirements for EHRs, I think last year, we were 1 of the first 10 that was certified out of several hundred. So we've got people who pretty much stay on top of this stuff.

Great. Do you see remote health care continuing to grow? Is this the modern day house call?

Yes. I think the hybrid model is going to be the wave of the future. I think anybody who says, "I'm never going to see the doctor in person again." That's probably not the right way to do it. On the other hand, there are a lot of times -- and again, think about the whole notion of our chronic care management. You've got a chronic condition, you're not going to take the time out of your day to go see that doctor every month. But if you can have conversations repeatedly every month, just keep track of it, whether it's a doctor, a nurse, a care manager, now you're having a problem, now is the time you need to go in. So we see that really being the wave of the future. And I don't think that people are ever going to want to go back to, I have to drive or fly or whatever to get to my specialists. They're going to want to be able to do it on their terms, and we think that, that's a great alternative.

Are you seeing any new technology in the marketplace utilizing Web3 or a virtual reality?

So the virtual reality, we've seen some people playing with it. AI, on the other hand, is something that -- I'd say we've actually been using AI for years. I mean the world started to think about it when chatbot GPT came out, and now we have GPT4. Well, one of the companies that we bought in 2020 was a spin-off from GE. And so this was some AI technology, some bots that were developed by GE that we incorporated in our process. So to us, again, that's pretty exciting thinking about instead of having a worker go gather everything needed to submit a claim, I could basically let these bots go out there and say, "If it's Blue Cross and its New Jersey and in it's this particular condition, here's the information they need to get it paid, let me find all that, let's pull that all together and let's submit it all with no human intervention." And to us, that cost savings is dramatic. And it's under the cover from -- with a lot of things we're doing today. So we see a lot of stuff with leading-edge technology. We tend not to emphasize the technology so much because our customers, they care about the results. They don't really want to know what's behind the curtain. They just want to know it gets submitted, it gets paid.

What are your differentiators? Do any competitors have a CareCloud type wellness type offering?

So I think 1 of the things that really differentiates us is the fact that we have this combination of software and services. And if you think about others who are in our space, a lot of them, I would say, are really software companies. They built an EHR, practice management, they're good at software. Services is a little bit of an afterthought, and they don't have the low-cost [ team ] that we do. So where they can't really develop those offerings. There's also a lot of revenue cycle management service companies who don't have the software. So I do think it's that combination that really is exciting. And in the remote patient monitoring arena, we've talked to a dozen companies who've got a particular device that they think is going to revolutionize things, whether it's for diabetes or for checking obstruction in the airway, so somebody with asthma. The challenge is they've got this device, they focused on the hardware, they've focused on the software related to the device itself, but they haven't thought about how you integrate it. And for us, again, the stand-alone device is worth much less than the device, if I could plug this into your EHR, whether it's my own EHR or into a competitor system. I mean we've kind of designed our wellness offering, thinking about the fact that while we have a lot of people who use us, a lot of them use Athena, a lot of them use Allscripts, a lot of them use Cerner it doesn't really matter. So let's develop but offering that will work with any EHR in the market that will check on the patient's actual condition and update the doctor and allow them to provide better care. So we think, again -- so thinking about it holistically, where we probably have the competitive edge. Not that we're the only one, but we probably have the most advanced set of integrated software and service capabilities.

Can you talk about your strategy of making acquisitions in a down market? And how do you assure you're buying at a value inflection point?

