CareCloud, Inc. ($CCLD)

Thank you all for joining us in person, and thank you to those who are tuning in online. We are live currently from the NASDAQ market site in New York City, and we appreciate you all making the trip coming in virtually for the 2026 Analyst Day. So without further ado, I'll go ahead and introduce our Chief Executive Officer, Stephen Snyder.

Great. Thanks so much, Casey. Appreciate it. Thanks again. Really appreciate everyone making the time to come out. Whether you're joining us by the live stream or even in person, I couldn't be more thankful for the fact that you took some time to hear a little bit about our story. And obviously, there'll be individuals joining who know our story very well. And if you know our story very well, a lot of what we might talk about today will be a bit redundant, but we're also hoping to share with you some additional insights that will help you understand what our overall strategy is. For those who don't know our story, we'll also be including some additional overall highlights and the like, so you can better understand who we are and what we're doing. Today, as we think about the overall day and the agenda, I'd like to at least walk you through some of the high points, some of the things that we'll be doing today. So from the perspective of the overall presenters in the room, I'll walk you through the team in just 1 minute. These are the individuals who will be talking with us today about CareCloud. And at the end of the discussion, we'll have a Q&A session, too, where we'd love to be able to answer any questions that you have. I'll walk you through the agenda. Quickly, these are the key points we'll be talking about. I'll also talk about some of the key elements of our overall story, some of the key themes when we look at the story that we think exemplify the overall company and really accent the places in our story that makes sense to focus in on. So if we think -- sorry, if we can go back just to the prior slide for 1 minute, I'd love to just talk about some of the presenters. Mahmud Haq, who's our Founder and Executive Chairman. Mahmud is joining us remotely by live stream is traveling. I would have loved to be here, but he's joining us by live stream. Mahmud's story is interesting. It's the kind of classic entrepreneur story. Mahmud was looking for a solution for his health care provider wife's practice. She was starting out of practice. He searched the market, couldn't find a solution that probably meet his wife's needs. So he started MTBC at the time. MTBC then over time became CareCloud. So the story is really an outgrowth of that need that his wife had and Mahmud working to try to fill that need and appreciating the fact that there's an opportunity in the market. Norm Roth is our Interim CFO and our Controller. Norm is one of the hardest working guys that you'll ever meet, and he'll be walking us through our financials. Hadi Chaudhry will focus on AI and focus on IT. I and I have been working together side by side for 20 years, and I think you'll learn a lot from what Hadi has to share with us. Crystal Williams serves as our President, helps oversee operations, delivery, customer support. We are really excited to be able to bring her on board. Like many of our other team members, she joined us through an acquisition, which for us has been a wonderful way to make sure that we're able to find talent in this space that can help leverage not only the acquisitive opportunity that we're working through from perspective, but then long term serve as a member of our team. And many of the members of our existing team join us in exactly that same way. So Chris will be speaking soon as well. Chris joined us as well through an acquisition. And Chris joined us through the most recent acquisition of medSR. Chris served as the COO of medSR. And in speaking with Chris and getting to know Chris, we really thought that he was the right person to lead our overall growth strategy. So we couldn't be more excited to have Chris on board. And you'll recall that the overall growth strategy has a very heavy emphasis on expanding the wallet share of existing customers. So at least as we thought about it, we think there's really no one better to be in that role than Chris. So we're excited to have him on board. Brendan Covello serves -- who heads up our business development team and also serves as corporate counsel and is doing a phenomenal job in that role. He'll also be joined when we talk about M&A activity by Dan Davis, who likewise joined us for an acquisition. Dan Davis was the CEO, founder of a company that was really focused on the hearing health space. He'll talk about that some more. But he really exemplifies the model that has really worked very well for us. He grew the business, got to the point where he thought that he needed someone from the outside to be able to come in and to provide the tools so we can get to the next level. And I won't steal this relevant share more about his story. But I think you'll find a story very interesting. He can talk to the integration, but then also the flywheel effect that from an organic growth perspective, the acquisitive activities then have in terms of being able to position us to expand our wallet share. That's the team internally. More importantly than the internal team, I would say, we have 3 of our customers here as well. And we couldn't be more honored and pleased to have our customers with us. Dr. [indiscernible] is the CEO of [indiscernible]. He's grown [indiscernible] now to more than 5,000 clinicians, serving more than 4 million patients each year across 40 states, and they're just getting started. So we're excited to hear more about his story. [indiscernible] is the Founder and CEO of the Lung Center, and he is the driving force for respiratory care in Alabama, and he's been doing that since the late '90s. So we're very excited to have him on board. And last but certainly not least is Dr. Masoud. Dr. Masoud is a serial entrepreneur. He's the Founder, Chairman and CEO of [indiscernible]. He's a philanthropist beyond all of that. Maybe we'll tell you a little bit about that when he talks, the activities he's involved in. And if you think about [indiscernible] is the company that he founded, it's one of the largest providers of home infusion services in the U.S. And again, he'll tell his story. All 3 of these customers will really talk about not only their own story, but how it is that they found us as a company and what works well and maybe what doesn't work well. So they'll be candid and share their own stories around. We can flip to the next slide, please. Again, in terms of the overall agenda, we'll go through pretty quickly the strategic frame. That will really be -- that will consist primarily of, first of all, a high-level overview of the company for those who aren't as familiar with the story, everyone in this room, we'll frankly know most of that, but we want to make sure we take time to go through that for the rest of our attendees. And then we'll focus in on some of the key themes that we'll be tracking today. We'll talk about the financial performance overview, our historical financial performance and a little bit about what lies ahead. Norm will handle that. From a capital structure perspective, we'll touch on that briefly. Then we'll shift into the M&A and the overall organic growth engine. And in that portion, again, Chris and Brendan and also Dan will play a key role. We'll focus on AI, and Hadi will walk us through AI, and then we'll get into the client success stories and operations, and Crystal will take the lead there. So if we go to the next slide, we have a quick high-level overview of the company and then the next slide after that, please. So we were founded about 25 years ago. We went public then about 11, 12 years ago. Today, we work with more than 45,000 health care providers throughout the U.S. 250-plus hospitals, and we do business in all 50 states and many of the U.S. territories. These providers use either one or multiple of our solutions or services. So our EHR, our practice management system, our revenue cycle management platform or services, patient experience management tools, advanced analytics, AI and on and on and on. So within this existing 45,000 health care providers and 250 hospitals really lies the opportunity for us from an expansion of the overall wallet share and being able to meet the needs of these existing customers and being able to expand from an EHR-only customer, as an example, to a customer who wants to leverage our revenue cycle management services for AI and the like. We're also an AI-first company, and again Hadi will talk about that some more. We have 150-plus team members in our AI center of excellence. And again, Hadi will touch on that some more. From an AI perspective, AI is incorporated throughout the majority of our platform, even the more newly acquired platforms that we acquired during the medSR acquisition. We've really made great strides at beginning to incorporate AI into those platforms. From a financial perspective, again, Norm will give a little bit more detail. But last year, we generated over $120 million in revenue. We had positive GAAP EPS of $0.10. This is our first positive earnings year, GAAP earnings year. And from an adjusted EBITDA perspective, we're at $27.5 million. This year, we expect to double our EPS and also further increase our free cash flow. On the next slide, if we could, please. So we're really kind of grouping the themes into these kind of 4 main categories. Obviously, we'll talk about more today in the overall context of the discussion, but these are at least 4 of the main themes that we think are prominent in our overall story. Starting with the first theme, of course, health care, as we all know, is huge. Health care is a $5 billion-plus segment of the U.S. economy, represents close to 1/5 of the overall GDP in the U.S., $15,000 roughly per capita. AI is fundamentally reshaping the health care space. It's not a question of if, it's not a question of whether it is. It's fundamentally reshaping the health care space. And increasingly, it's really driving efficiencies, it's driving the effectiveness of care and the like. that's one theme that we think comes through in the story. The second would be, for us, while our preferred equity historically has played a really critical role in helping us grow our business successfully, we now have a clean, simple common stock story. So for us, it really played a key role, and we'll talk about that a little bit more. But we're at the point where we're really pleased to be able to say that really, for the most part, is a thing of the past. That's the second theme. The third theme is today, free cash flow is now the engine that's driving or powering our overall growth. It's really not a constraint today. And then a fourth and final theme would be we're one of the most accomplished acquirers in our particular space. I couldn't have said that 16 years ago in our first acquisition, which was quite frankly, a disaster. But the second one was a bit better. The third one was significantly better, and we got into a cadence, build out the overall processes, the overall approach, understood what was important and what was less important and really focused in on the important things and continue to try to build on the successes. So we're in a very different place today. In fact, we've been in a different place for quite some time when it comes to acquisitions. But in any event, that's another core part of our overall theme. What do we acquire? We acquire companies that have recurring revenue streams. So it's the same sort of relationships that we compete for in the organic space. So why we then also compete in the acquisitive space. It's really because, in large part, kind of 2 key reasons. One would be it helps us build our overall team. And then the second key reason would be from the perspective of the overall customer acquisition cost, it allows us to acquire the same sorts of recurring revenue relationships, but at a multiple that's far less expensive than traditional organic growth. And with that, let me invite Norm to come up and share with us some more about the financial performance.

Thank you, Steve. So just turning to the first slide and continuing what Steve was saying, we've been a very acquisitive company over the last several years. You can see just some of our key acquisitions. We've done 25-plus acquisitions to date. Last year, we had a very large acquisition, medSR. And in October, we had the MAA and AI app that we acquired. People ask what do we look for when we're evaluating a target company. So we look at at or near breakeven, recurring revenue base, low operational risk and a business that fits in with our overall model. We're also concentrating on attractive valuations. So we're looking for a purchase price ideally is less than 1x revenue, so maybe $0.60 to $0.80 of revenue, near-term accretive. and a strong customer base. Once we do the acquisition, our focus is on rapid margin expansion. So our target is 30% margins within 3 quarters, reduce the operating expenses, some of that work we can move offshore, sometimes we just bring a duplicative people and expenses. We certainly deploy our CareCloud technology, which a lot of the small companies that we purchase just don't have, especially in the AI arena, and we look to improve the efficiency and scalability. We do look at a lot of companies. However, we talk to a lot if they just don't fit our criteria, we pass. So that's just a little bit of our acquisition history. So if you look at our cash flows, Steve said cash flows have been improving, and Steve will get into the free cash flows later. One of the things we just did last Friday is we eliminated the dividends on our Series B preferred stock by purchasing all the preferred stock back. That eliminated dividends at 8.75%, which are not tax deductible. We took a loan, which is at 7% tax deductible. So it's not only strengthened our capital structure, which just reduced our outgoing cash flows. The other nice thing with the term loan is with the preferred stock, we had eliminated in one shot, whereas with the term loan, it's self-liquidating in the documents that you see that we filed. It's a 48-month term loan, which we plan to pay a little sooner than that, but 148 of the loan gets amortized every month. So over the term, principal is continually going down. If you look at our balance sheet just compared to last quarter this time, we've increased our cash. We've doubled the amount of working capital. So we feel that we have turned this around and we can rely on our cash flow going forward. If you flip to our balance sheet, I think we've cleaned up the balance sheet over the last several years. I believe we have a strong balance sheet that will help us propel going forward. One of the things you'll notice in our balance sheet is something called contingent consideration, which is a liability, which allows us to pay for some of these acquisitions through the revenues that we generate once the acquisition is accomplished. So almost just paying for it through their revenues. So I think from -- at this point, we've got a good balance sheet, and we're strong going forward. If you just look at our guidance and our revenue, you can see in 2024, we had $111 million. Last year, we reported $120 million. This year, our guidance is $128 million to $132 million. Same thing with adjusted EBITDA, we were at $24 million, went to $28 million in 2025. And this year, our guidance is $29 million to $31 million. The better story is with the EPS. We had a $0.28 loss per share in 2024. We reported $0.10 positive EPS last year and $0.20 to $0.23 this year. And this guidance was just reaffirmed on our earnings call. With that, I'll turn the floor back to Stephen. Thank you.

Thanks, Norm. And Casey, if we can go to the next slide, please. So first of all, I want to just touch base real briefly in terms of the overall capital structure. And maybe I'll step back a little bit further and just share with you what the purpose of the preferred was and the role that it played. If we go back to 2015, we were at about a $20 million, $23 million revenue company at the time. And we, at that point in time, we're thinking about how do we go about acquiring other businesses, how do we go about from the perspective of the overall growth opportunities that we saw in this space. One of those opportunities that was presented to us was this opportunity in terms of the preferred. And as [indiscernible], who's here with us, will tell you, this particular instrument is pretty rare. You don't come across many small cap companies, microcap companies at the time who leverage preferred. But for us, it worked well. So what preferred helped us do is preferred helped us grow from a $23 million, $20 million company to about $130 million company this year or let's frame it last year, about $120 million company. And really preferred was the growth engine in part that helped us get there. It helped us close acquisitions and to move forward. Now it was very successful in doing that. But over time, what it also created was it created an annual dividend burden and also in addition to the annual dividend burden created the overhang. So what we embarked to do starting about 2 years ago is we recognize the fact that we had largely outgrown the need to use preferred. So we considered different paths of actually making sure that we were able to eliminate the majority of that overall dividend burden and also the overhang. So I'm really pleased to say that from -- if we go back 2 years ago and compare that to today, we've eliminated more than $13.5 million worth of cash dividend obligation on an annual basis. We've also removed $140 million plus of that overhang between the preferred stock and the accumulated dividends that were associated with them. So we really hit reset in terms of the overall structure, we successfully get reset. And we're pleased, as Norm said, to have been able to close out the -- one of the final chapters of that most recently this last Friday. So if we go back 30 days before last Friday, we closed an acquisition line with Citizens Bank. As you would imagine, like any acquisition line, let alone a $50 million facility for a company our size and involves a significant amount of due diligence, pressure testing, our overall cash flows, understanding the overall dynamics of the business, understand the industry. We're really pleased to say that Citizens moved forward with us about 30, 35 days prior to then. And then that set us up to be able to redeem the shares. So we used $42 million roughly of the overall facility to redeem those shares. And then thereby removed a significant part of that overhang or at least completed the removal of that overhang together with the dividends. On the next slide, we're going to just talk very briefly about free cash flow. And really, it was the free cash flow that really had -- was one of the things that positioned us to be able to move forward with that credit facility and also to remove a lot of that overhang. And then by extension, the dividends associated with the preferred. If we go back to 2023, our overall free cash flow was a little shy of $4 million. we progress then to last year, $20 million and change. This year, we're -- we've provided guidance, and we're confident that, that number will be approximately $25 million of free cash flow. So we've been able to increase free cash flow by about 6x during this period of time. If we step back and just think for just one moment about the Citizens Bank for a minute, Citizens Bank, the principal interest on that overall line is about $1 million, give or take. Norm can get into specifics, but it's approximately $1 million every single month. During the second half of the year, we're confident we'll be producing well over $2 million I may be a little bit more conservative, approximately $2 million, but maybe well over $2 million each and every month. So the idea is we're able to not only pay the principal and interest and thereby complete the overall -- the kind of tail end of that overall redemption by paying off the underlying line, but we're also able to use that excess free cash flow for continuing to grow the business for acquisitions, organic growth and the like. If we can flip to the next slide, Casey, and I'm going to invite Brendan to come up, please. Brendan is going to talk with us some about our overall acquisition strategy, and we'll really start with the themes that Norm has spoken about. And Brendan, please come over. has been with us for about half a year or so, is just doing a great job in this role.

Thank you, Stephen. My name is Brendan Covello, I'm Vice President of Corporate Development here at CareCloud. I lead our growth and M&A efforts. And right now, it's a really exciting time to be in this seat. As Stephen mentioned, with the capital structure cleaned up and cash flow accelerating, we're actually in one of the strongest positions we've ever been to pursue acquisitions. And I'm going to show you a little bit more about how we're going to put that to work. So it starts with the opportunity. Right now, there's a fragmented market in the revenue cycle management space. There's more than 2,000 companies that we are currently targeting and the vast majority lack their own technology, AI capabilities and global resource delivery team. Those are the 3 ingredients that CarePl can offer and turn a mid-market RCM book into a margin compounder. The model is what makes these companies attractive. It's their entry price. Many of the sellers are owners ready to retire or derisk. We're acquiring these companies with reoccurring revenue at 6.6 to 1x revenue. You compare that to the cost of winning the same company organically, which in the health care IT space runs above 1x, you can see why M&A is such an efficient growth channel for us. And the third pillar of our M&A strategy is the deal structure. We structure these deals to protect against downside. 40% to 60% of the consideration is cash at close. and we structure the rest as an earn-out that only pays when the acquired book hits the agreed upon financial milestones. And these 3 pillars and overall M&A strategy is exactly why CareCloud is built for M&A compounding this year and into the next. Next slide. And the next question is how do we fund this and what does the integration exactly look like. So as Stephen mentioned, and connecting back to the cash facility that we just previously closed on is we now have free cash flow of approximately over $1 million in the second half of this year. And after paying back the principal interest, this is what's going to pay for the tuck-ins and investment in the global delivery expansion that we are hoping to pursue. We won't have to have any equity dilution or we will not have to draw on the credit line. And we're going to be able to do this with our tried and proven playbook on the integration side. We have been able to acquire clients, bring them to the CareCloud platform, layer in our RCM automation and shift the services to our global resource team. And the result is acquired entities move from roughly breakeven to 25% to 30% contribution margins within 3 to 4 quarters. And this isn't theoretical. We've closed 4 tuck-ins in 2025, all funded from internally generated cash flow, and we even have another small tuck-in currently under a nonbinding agreement. And to discuss this further is Dan Davis. He's going to bring this to life. He's currently running our Hearing Healthcare division, and I'll turn it over to Dan.