Yes. And I mean, we -- the 2 biggest acquisitions we did were in 2020. And if you think about the world in 2020, that was pretty much for a lot of people at down market. We doubled in size in 2020. And we bought CareCloud in January. So you could argue that the time that we did the CareCloud deal, the market itself wasn't yet totally down. That was a company that had, had maybe $130 million of venture capital invested in it. At the point that we bought them, they were out raising money as they had almost every year. They were in default on their debt. We bought them from the debt fund. So the debt fund -- we gave the debt fund some shares of our preferred stock to pay for the acquisition. The VCs lost their entire $130 million investment. And yes, we looked at that and applied the same metric that we always do, which is, let me think about and build a model before I build -- I buy this company. What are the costs? How can I reduce them? And how can I get the profits and the cash flow so that in 3 or 4 years, I can get back what I paid for the business. And an example is they had gorgeous offices in Miami, and our statement was you got offices that are so nice, but you spend a lot more every month on your rent than we do every year. Does that really make sense when you're in default on your debt and you're out there raising another $20 million? Their CEO statement is, "Well, that's why I only signed a 3-year lease last month." Okay, from our perspective, that's why he did a great job delivering a company to us, and we could shake his hands on the day of the transition and say, "Thank you very much," because that is the mentality none of our customers care about our offices being nice. Nobody wants to say, "Okay, you're on the top floor of the building with gorgeous views." You don't need that. I mean, again, why do we have small headquarters? When we need people to support the headquarter staff, the first place to look is can I do that overseas? Can I automate it? Can I find people who come through another acquisition, who I can give them some additional workload and keep them gainfully employed here in the U.S." I mean so I want to have people -- when I buy a company, I want to keep the people with the customer relationships. I want to keep the sort of the senior technology people with the vision, the architects, the product managers. The folks who are doing the more mundane things, you know what, let's do the more mundane things more cost effectively. And as we think about acquisitions, we're always focused on how am I going to get that return on investment in 3 to 4 years? And sometimes you think it's going to happen in 3 to 4 years, and it takes 5. Okay, you still got profitability. You're still doing pretty well. I'll compare that with some of the companies we talked to last year would say, "Well, I think I'm worth 5x revenue" and I'm small and private and I didn't take any money for the last couple of years. So I don't really know what my value is. So I'm going to assume it's the same as it was a few years ago," which is probably not a good assumption, but that's what they wanted. And if I pay 5x revenue for a business that's not yet profitable, how many years is it going to take me to get a return on that investment? I mean if I could bring the cost to 0, it would be a 5-year ROI, but that's not really realistic. So if I got them from nothing to a 50% margin, which would be phenomenal, it'd be 10 years. I look at that and say, if it starts out looking like 10 years, it doesn't get any better. That's just not a deal I really want to do. And so we have to go look at a lot of deals and find somebody who's motivated and we can do a deal on terms that we think are going to make sense going forward. And so if that means it takes us a little longer to do a deal and people will say, "Bill, it's 20 months since you bought somebody." Okay, it's 20 months. I'd rather wait a few more months and find the right deal, then pull the trigger right now and feel like later on, maybe I didn't get the ROI that I was looking for.

Do you find that there is a better margin opportunity with smaller practitioners or with the larger corporate hospital practices?

Yes. So I would say it's probably more in the doctor practices as opposed to the hospitals in terms of a margin percent. I think in terms of total dollars, there's certainly a lot of opportunity in the hospitals. And I'd say we traditionally focused on the ambulatory practices. And it's really over the last couple of years that we've started to get some inroads with hospitals. And it was a company that we bought in mid-2021. The company's name is medSR. It was actually a merger of MedMatica and Santa Rosa staffing. And they were a professional services firm servicing the hospital space. So again, hospital A buys hospital B or buys a practice or they want to convert from Cerner to Meditech or whatever. So they've got people to do that. They've got the rent to CIO if you need that. And we looked at that and said, that business is interesting. It's especially interesting because of the foot in the door with 200 hospitals. And every time they sign $1 million professional services deal, it's probably a $10 million RCM contract sitting there that medSR never had the capabilities to handle. And so we looked at that not just for the revenue from the projects, but as the foot in the door to be able to sell more services and more capabilities into the hospital space. So we think there's an advantage to having focus in both arenas today.

Great. And as far as the analyst coverages, is it in the health care sector or the technology sector or both?