Thanks. Appreciate that. So my name is Daniel Davis. I am the President of the Hearing Healthcare division of CareCloud. I've been in the health care business for about 45 years, and I've been in the hearing industry area for a little over 10 years. I was the CEO of Revenue Medical Management and part owner of it. We were a medium-sized RCM company. And we were specific in the audiology and hearing aid space, which sets us apart from a lot of the other RCMs, but we are that little unique -- I'm in a unique position here of being on sort of both sides of what we're going to talk about today, being on the M&A side of it and on the operational RCM side of it as well. So a little bit to talk about what happened with RevenueMed. So as you can imagine, being a small to midsized RCM company trying to grow, we started in Southern California. We had an office out there. We put our teeth in Cali. We started small, and we started to grow. And you can imagine being a small company with staffing, not only was I the CEO, but I was also the HR. I was also payroll, I was also marketing and accounting and business development, [indiscernible] at times as well. Whatever it took is what we did as a small company. So I would tell you that a lot of companies like ours run into these problems as you're trying to grow and you're trying to figure out where are you going to go and how you're going to do this and how you can do it organically without over operational cost and everything else. And I summed it up in basically 3 words, and it's support, bandwidth and focus. And -- there's a lot of challenges to this as you're trying to look at things because as you're trying to grow your bandwidth, that creates another problem in the fact that now you've got all this other operational stuff to do and you start to lose the focus. So how do you grow this? And how do you give the support to do this as a small company? So in 2024, we did some decent growth. We started out pretty small. We only had a few clients, but we are doing pretty good. 2024, we are averaging about a client a month. So we were basically in California, 2024, we actually expanded out and started getting it and we are in 11 states. We went from about 4 or 5 clients to a little over 20. So we were doing pretty well. Well, when you start doing pretty well, I guess what happens? Here comes bandwidth problem. So now we're based in Southern California, and I've got a client in Florida. And that client in Florida at 9:00 in the morning wants an answer about a verification of benefit. Well, it's 6:00 in the morning in California. So now you're having to talk about remote staff. Now you're having to talk about geographic problems. And so your bandwidth becomes a very, very stagnant part of what you're trying to do. And while you're focusing on this, guess what you're not focusing on, the business side of it and the growth in the revenue because there's only so much you can do as a small company when you're trying to do that. So you've got your time zone problems, you've got all your staffing problems, you're trying to train people. And that's really where we got to a point in that tipping point of where is RevenueMed going to go and how are we going to do this? And we started off 2025 when we started thinking about things. And I think it was late February. I got an and Dave coincidental from Stephen Snyder. And it talked about CareCloud and what it could do to help companies and the opportunities they had and the AI generation and all these other cool things. And I was just like, well, this is interesting because what we didn't want to do is we didn't want to go venture capitalist. We didn't want to go get bank loans. We didn't want to -- we were trying to organically grow this. And what he was presenting through this e-mail, which I found out later was AI generated. It was very intriguing. So I reached out and we talked to him, and we went through some stuff. I told him about the challenges, where [indiscernible] was going, what we're trying to do. We grow it organically. We go to conferences. We do our business development and -- but this is where I am now. I'm stuck. And so -- we went back and forth for a little bit. And I would tell you that in April, actually, it was April 1, so cools day. But on April 1, we became part of the CareCloud family, and they acquired our company. And it was really cool because it basically was transitioned over. Our staff came over, our clients came over. It was a very smooth transition. None of our clients fell off. They all stayed. It was very great. I would tell you that we spent the first 60 days or so just doing the transition, teaching the CareCloud staff, the craziness of the industry of audiology and hearing aids, and we created the hearing health care division. So by the end of December, we actually had doubled our client base. In those 8 months, we actually doubled our client base. So that takes us into 2026. So 13 months into the acquisition where we were going from a client a month, we're now going to a client a week. So talked about support and bandwidth and focus. So the support, this is what we got. I've got the support. I got the support from Stephen and administration. I got the support from Norm and finance. I got the support from Crystal and all of our operational team. I got the support from the sales and marketing team. Chris, I got all the support that I could ever do. And I got the bandwidth to go with it. So guess what happened? It allowed me to do the last problem, focus. When you can focus, you can do exactly what we did there. When you go from 24 clients to 72 clients in 13 months, 300% growth, 126 providers to 230 providers, 183% growth. So we were in 11 states. We're now in 29, soon to be 30, 264% growth. And with our new clients, like I said, new client velocity, 22 in the first 8 months. We've done 35 clients since January. That's focus. That's what this method does when we talk about the M&A and finding companies that need the assistance. It's not about a takeover. It's not about take pretty woman and buying the company and demolishing it. That's not what this is. This is bringing it in and organically growing it to become a bigger and better revenue source for the company. And that's exactly what happened with this. And it's been very cool for me to be able to be part of it and just to be able to focus on what I do best. And I think those numbers are pretty staggering for 13 months. a lot everybody here on the focus team. So that's my story. I appreciate it. And to talk more about that on the Revenue med side and where we're going, I'm going to let Chris come up and he's going to give you some insight on how we're doing on growth from [indiscernible] and the sales.

Thanks, Dan. Exciting times, guys. We've got a uniform platform at the right moment right now. If you look at what's happening, go ahead and hit the next slide, Casey. Thanks. The market is shifting our way. Reimbursements and margins are lower, makes it harder for the physicians to make money. Every dollar in operational efficiency matters, and that pressure is driving consolidation. Providers are moving away from point solutions and towards integrated platforms to do more with less ultimately. Further, automation and demand are accelerating that shift. Providers want tools that reduce manual work and scale without adding that headcount. So these dynamics are already at play and across the market. And how do we win in that space? So we have a broad platform of ambulatory inpatient and other specialty care solutions. [indiscernible] that range on one roof is something that very few of our competitors can do. Existing relationships lowers that cost and time to expand, and we're not starting from scratch. We are deepening what's already there. Our operational data gives AI meaningful context from day 1. And our multiproduct customers drive higher retention and lifetime value. The more of the platform they use, the stickier the relationships are ultimately. Where we play at is in self-billing providers are looking to simplify their billing operations and RCM is a key entry point to that and all things adjacent within the portfolio. Physician groups that are consolidating vendors, they want one platform, one relationship, one contract and health systems looking to modernize. Also our existing HR customers is a clear path to the full platform, for example, like [indiscernible], I mean we have a couple of hundred customers that are mid-flight right now we're looking to migrate and expand with. Next slide, please. So we're going after this in 2 different directions. One to expand existing customers and also for net new acquisition and new customer growth. expanding relationships to cross-sell. These customers are already on the platform and the highest probability growth opportunity we have period. AI is opening up that broader platform conversation. It gives us a reason to go back and have conversations with them and what else we can do together ultimately. The installed base creates scalable expansion. These existing relationships mean shorter cycles, lower cost and higher close rates ultimately. The platform that improves retention. The more workflows we touch, the harder it is to leave us. When we look at new customers, we're using our own AI-enabled engagement expands reach across target markets. We can run more touch points more consistently than a traditional team could manage. These diversified channels keep our pipeline moving, paid referral events, so no single source creates a bottleneck and that overall lead gen engine. The multiproduct deals from the start, higher ACV, and we're building that retention baked in from day 1 by expanding not just a single point. Automation allows growth without proportional headcount expansion, the output scales and the costs do not. A lean SDR team using AI and automated sequences to engage accounts at a scale, a small team normally could not. So we leverage these same sequences to our tools and automation. So right now, the pipeline ACV are tracking ahead of the same period last year, and the adoption with the installed base is creating new expansion opportunities as an entry point and the cross-sell accelerant ultimately. So let me show you how the team is structured. Next slide, please. So as Stephen mentioned, a lot of us in this room, we all came from acquisitions. We're built on M&A experience, integrating acquired businesses, expanding solution set and compounding value across the base ultimately. In our ambulatory portfolio and platform rather, we have RCM clinical AI and patient engagement. It's basically a full stack for ambulatory providers. Our insight teams covers the smaller groups, 1 to 3 providers, high volume, efficient motion and our field sales team works larger, more complicated, more complex, higher ACV opportunities. We also have specialty support like Dan working in audiology, and we have dedicated individuals selling Stratus -- cross-selling stratus and cirrusAI into our customer population, for staffing. In our inpatient platform, which is unique because a lot of different companies are coming out from different angles. But for us, we have an ability to go after critical access hospitals, urgent care, freestanding EDs, smaller behavioral health facilities. And with our consulting, we can lead in with operational revenue cycle stabilization but then expand to broader platform opportunities from there if we earn the right to grow. And then data convergence in archive services, it's a practical entry point for systems the transition. As far as our outside sales team has grown 3x since the same time last year. This is deliberate investment and not incremental hiring. The capacity is in place to execute the growth plan. And then with our flywheel, we acquire by bringing organizations on the platform. We integrate, we embed across financial, clinical and operational workflows and then cross-sell, again, AI and adjacent solutions as trust deepens. And lastly, compound, retention improves, ACV grows and acquisition costs decline ultimately. So the platform is broader, the team is larger and the market is moving in our direction right now. And with that makes, I'd like to invite [indiscernible] up to talk more about AI. Thank you.

Thank you, everyone, for taking the time to come here. You already have gone through what CareCloud is. You only went through the M&A and the numbers and the capital structure. I'm going to take the next 20 minutes or so talking about our overall the AI strategy, how the AI is working into our product base and in CareCloud. So our focus has been on using the AI implementing in the AI on the 3 different tracks, 3 separate tracks. So one is the -- it's a one investment, and it's a 3 economic or you can say 3 economic outcomes. That's our overall architecture. If you look at the track 1, there's some new products, which are the stand-alone AI high-value workflows such as AI and AI into the clinical space. The outcome is here is the new revenue line at the moment as it's not showing as a separate into our P&L. But as we grow and as the implementation keeps taking place, we should be able to show that revenue separately. The track through, which is implementing the AI into our own operations behind the scenes where Crystal is going to talk about a little more as part of our presentation. This is where we can see the outcome in the margin. We can see the same employee can do a lot more. We can have AI to generate the deals. So there's a lot of workflows where the AI is working behind the scenes. The third one is the AI -- embedding the AI into our existing product base. As you already know, we have the EHR, the practice management and now the inpatient after the medSR acquisition, the whole product suite. So the team has been working on implementing the AI, embedding the AI into the existing -- the product suite that we have. So the outcome here is the more stickier relationship. It shows up in retention. The clients who are using it, it's making our products more competitive while comparing with the other competitive -- the competitors. So economic outcomes, so I just want to make this one point here. So this one implementation of one track derisks the other. So even if there is some delays in the implementation, we are still getting the benefit of the AI into the back-end operation or getting the AI benefits into the -- it's still creating -- improving the retention rate and creating more stickiness there. So that's our overall AI strategy. It's not -- none of these are the bolt-on AI strategy that you come in and build a product and try to connect and sit there on the site as part of a separate line for the business. In our case, it's part of the workflow, it's the layer on top of who we already are, whether it's the operations, whether it's the product base, it's part and parcel of our overall company, the overall -- the product and the services strategy. Can we flip to the next slide, please? So where it shows up, that's one of the question always being asked in the P&L, the same 3 tracks. If you look at the track 1, the new products, that's a new revenue line and it's recognized as deployments ramp through 2026. Future weighted by design, that's the one that shows up the latest. The second one is the back-end optimization that shows up in the cost to serve gross margin, operating leverage. This is recognized today already in the run rate and expanding. The track 3 embedded AI that shows up in retention, net revenue retention, expansion inside the installed base and recognized continuously progressively, and it strengthens the core a little more every quarter for us. wo of these 3 tracks strengthen the existing base before they ever create a new revenue line, and that is the most what is moving today. So these are the 2 from the new -- even though there are a number of other products that we are working on. These are the 2 products that are in production today. The first one is the Cerus AI notes and the Assist. Another one is the Stratus AI, our front desk agent. On the clinical side, so what it does is it listens, it summarized and converts that into a clinical documentation. It's a smart solution. It's just not simply a transcription solution, but listens and converts into a transcript. It looks at the social history of the patient, the previous medication, the previous charts and converts them into a more precise summarized compliant chart for that provider. We have seen that it can help saving about 70% of time into the clinical documentation. 49% reduction in after-hours charting, which is one of the biggest problem in the health care industry today. And the 7% more charts can be done. We have seen this through the experience through our customers today. This is completely for us and integrated similar to any other solution. It's part of our EHR and the practice management platform. It's not a separate where you need to copy and paste all the information is part and parcel of our EHR platform. The second one is the Stratus AI, the front desk agent that administrative, which is many times has been one of the most neglected area. That's where most of the problems, the staffing issues and the real problem starts at the front desk. So it's basically agentic AI voice agent that intercepts the call, it listens to the call, -- in our initial deployments with the customers, we have seen that up to 80% of the end-to-end calls are being handled with [indiscernible] AI solution. It can handle the scheduling. It can take the prescription refill calls, it can take the lab inquiries, it can answer the general questions in a very human-like way. There are 0 hold time. It can speak and understand 30-plus languages. If you are -- if a call is coming in, in 2:00 p.m. during the day or if the call is coming in at 2:00 a.m. in the night, it can be handled in the same way at the same second at the same expertise. The only difference is that if there is an escalation in the night, you may not be able to have an office staff number available. But beyond that, everything else can be handled through the Stratus AI. So these are the 2 that we are -- our flagship or the 2 key products that we are -- that we have on the portfolio. It's again, it's tightly integrated into the existing platforms in the EHR system. So the agent is aware of if the patient is calling who the patient is, what's the clinical information, it's completely connected with the platform. Go to the next, please. Now this slide, I think it's just to -- before getting into that 1 million plus the projected call volume number, just to put the things in perspective. This is -- the first thing is this number is based on the contracts we already have signed. These are the Stratus test agent under the contract today across the installed base with deployments actively in progress. This is not a pipeline number or not a hope, it's a paper that exists today. The second one is this builds over roughly 6 months of a ramp-up. Deployments move through a trial period into production of about 30 days. So the clients have an opportunity to evaluate this, look at it. And if they think that this is something useful for them, they can continue. Otherwise, they have an option to exit within the 30 days without being liable for long-term contracts. With that, so what we already have signed, once it's ramped up, the projected call volume for those -- the practices that will be handled, the call that will be handled through our stratusAI is over 1 million calls in a year. This is a full ramped up annualized call volume projected number. And it's not that we have stopped signing, but the purpose here was just to give that there's no lack of interest from the customers. So the moment they listen to the call, they listen to -- they experience the quality of the call, we continue to -- they continue to opt in and we continue to sign the contract. And just one of the quality matrix here, one of the customers after completing the 30 days trial, they themselves said they want a 2 years contract. They won't even sign less than less than 2 years contract just to have a longevity as part of the contract. They did see the value -- how effectively the stratusAI is working. Next slide, please. Okay. Now just talking about the same back to the SAI nodes I was talking about before. It's similar to us has been the proven entry point after proving its abilities into the ambulatory space after the acquisition of Mediphere, the team is actively working on integrating this into the ED and the inpatient and which is the product of the Wellsoft in that space. It's actively in progress, and we are on track to get it delivered in the second quarter -- by the end of the second quarter. This will help us -- this is one of the proof point after acquiring the companies is not just the revenue we are looking into. It's taking that technology and how we can layer and integrate our AI technology into that platform, which can multiply, which can create that further flywheel impact that Chris was talking about earlier. So we are on track. We are working towards implementing the clinical documentation. Our Stratus AI, the FDA is also in progress. Even if we have a signing today, we are in a position to do the deployment of Agentic AI voice agents as well. Next slide, please. So just a little bit into what's coming next. I don't want to oversell on this because these are the things that we are -- that we have in progress and the goal for during the 2026. Those are the 3 major areas. One is the AI prior authorization, which is one of the more significant administrative burden in health care. So it predicts when the prior authorization is needed. It collects it pulls the required information from different places in the documentation. It compile it in the final format and then routes it to the right payer. And after routing it to the right payer, then it keeps a track of it if that authorization has been completed or if it's needed, we can track that. The second one is the AI assisted with the medical coding. This is where a basic coding even that does exist today into our cirrusAI notes application. But when it comes to more complex specialties like radiology or ophthalmology or surgical specialties. So our team has been working on with the leveraging of our years of data and the AI technology, where we should be able to either take the medical documentation and digital formats or the ple formats, AI can analyze it and convert it into the right medical diagnosis and procedure codes and also suggesting the modifiers to be appended. So those can be reimbursed effectively at the level it should be reimbursed. The third one is we are extending. We're expanding further our cirrusAI notes application because each specialty needs some further optimization, the more complex like neuro surgery and the like, they're going to need a lot more training and a lot more complexity. So our team has been working on focus -- this is another one of the focus for the 2026. Go to the next one, please. And this is -- I'll just quickly go through over this because this I'll leave it for Crystal to talk about it. So our approach on the back-end operation, this is our track to. We are -- we have implemented our AI behind the scenes in the RCM operations, financial and administrative functions, whether it's about reducing the claim errors before any claim gets submitted. It's our AI-based claim scrubbing engines that look at the claim and look at the rules of even that specific payer and highlights, okay, this claim will not be paid or cannot be paid. So it flags it where it can take an appropriate action, it can automatically take the action and fix the claim before a claim can go up. The second one is improving the documentation, increasing the first pass acceptance rate with the payer as if the staffing is done effectively, if the fixation is done effectively, it will help improving the first-time pass rate with individual -- each payer and the higher volumes with the less site accounts as our M&A engine is expanding as the organic growth is expanding. This will help us keeping with the less number of staff members and still be able to deliver more because a lot of work can now be handled and supported at a higher quality with the AI. And this is helping us basically move towards starting to track the lead indicators instead of the lagging indicators, which have been of the -- we think are the of the past. It's the lead indicators that how many touches were done on the claim before the claim gets if you look at it, the first-time pass rate could have been good, but if you have touched the claim 5 times before achieving that first-time pass rate, it's not as effective as if the claim was not touched at all and still achieve the same first-time pass rate. Our North Star zero touch claim from prior authorization and the intake took place with the help of an AI, the prior authorization kicks in, take the prior authorization, convert that to the claim. AI does the coding, scrub the claims, convert it according to the requirement of the specific payer, send it out, post it end-to-end, no touch. not happening tomorrow, but eventually, I think this is where with the help of AI, the industry is moving towards. -- this is just -- we also have started to extensively focus on leveraging the AI into our software development teams, whether it's the various tools everyone -- I think everyone has been speaking about in the industry, whether it's the Microsoft Copilot or it is the [indiscernible] and the like. So the team have been actively adapting to those new tools. The outcome is simple. It helps in designing. It helps in code reviews. It helps in analyzing the code for -- from the QA standpoint. It provides a higher code quality and it helps us produce more output per engineer. Next slide, please. This is the third track, which is embedding the AI into the existing -- the client base -- sorry, the existing product suite that we have, multiple EHRs on the ambulatory side, EHR and CareCloud charts application. We are expanding into the inpatient inpatient product suite as part of the medSR acquisition, incorporating into the practice management, things as simple as summarizing the charts, things as simple as providing the recommended and suggested diagnosis code at the time of the treatment to the providers for that specific patient, showing up into the patient check-in apps at the time of the check-in asking the basic questions from the patient and AI can guide the best next questions from the specific patients to be asked. So by the time the patient walks into the room, the system already has created a draft of the of that chart for the patient. This is what we are calling it basically an invisible AI in many cases. It's just the system will start doing more for the same medical provider. So it's behind the scene. It's part of that product that the clients are using. And we are -- this medSR and NAA integrations are taking place at the moment. Next one, please. Inpatient portfolio, the 3 areas, Wellsoft and cirrusAI, ambient clinical documentation and emergency and department -- emergency department workflows Marketware AI, turning a physician recruitment relationship tool into an AI-powered recommendation engine. Wellsoft and [indiscernible], which is our patient Breeze patient engagement tool. We're extending the patient experience and engagement layer into the ED with the clinical data transaction synchronized across both platforms. Three integrations, 3 different users, all in active development this quarter. This is what it looks like when an acquisition stop being just line on a time line and start an AI in a clinician's hand. Next one, please. So these are some of the things that we are focusing, just to summarize everything for Forward 2026 milestones. We will continue to -- on the agent expansion on the stratusAI. This is making sure if, let's say, the agent for appointment scheduling has been deployed, but the prescription agent has not been deployed. So there are more agents each customer that we need to keep on deploying and expanding. We will continue to sign more contracts for Stratus AI as we move forward. Incorporating our AI into the inpatient product suite that we have as well other products. That's the cirrusAI and Stratus AI. And then in the pipeline, the upcoming the 3 products I talked about between the authorization, AI-assisted coding and additional documentation. So at least one of those 3 for the general availability. And we are very confident that all 3 should be at least be available for the first evaluation customers that we use during 2026. Completion of the integration for medSR, there's a lot of technical debt that we need to -- that we had to take care of, which the team have been extensive and aggressively working towards it to completing that integration during 2026. And then the lead indicated transparency as we start to show the results -- as we start to see those results of the lead indicators with the help of AI implementation behind the scenes at the back-end operations. So we should be able to start talking about in terms of numbers, those lead indicators. And Chris will be sharing some of those numbers today, but more continue throughout the year, how we are progressing towards how those -- the outcome is being converted into those metrics and the numbers. Perfect. And thank you. And we have, as Steve mentioned, introduced Dr. [indiscernible]. I would request just come and say a few words. He has been our customers for [indiscernible] agent. one of the initial users of that product. So it would be good to just hear direct from his [indiscernible]