I mean I'm going to say the answer is yes. So some of our analysts tend to be more technology analysts who focus on other tech firms. Some of them tend to be more health care analysts who typically, it's not the person who is doing biotechs and the drugs, but rather who's doing health care services, health care IT. But we've got analysts that sort of cover us with both perspectives. And I do know that a lot of smaller companies today, it's been hard to get analyst coverage. And when I tell people, I've got 7 analysts, some of whom are -- have been covering me for a while. So I've got analysts from everywhere from Ladenburg and Maxim, H.C. Wainwright, Benchmark, EF Hutton, I mean, ROTH Capital, we've got a bunch of different analysts, and I think that's good. And I encourage people to -- if you're interested, reach out. I think I've sent you the reports. I'd say to people, look at all 7 of them, you decide which one you like better. I'm not going to editorialize, but I think they've all been there. One of the analysts who's covered us the longest before he started to cover us, he said, "I need to visit your office." And we said, "Well, Kevin, you've been in our office." He said, "No, no, I mean the real one. And I need to go to Pakistan." And he actually flew out to Pakistan. He had seen -- he's been in our office and he's seen the Pakistan office on a video conference. He's like the quality is too good, the conference room looks -- that's got to be like downstairs. And to have later, he's there and he's like, wow, this is actually the real thing. So I think it's good having analysts. Another one, I remember around the time of the IPO. He actually went to our founder's wife's practice, a couple of miles from our headquarters. And he saw the staff working. And he said, "Geez, you got -- this is actually real. This isn't vaporware." He said, "When I heard you describe, but I think this wasn't real. I actually saw the nurses typing things in. I saw the patients logging into the patient portal." This was in 2013, and that any like I've blown away that this is actually really working. So we've got analysts who've actually kind of looked at the stuff under the covers to validate it, which is good.

Great. And what needs to happen in order for you to leverage your business model for exponential growth?

Yes. So I'd say that while we've grown a lot recently, we're still small. And I thought it was interesting, the analyst from Hutton, who is, I think, the most recent one to have initiated coverage. In his report, he did a good job of saying, what was Athenahealth like when they were the size? What were Allscripts and NextGen and other companies like in this size" because people -- they think about Athenahealth and it was well over $1 billion in revenue when it went private a couple of years ago. They kind of think about their profitability when they were a $1 billion company. They forget about where were they were they were $100 million, and it's actually hard at this scale to generate significant profits, especially when you're reinvesting in technology and reinvesting in the sales and marketing effort. And I think that when I think about our guidance for 2023 of $142 million to $146 million, and I think about growth, okay, we're going to have nice revenue growth organically. And again, this year's numbers sort of have 12% organic baked in when you take out these big hospitals. But candidly, if all we do over the next 5 years is 12% a year growth, which would be phenomenal and probably make us the fastest growing in our space, I don't think we'll be excited. I think we'll be more excited if we find 1 or 2 of these game-changer opportunities as we did in 2020. And we think about, okay, I'm growing 12% a year, oh, and by the way, every once in a while, I'm finding something to ratchet up 50%, 25%. So to us, as we continue to scale, we think that will allow us to bring more to the bottom line. But we're not going to focus on, okay, I want to earn an extra 1% to 2% this year, so I'm going to be a little stingy on the R&D. I'm going to not invest in the sales and marketing. We want to do that because we think that our investors are really thinking about this from the long-term perspective and making those investments is the right thing to do.

Well, that concludes the questions. Before we sign off, I just want to let everyone in the audience know that you can reach out to me. Everyone has my e-mail. I'm happy to connect you to CareCloud. And Bill, I'm going to turn it back over to you for any final words for everyone before we say goodbye.

I appreciate people taking time out of their busy day to learn more about us. And again, if you're interested, feel free to reach out. I'm happy to chat with folks. I love the idea of people signing up on the website, seeing some of these videos. Even you don't need to see me, you've already seen me. See the offshore office, see the customers, see a couple of members -- other members of the management team even for a couple of minutes and that will really help you to get a better flavor of who we are. So I hope everybody has a great afternoon today. Thank you.

Okay. Great. Thanks, everyone, and have a great day.