Thank you. Good afternoon Again, I'm Dr. Russell Holden. -- my notes written if that's okay. I'm a physician in private practice in Florence, Alabama. After a Vanderbilt, I've been in private practice since 1995. My practice is focused on pulmonary and sleep and critical care medicine. My clinical team cares for a large number of patients on a daily basis. Since starting my practice, I've had 3 electronic medical systems. I was an early adopter in the early 2000s. I was of 3% of physicians that had EMRs at the time. And almost my last system before CareCloud was functional, but very basic. Almost all of our administrative tasks were analog. We had human scribes, and they were very good, but they got carpal tunnel, their children became sick, they could show up to work. Staff answering fumps when they could long wait times, we had missed appointment rescheduling. Our lab data imaging results had to be manually input into our system. And my front desk people did their best, but the manual intake forms and insurance verification, high-volume phone calls made it impossible for them to keep up. No matter how many staff we hired or how we arrange the workflows, the administrative burden precluded our ability to provide optimal patient care. And so this is unfortunately a common story in many medical practices even today. I adopted the CareCloud platform in October 2024 at the suggestion of my business people at LBMC in Nashville. And since then, working with the CareCloud team, we systematically addressed most of these administrative problems. Our patients can now use a Breeze app on their phone or tablet to get online scheduling. We can perform insurance verification before they arrive. The patients can update their clinical histories before arrival. They now get automated appointment reminders. The patients can now communicate with our office staff via text and e-mail. And all these developments have significantly reduced the workload of my front and back office staff. Once in the exam room, -- most of the patient's labs and imaging data are already in the patient's chart via interfaces with our local hospitals, Quest Lab, LabCorp and local imaging centers. Manual input for these tasks are now virtually 0. And I now have an AI scribe, which when I use CareCloud cirrusAI, the clinical information is captured in real time, integrates into the EMR. It's a life-changing timesaver. I mean, I believe you said 7%. It's really 100% charts closed in my office at the end of the day. We can close the trucks quickly. This allows me to focus directly on the patient and their concerns without having to look at the computer. And I'm very excited about the CareCloud's development of AI agents. In December of 2025, we deployed the Stratus AI automated front desk Assistant. And we named her [indiscernible], and we were able to give her a southern accent that she could talk like me. And so -- and in fact, it was really odd. We had patients coming in asking to speak to Stacy, and they thought she was a real person there. So successful scheduling, 83%. We did 3,608 calls in 1 month. Stacy handled 1,871. But I think importantly, the empathy expressed was 87%. So the patients felt that empathy from the AI, which I thought was interesting. It wasn't without some problems in all honesty that Stacy would sometimes double book appointments. We initially did not write our phone system properly, and that led to some miss phone calls and setting up the appropriate KPIs to measure success took some time. But most importantly, from a patient perspective, we've had some objective measures indicate since we've changed the CareCloud, we feel as though their care has improved. I'm embarrassed to see our previous patient satisfaction scores were 2.5 out of 5. I'm embarrassed to tell you that. The main comments that while they thought the medical care was excellent, the office experience was terrible. Since adopting CareCloud, our patient satisfaction scores are now 4.7 to 4.8, and they continue to go up. Many of our patients have communicated to me that their office experience is much smoother, much more efficient and with less wait time and increased attention to their medical problems. And I think the main driver, the main driver of these improvements, we now have a better practice management system in CareCloud that allows us to measure areas we need to work on in order to address patients' concern in a proactive way. Our next future phase will hopefully be to deploy outbound AIH particular tasks. We specifically plan to focus on our CRM or customer relation management using outbound agents to remind patients who've not followed up in a while and to provide them information about upcoming things that they can help with. I'd also like to use outbound agents at some point in the future to focus on specific population health needs for our community. And finally, I just want to acknowledge the development team, [indiscernible] and you guys, I mean, amazing work, and they've accomplished a truly transformative for my practice and a great partners for. I appreciate it very much. Thank you. Thank you [indiscernible], and it's great to hear about your experience to be here in person.

So I'm Crystal Williams, and I'm the Head of our client success operations and revenue cycle strategy. So I will talk about how we're using AI within operations and how that's translating into operational metrics improvements and client satisfaction. So let me start with some operational metrics that best reflect our progress across our platform. One of the strongest indicators of operational maturity is the claim quality at the point of submission. Today, our first half claim acceptance rate is 99%, which is outperforming traditional best-in-class benchmarks. That performance reflects the optimization of our AI-driven validation, payer intelligence and continuous workflow optimization. It's embedded directly in our operational model. So I'm, first and foremost, a customer of the AI team and consistently giving feedback and tweaking it and working as well with that group to make sure that it's being optimized. What's most important is that we're proactively preventing issues before the claims submitted rather than after the denials are occurring. This accelerates reimbursement cycles and creates a better provider experience. Insurance denials remain to be one of the largest operational pain points in health care. And through predictive analytics, intelligent claim scrubbing and payer behavior modeling, we're continuing to reduce avoidable denials earlier in the workflow, and you'll hear more about that when you hear it from Fox. Today, our denial rates remain below 5%, which is also exceeding the best-in-class industry standards and reflecting our effectiveness of our operational discipline in AI embedded workflows. We believe these capabilities becoming increasingly valuable over time as workflow data and payer intelligence continue to become accumulated. What makes us different is that our AI capabilities are embedded into our operations, our technology teams, our operational leaders and frontline billers continuously refine our workflows using real-time operational data and payer feedback and our clients reap the benefits of them.

Go to the next slide.

As we evolved our operational model, we also recognized that the industry needed to adapt how we were measuring success. As for years, revenue cycle has been measured on lagging indicators and what happened after the fact, for example, AR days. We believe the future of revenue cycle management is predictive, automated and increasingly driven by leading indicators. So in order for us to determine how effective we are being with AI, we took a baseline in 2025 when we started the AI division. And what we determined as part of that is since implementing those measures, we've seen -- already seen meaningful improvements in trends. We expect those to continue as automation matures. So one example, as [indiscernible] talked about earlier, is zero touch rate. So this measures how many claims go through the life cycle of revenue cycle from the point of entry to payment posting to claim submission and ultimately payer adjudication. Since we've taken those measurements, we have increased the zero touch rate by 7%. This creates greater consistency, scalability and faster processing cycles. Now although the long-term objective is increased automation, we all know that the health care revenue cycle and insurance industry remains highly regulated and complex where human expertise will always play an important role. That's why we're closely monitoring that first touch payment performance. It reflects how effective our teams are when manual intervention is required. Since AI deployment, we have seen a 6% improvement in our first touch payment performance, helping accelerate payments and drive client cash flow. We believe this represents one of the defining shifts occurring within the RCM industry, moving from a labor-intensive processing model to more intelligent workflows, orchestrating and leveraging our operational leverage. Now operational performance matters, but ultimately, it only matters if it translates into stronger client outcomes and long-term partnerships. At CareCloud, we believe client retention is not just an account management function. It's the outcome of execution, responsiveness, transparency and trust. We've invested heavily in our client health monitoring program, which combines operational, financial support and engagement indicators to identify risk earlier and intervene proactively. This allows us to move from a reactive service recovery to a predictive relationship management. One thing that separates CareCloud is our executive involvement. Our leadership team remains closely involved in those complex strategic priorities, especially within our complex relationships. Our governance model is highly collaborative, cross-functional, bringing our operations support, product and leadership teams together to create tighter alignment on our products and services. In parallel, our voice of the client program creates a direct feedback loop between our customers and our product evolution, helping prioritize workflow enhancements and automation initiatives. Over the past year, we have seen measurable improvements in our client retention, and we believe the market is increasingly looking for strategic partners that can combine technology, automation, analytics within a one single ecosystem rather than fragmented solutions. But ultimately, the best validation of our strategy and performance will come directly from our clients. So I'd like to introduce Anthony [indiscernible]. He is the CEO of [indiscernible].

Executive engagement and complex relationships, and then they introduced me. So that's great. And for the record, doctor, I'm a clinical doctor of physical therapy, the CEO of Fox Rehabilitation. So happy to be here with everybody. For the record, when I went to physical therapy school, presenting at the NASDAQ and the suit was not on my bingo card. So I got wage listed from Temple University for physical therapy. So someone can like take a picture and send it to the program. That would be really cool. A little bit about -- I want to thank the CareCloud team, you can take the picture for having us to be part of this milestone today for the company and for the partnership that we both have. So who is Fox? We are an outpatient physical therapy, occupational therapy and speech language pathology provider. to the geriatric client in the home. So our average patient age is about 83 years of age. These are patients for us that are like right on the tipping point of institutionalization. These are the people who need our care the most, and we need to be able to get the access to the care that they need good aggressive outpatient therapy services. A little bit about the size and scale of the practice. We're greater than 5,000 clinicians now in 38 states plus D.C. From a volume perspective and scale, greater than 4 million visits annually right now. We provide care in residential communities, homes, patient centers as well as 1,500 -- greater than 1,500 senior living community assisted living across the nation. You can see our patient satisfaction score of 98% Care. You can see kind of our service mix -- we -- when we entered the market, we're very disruptive. We're not traditional brick-and-mortar outpatient therapy services. We provide a different product 28 years ago when Dr. [indiscernible], our founder, really came upon kind of like, boy, there's a niche here that's needed in the health care market. And that's great in many ways as we sought to scale this organization. But on the flip side, there really weren't a lot of like out-of-the-box solutions to the problems that we have to be able to have a remote workforce of this magnitude, right, doing what it is we do. So why did we engage with CareCloud, right? We had an EHR system, a legacy system, a bit antiquated, but we really needed solutions for the front end and back end of the organization. So we'll flip to the next slide. These legacy systems just simply weren't sufficient -- we were looking for a partner that could handle a lot of different things and technology enabled and was nimble. We were different in this space and disruptive. We needed someone to come into Fox and actually help evaluate the journey that our therapists were going on, evaluate the journey that our patients were a part of and help to answer some of the challenges that we face. The electronic health record itself was okay, but we really didn't have the capabilities from a tech perspective on the front end or the capabilities on the back end to really handle RCM at the scale and size that we needed. So you can see here on the outset of the partnership, CareCloud came in and really identified with us in conjunction with us, in partnership with us, a series of deployments to help us really on the front end. And I think that circle there represents a lot of different things. If you look in the far right corner, you'll see just one note, [indiscernible], just an example. right, an application and app that all our therapists have that allows us to sort of like geo monitor where they are, track it with relation to where the patients are, optimize patient scheduling, right? You can imagine the efficiency of trying to figure out where a patient lives and get your therapists nearby and can go to see it and then make that scheduling all efficient. That simply didn't exist in our space and the partnership with CareCloud that's one example of a great number of others that this partnership has been able to execute on. Really, what I was seeking is if we -- an out-of-the-box solution from a front-end experience in our practice through the end. And what the CareCloud partnership allowed us to do is stay with the electronic health record that we were comfortable with, which was growing in their own right, but answer the solutions on both the front and back end very effectively. And has allowed us since 2017 to scale fairly significantly. to the next slide here. So just some supporting metrics around the performance of the practice as we scaled. You can note -- I think you were saying you're seeking to get inside 5% denial rate with us right now, we're at 1.5%, which is pretty good. I know we were greater than 5% before this relationship. I'm not proud to say that, but it was what it was. Electronic claims, 99.96% essentially claims are untouched at this point. I know we're trying to get to that 100% mark, and I think we eventually will. First pass reduction, as you talked about earlier, 9.74% and ERA adoption, 98.95%, all significant in the space with respect to our performance on the RCM side. From a growth perspective, since the engagement, our admissions are up 166% practice collections up 12%. So really great partnership with respect to answering the call for who can come into [indiscernible] and really help us support our ability to touch more lives and serve the patients who need us. So what's the future look like? We'll go to the next slide. Obviously, we're talking a lot about AI. We're putting AI in our clinical notes currently in the process of doing it, but really trying to leverage AI as the team has already discussed on the RCM side. There's even more opportunity there for us. There's certainly probably more opportunity on the front end on the scheduling and communication with patients and clients, which you guys already do a lot of the communication with our patients. I would say the thing that my team got the most excited about recently was the example of looking at appeals management using this AI technology. And understanding CMS regulations, right, in such a way that it could look at the appeal, help us develop the appeal and actually write letters without having to involve manual individuals kind of writing and creating let. You can imagine the efficiency creates for our team. So I know our team is extremely excited about the AI focus that the team has, and we're already seeing great performance enhancements as a result of it. In closing, under Stephen Snyder's leadership, CareCloud has been an outstanding strategic partner to Fox and lockstep with Hadi Chaudhry, Chief Strategy Officer; and Crystal Williams, President. Our team has been consistently impressed with the support and relationship we have maintained with their executive team from the very onset of this relationship, which was super important to me. At FOX, culture is very important. Our mission is to believe in the strength of people to live better longer. It's our job to providers with the tools necessary to take care of our aging population. So my expectation within our practice is anyone from CareCloud is expected to be part of the team and accountable as part of that team to one another for the success, the spirit of team. That brings me to [indiscernible], Division President, SVP of Integration and frankly, Fox employee 5001 as far as I consider it. I'd be remiss if I did not highlight the critical role that Lorraine has played in fostering and managing this relationship and partnership with frankly, Surgical Excellence. Lorraine is FOX. She's part of our team and bleeds Orange. This is obvious in our interaction and in her interface with our executive team. Steve and team, you have Jim and Lorraine. I'm certain you're aware of that. I've said this many times already, we wanted a partner here in this relationship, not a vendor, and CareCloud exemplifies that to not just myself, to the entire team here at Fox that we both view this as a partnership. So I commend our executives for speaking to this in a similar fashion. Even when we have had challenging conversations about future paths, they assure me the right people are aligned with our executive to drive our growth. And CareCloud understands our success is their success. Said simply, CareCloud is part of our practice. To that end, congratulations to CareCloud and yet another exciting milestone. We look forward to the continued growth and success of Fox and CareCloud as we together seek to provide the highest quality functional primary care to help our age population live better long. So thank you.

So we're also honored to have with us today Dr. [indiscernible] Masoud. He's Chairman and CEO of [indiscernible]. Dr. Masoud has spent over 35 years advancing patient care, driving innovation in home and infusion therapy and helping improve outcomes for patients.

Good afternoon. I will try to go through some of the points. And part of the presentation I have may not be that detailed about what we are doing with CareCloud because I have a whole lot of members at [ KabaFusion ] who deal directly with CareCloud team and Lorraine has done a wonderful job with cabo as well. So thank you for mentioning her. So just a quick background on me. I came to USA in 1981. I was 19 years old, so about 45 years now, 45 years old. I started my schooling at University of Southern California in Los Angeles. In 1988, I got my doctor Pharmacy. In 1990, I was working at Gram Maran Hospital, where I came across an excellent neurologist, and we started the very first 2 patients with neuromuscular diseases. At that time, we call it progressive muscular atrophy, which was eventually diagnosed as CIDP. And those patients, they were both wheelchair bound and they got up and they started walking. So that was really my start of home infusion industry. Then 1992, I quit [indiscernible] Hospital, and I started my first company called [indiscernible] Healthcare. Within 12 years, I took it to about $100 million in revenues. I brought in the investors and decided they wanted somebody else as the CEO. So I exited and a new CEO came in, didn't do a very good job. But eventually, the company was sold to Walgreens. Then my second company, I home infusion pumps. So first company was home infusion, providing patient care at home. Second company was building infusion pumps, and that in 2007, I sold it to Baxter International. And then 2010, I started KabaFusion. So Kabafusion is same like Crescent Healthcare was. So I started in Los Angeles in 2010. That was my first pharmacy. And now in 2026, we have 33 offices nationwide. We provide patients at home with intravenous drugs and nursing, highly skilled nursing. We have about 2,000 employees in the company. And recently, we had a change in partners. So the new partners coming in valued the company at $2.2 billion. So that's pretty much our growth in the last 15 years. But we are looking at another 4, 5 years and valuation to at least double. So we are looking at $2 billion to $4 billion. So this is really the background on CA Fusion, how I came across CareCloud was very interesting. I was introduced to Mr. Hadi [indiscernible] of Pakistan. At that time, I didn't know much about CareCloud. But when he told me about the civic engagement of Mr. Hadi in Kashmir area of Pakistan, which is a very kind of poor side of the country, I came from the bigger city called [indiscernible], never visited Kashmir about it. So when I heard about what CareCloud was doing with the local population, I was very impressed with the civic engagement that they were doing. And I knew that if somebody is that dedicated to human being, I can trust them with my business until 2023 when CareCloud came, we didn't ever contract out any services. So really CareCloud opened the doors for us. When it came in, we were having a little difficult time with our revenue cycle management, and that's how we started our relationship. So when CareCloud came, our bad debt was about 6%. So imagine the dollar amount or 6% of that dollar amount was huge. With CareCloud help from the intake side to the billing, we were able to reduce the bad debt to 1.5%. And we believe that very soon, it will be 1%. So if we are around 1%, we'll be very happy. So CareCloud has done a great job. We started with 5 employees. We're not very sure what will happen. Now we have more than 100 employees. And the way I'm looking at it, CareCloud number of employees will continue growing. The team, not just for myself, but the investors, they have trust in CareCloud and what they have done so far. So I think that there is a lot more that we can do. We are in the process of acquiring another company. The revenues are about $600 million, $700 million. So I know that CareCloud work will go more. And hopefully, that will bring good revenues to CareCloud and scaling of the revenue cycle at KabaFusion. So CareCloud team, they have done -- besides RCM, they have done intake, benefits verification. They have really driven efficiency and they have scaled KabaFusion's revenue cycle operations to a point where we really look at CareCloud first before we think about hiring other people. So that drop in the bad debt has led to us looking at what else CareCloud can do for us. So we're looking at on the technology side, what CareCloud can do. And we are looking at our home infusion industry, and a lot of people may not know what home infusion industry is, even though it has been around for 40-plus years. We provide patients at home with nursing and intravenous drugs. And if you really look at it, patients who need those infusions and if they have to go to a doctor's office or if they have to go to the hospital setting, number one, it is very costly. Secondly, patients have to really go physically to some place to get it done. Here, we send the drug, we send nurse and all those kind of things. So even though the industry is 40-plus years old, the technology is very primitive in our industry. And when it comes to pharmacy software for the home infusion part of it, is not really up to standard, and that's where I talked to and Stephen, and we are looking at really developing a new software, and I think it will be the state-of-the-art for our industry. I asked them to name it [indiscernible], which is my daughter's name. So hopefully, we will develop over the next 9 months to a year if the laws agree and sign the contract. And I know that is the hardest part of this deal, but it's going to happen soon. So my feeling is that once we have that software up and running, we will really revolutionize the home infusion industry and not just for us, we will be able to go and offer the software to other home infusion companies and revolutionize everything because right now, it's very primitive like I told you, the billing and collection alone, we were losing 6% of our revenues, and that was a big chunk and thanks to CareCloud, we were able to cut it down to 1.5%. So all in all, we are very satisfied with CareCloud, their personal relationship with us, with our employees. They're always there. One day, I was sitting in the Board meeting and something came up and I said, oh, we don't have a solution for that. Let me call Hi. I call him, he came on the Board meeting and we found a solution. It was simple, how to take the credit card and build the patient score. We didn't have that system in place after 40 years of running the company. So we are really looking forward to CareCloud to be an integral part of KabFusion and not just in revenue cycle management, but from the beginning, from the intake to pharmacy to nursing, to billing and collection to denial management. I think that there is a whole lot of things that CareCloud can do for us, and I'm very proud of our relationship. Thank you very much.

Well, I really appreciate it. I can't thank you enough for our customers taking the time out of your day to come here and share with you -- share with the broader attendees a little bit about your experience. So thank you very much for all 3 of you, really. It means a whole lot to us. Thanks a lot for the team. Q&A. We'd love to answer any questions that you might have. And we may pull up other members of the team upon the nature of the question, but who wants to go first?

When I look at that and I see things like the note taking and stuff, there's so many companies out there that are using AI like diagnostics and medical things. Is that something that you would get involved in where like look at the notes and look at your history and your blood test and we think this person whatever -- or is that just like not a thing that you would.

That's a great question. It actually is exactly what it does today. So it listens to the patient doctor conversation. And when the conversation ends, it first of all, takes out the noise and like how was the weather, how was the commute and stuff like that. Then take that converted note to your point, go into the history of the patient, whether it's the social history, whether it's the medical history, medication and everything, take that merge that together and then suggest and recommend the next diagnosis and the procedures for the...

It does that.

It's actually touch with the doctors.

And that's where we have started -- there is always an initial adoption. challenge can it really work? It's an AI, but we're not replacing the doctor. We're just recommending and suggesting the full chart. And at the end of the day, it's the doctor who has to review and sign off on it. they have an ability to edit anything so they can do it if they want to. And if we think if everything is okay, they click on it, save it and move on.

Would you work with a company that like our experts and whatever that is like to bring in their product of your product?

I don't know maybe if I'm not misunderstanding the question. For us, this product is not a bolt-on. This is part of the workflow. This is how we design it. We don't see a reason to be integrating any other company's product into the system. But if there is anything niche that comes in, which we don't have, we will be open to it to integrate into our platform. But at the moment, we don't see the need of it at the moment.

And I hate to put you on the spot address that. We're not worried about that.

At this point. I mean the adoption for things that work is very risk for. What I think they're developing here is an assisted tool that helps to give us insight and information. It doesn't supplant or replace what we're doing here at this point. There may be a time in the future where that could happen. But the reality is I think it's a little way off that despite a lot of other people not about [indiscernible]. Despite the press. I think we're ways off from that. But yes, I think -- I hope that's helpful. But it really -- it helps to focus things a little better in terms of the discussion with the patient so that it gives us a little bit more of a summarized insight and some suggestions. Excellent. Very good.

Comment on the competitive environment, like who else you're buying up with and why you guys win? For sure, for sure.

So I think if you think about the competitive environment, think about companies like ECW, think about companies like [indiscernible], AdvancedMD, these are all some of the companies that we're regularly competing against. And if you think about our overall solution set, you can break that down a little bit further. So you have EHR practice management and patient experience management. So you have the SaaS solution. But then we also have the product suites or the solutions that we provide end-to-end revenue cycle management, coding, credentialing and so on and so forth, which are all still powered by technology, many of them powered by AI. But ultimately, there are services that are ultimately provided that involves some element of human capital as well. And then separate apart from that, we have the AI solutions. So to be able to answer that, we have to kind of break down each one of those. But I think the closest competitive from a competitive perspective would be [indiscernible] and [indiscernible]. Question is why are we winning? Why do we win in those sorts of scenarios? And maybe I'll let Chris jump on that. But I think that oftentimes, it's in terms of the comprehensive nature of our overall solution. So you don't need 3 different companies come to the forefront with different solutions that have to be all integrated. So especially for a smaller or medium-sized practice, we have a fully integrated solution that incorporates the service that's end-to-end and incorporates the entire technology suite, the clinical part the practice management part and also the revenue cycle that makes all work from a collections perspective. So I think it's a fully integrated nature of it, also a price point. We're one of the lower price points in the industry. And I think the third thing would be the ability to -- on top of all that to provide an AI solution that likewise is fully implemented. I think Dr. Holt was referring to before being able to provide Stratus AI or being able to provide other AI solutions that are fully integrated.

Looking for productivity from AI. But then there's the cost of AI are kind of expensive for some. How do you think about the cost of it versus the benefit you're going to get?

I'll get started -- so then Hadi can do a better job than I can in terms of answering this question. But I'll give you just a high-level framework, and then we'll go down and then Hadi can jump in. So if you think about it, we have 150 AI team members as part of our AI center of excellence. So you say, okay, well, what's the expense associated with that? Well, the overwhelming majority of those team members are working at our offshore location where the cost of labor about 1/10 of the cost of someone who has the same sort of education, the same training, but it's situated here in the U.S. So we use that labor cost advantage to our advantage so that arbitrage yields us dividends as well. That's part of it. Another part of it is it continues to compound so that candidly, our initial thought process was build an AI center of excellence with 500 people, about 1.5 years ago. But it didn't take long as time goes on to realize you can do far more and you can create more and compounds because of technology itself helping you do more. So from a coding perspective, a large percentage of the overall coding and the upgrades and the like with regard to our existing platform is now done through -- certainly through AI-assisted coding, [indiscernible] coding and the like. So if you take that same principle and then think about it from an AI perspective, for us, we have a highly cost-efficient workforce would be one. And secondly, for us, we're embedding this AI into our platform. It's making our overall platform more sellable. It's increasing the overall retention rate because it's a more usable multifaceted platform. And then we have a separate revenue generator through the AI solutions.

Given and everything is basically -- these are the same 2 strengths we have been talking from day 1 and our narrative for being public, this global workforce, cost competitive intelligent, the same that Steve mentioned and the second one is this proprietary technology. So the 2 together, we are building AI to support our own entire end-to-end platform. We're not building an AI solution to go and try to integrate and sell it to someone else primarily. So that will be much more expensive than just operating into our own proprietary technology. So the 2 together, Steve mentioned, that's how we believe [indiscernible] Yes. Early in the presentation, I think it was you talked about your acquisition targets and the evaluation process you go through and what you want to see out of them. How do you go about that? Do you use an outside firms of some kind to help you with that evaluation? Is it all internal? What's the process?

It's really all internal. We've done 25 to date, and it's been a pretty consistent team. We're evaluating it from an operational standpoint, from a financial standpoint, from a technology standpoint. So we pretty much do it all ourselves.

Got it. Got it, Dan. I was wondering just with the AI development of new tools across the business...

I was wondering if you can talk a little bit about the process in terms of doing concept to deploying new products, what that cycle looks like in terms of length and then how you just like organize the 150 personnel you have across these products?

So I think the real first thing with our advantage is we are building AI solutions for the industry, for the business that we already have been running for the last 25 years. So we are not stepping into a line of business where we are just developing an AI application without understanding the industry for which the AI is being developed -- we know the pain points. We understand the workflows for the decades of experience into this. We know the deficiencies of the system. We know the pain points of a front desk as an example. So that's where that knowledge, that experience is helping us, but there is our advantage when we come and develop those applications. So that's from where these ideas are coming from front desk, that's the first administrative bottleneck for a practice. Patient engagement, another bottleneck. Administratively, prior authorization in the specialty space, that's one of the serious bottleneck. So we are trying to hit those initial major pain points and the low-hanging fruit in terms of the major pain points in the industry and trying to come up with those solutions. And in terms of managing the 150 people, we have been already managing the 400-plus, 450-plus ITD team members. So we have been -- we have an organizational structure that already existed, the same organizational structure extended into the AI.

Makes sense. And then specifically on the Stratus AI, the front desk agent. I was wondering how you price those contracts? I know you talked about getting to about $1 million in call volume annually under the current contracts. I was wondering if that's priced on a call based on usage or it's just annual and it handles all that structure.

Steve, would you like to take that?

Yes, sure. So you'll appreciate the fact that Stratus AI was launched about let's say, 6 months ago, 8 months ago roughly. So I say that only to say that the answer I'll give now may change in 6 months or a year. Right now, we're pricing that Stratus AI as a per completed call fee. So for every completed call that's managed by Stratus AI, there's a fee associated with that. So it's a per call fee to answer your question. But we're exploring some different models associated with that, too. So...

And as far as acquisitions, are you only looking for companies where you can add customers? Or is there anything out there in technology land that you think might help?

Good question. So technology-wise, we're not looking for -- we're not looking to acquire technology because we have 450-plus IT R&D team members. So we've really built the entire platform from the ground up, and we'll continue to do that with regard to AI. We'll continue to do that with regard to patient experience management, practice management and the like. So we're not buying technology. We're looking for companies that have recurring revenue customer bases. So companies that have already built a book of business, flood are struggling to operate at the scale and size that they're either at right now or having difficulty experiencing growth and the like. So if you think about the majority of the companies we've purchased have been revenue cycle management companies, medical billing companies. But we've also purchased, as an example, medSR was a technology player that gave us an entry point into the inpatient hospital IT market. We've acquired some other technology players, but the threshold requirement is that the technology can't be simply technology. It has to have a customer base with recurring revenue element associated with it.

So to follow up on that, what do you do once you acquire it so that in 3 or 4 quarters, you get to those hopefully 30% contribution...

So we do a variety of different things. The first thing we do is we make sure that in the overall structure and the negotiation of the transaction, we feel comfortable with the overall valuation. We understand the customer base, and we have a high level of confidence that the core customer base will remain on through the transition and the like. So the first thing we do, we make sure that we essentially price it and structure it properly. The second thing we do from the perspective of the overall business, and most of these businesses are operating at breakeven or some of them are operating at a loss. So to your point, how do we take that company that's operating at breakeven or even at a loss? And how do we have a level of confidence that we can transition that to a company that's operating at 25%, 30% contribution margins within 3 quarters. 4 quarters for a larger company. The way that we do that is we -- from the staffing perspective, we look at the overall staff. We understand what the key team members are doing, and we make sure that we provide incentives to those team members who have an ongoing customer-facing relationship and who are positioned to be able to grow the business. So if we think about Dan as an example, Dan was freed up from his day-to-day grind, the day-to-day operational work and the like that he was focused in on and just freed up to do what does a phenomenal job at, which is really interact with the customers, look for new opportunities in the existing base and also expand not only the wallet share of those customers, but also expand into new relationships, so net new opportunities that he purs. So we identify those individuals who can really help us continue to solidify that customer base and then to grow that customer base. But individuals who are handling more of the kind of more mundane type activities. Candidly, artificial intelligence is increasingly stepping in and honestly handling a lot of that, a lot of those appeals, a lot of the data processing and the like. If it's not technology in our particular model, then we're leveraging our offshore team to be able to manage it. So we're able to reduce the expenses and then also able to grow revenue by rolling out our technology and by making sure relative to those customers that they have not simply as good of a service as before, but our goal is how do we add value to those existing relationships, how do we add value through technology and through increasing the overall size of the team and the throughput of technology...

Just on M&A continuing of ask a couple of questions. I was wondering if Obviously, the recurring revenue is the big focus. I was wondering if you show preference towards expanding in new areas such as like the emergency department or other like specialties such as like hearing, you built out that department. I was wondering, do you have a preference between like entering new verticals per se versus building existing or how you view...

Not exactly. Having said that, certainly, I'll use a scenario just as an example. We never -- I don't think we ever seriously explored getting into the hearing health space for a variety of reasons. One of those reasons being candidly, the average ACV per new customer signed is not all that huge. So it tends to be on the lower end of that market. But we saw what Dan was doing, we said, so there is actually an opportunity here if we approach the market a little bit differently. So there's an example of a new approach in terms of a new area within this industry that we're able to do business in that we hadn't followed before. But having said that, I think the truest answer is, no, we're not specifically looking for any particular verticals or the like. Frankly, if a company is providing services to the health care space, especially if it's revenue cycle management, but also it could be consulting services, it could be compliance services, a whole variety of other related services to RCM, and it's a recurring revenue base. And we think we have -- we can add value with our technology and team, and they're a good candidate for us.

I do have a few questions from the chat. I think we maybe have another 5 or 10 minutes, if you wouldn't mind. Awesome. I'll just pick a few for the sake of time. First one is from Jay asking, will you do buybacks eventually? The stock is very cheap right now. And also, it's a 2-parter. Do you have any plans to invest in OpenAI or partner with another AI company?

Today, we leverage a variety of other technology on the back end, including OpenAI, and we leverage Google and the like. We're not exploring any sort of partnerships like that in the near term. That would be the answer to the second question. For the first question, 100% agree, the stock price is really cheap, and we certainly advocate buying some shares in the open market for investors who are interested in our story, are aligned in terms of our overall strategy and think that we're doing something that's worth investing in the space. We're not currently though, investing that as a use of capital. For us, we see those opportunities relative to the use of capital to be more in acquisitions and organic growth and continuing to grow the business.

Okay. And I'll just pull maybe 1 or 2 more. This one is from M. He asks, given the temporary margin compression in Q1, at what exact point in 2026 will the operational leverage from your AI deployments outpace your R&D and integration spend?

Okay. Do you want to?

I would say probably later in the year, obviously, as we get into the third and fourth quarters, I think that's what was saying as we're developing AI and rolling it out, I think you'll see margin expansion in the second half of the year.

And I think probably also makes sense to think about that in terms of the overall medSR acquisition. So we closed the medSR acquisition during August of last year, the end of August of last year. So medSR had a total of 7 or 8 different technology platforms. All of those platforms had pretty significant tech debt, which from a valuation perspective as a buyer that worked to our advantage. But by the same token, there was a lot of work to do, and there continues to be some work to do relative to those platforms. So we had some additional spend associated with those platforms. But the lion's share of that first phase of that spend is really behind us. And I would say from a -- just from an ongoing perspective, you should certainly expect on a go-forward basis for that spend to be reduced certainly relative toSphere.

Awesome. And I think this -- we'll go ahead and do the last one. Dan, this is more for you. So if you wouldn't mind, I get it up there as well. But this is from [indiscernible], and he says, Dan's acquisition story was interesting, jumping from a client a month to almost a client a week, significantly expanding domestic footprint. How much of that growth is driven by CareCloud's broader footprint, creating cross-sell opportunities versus added operational bandwidth, allowing Dan and the team to spend more time on business development? And how does that dynamic compare with and relate to other acquisitions you've made? So it kind of sounds like maybe a little bit of Dan, a little bit of...

Sure. Dan, do you want to go first?

I would tell you that the majority of that has allowed me to do the business development and focus as opposed to looking more wanted to know about the cross-selling opportunities. There's a lot of cross-selling opportunities that's coming our way with what CareCloud has. But because we're a unique office space in the hearing health care industry and what CareCloud currently offers is sort of disjointed because we are separate. Our clients use separate platforms. And until we get to that next level here shortly where we can start taking like a Stratus and attach it to an outside source, that will start to develop and bring us more of that revenue source. But currently, it's the business development side that has been the focus on what we've done because of the fact that we know the industry and we haven't had that reliability on the CareCloud component yet and it's coming, and that's going to open up a whole new channel of opportunity and revenue. And Steve, you definitely have the next part of that.

No, I think Dan hit it all. The only thing I'd add is maybe more generically or more generally, which is the role that AI is playing in this space. AI, of course, is an important component in terms of the overall organic growth. So that's key. Increasingly, customers are looking to understand what your platform is leveraging AI before they make a decision with regard to EHR, practice management, patient experience management. But that same impact is really being felt in the acquisition space because companies that were operating at or near breakeven and had already built up portfolios of customer relationships, they're recognizing the fact that AI is on the cusp of being able to completely reshape the overall industry, not just the health care industry, but reshape their part of the health care industry. They feel the pressure and they're looking for partners like us. In fact, it's Dan and I spoke about initially, which is the impact that AI is having on business owners from the perspective of accelerating their overall exploration of partners to look to and to consider acquisitions with [indiscernible]

And for those who weren't able to get to your questions in the chat, please feel free to reach out directly to the Investor Relations contact, and we can address those. But with that.

Excellent. Well, I just again want to thank everyone who's here today. thank our customers for coming here and sharing our story. Thank our analysts for coming here, your thoughtful questions and taking the time out of your day to listen to our story. The team for sharing your -- the role that you're playing in terms of the overall operations for Bill and the support from the Board. It really means a lot. For everyone from live stream, again, we really appreciate you taking some time. And if you have any questions, don't hesitate to send us an e-mail, we'd be happy to circle back. Thanks so much.