third quarter 2026
Filed Nov 5, 2026CareCloud Delivers Most Profitable Quarter in Company History: Record GAAP Net Income, Record GAAP EPS and Record adjusted EBITDA
Third-quarter revenue increased 9% year over year while GAAP net income increased 54%, GAAP EPS increased 150%, and adjusted EBITDA increased 28% to record levels. The Company reaffirmed its full-year 2026 revenue, adjusted EBITDA and GAAP EPS guidance while reporting debt reduction and operating efficiency gains.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net revenue, three months ended September 30, 2026GAAP | $33.7M | – | 9% |
| Net revenue, nine months ended September 30, 2026GAAP | $96.9M | – | 13% |
| Direct operating costs, three months ended September 30, 2026GAAP | $16.71M | – | – |
| Direct operating costs, nine months ended September 30, 2026GAAP | $51.02M | – | – |
| Revenue less direct operating costs, third quarter 2026other | 50.5% of revenue | – | – |
| Selling and marketing, three months ended September 30, 2026GAAP | $1.30M | – | – |
| General and administrative, three months ended September 30, 2026GAAP | $4.95M | – | – |
| Research and development, three months ended September 30, 2026GAAP | $1.05M | – | – |
| Depreciation and amortization, three months ended September 30, 2026GAAP | $3.17M | – | – |
| Total operating expenses, three months ended September 30, 2026GAAP | $27.15M | – | – |
| Operating income, three months ended September 30, 2026GAAP | $6.58M | – | – |
| GAAP operating margin, three months ended September 30, 2026GAAP | 19.5% | – | – |
| Operating income, nine months ended September 30, 2026GAAP | $9.44M | – | – |
| GAAP operating margin, nine months ended September 30, 2026GAAP | 9.7% | – | – |
| Interest expense, three months ended September 30, 2026GAAP | −$1.80M | – | – |
| Income before provision for income taxes, three months ended September 30, 2026GAAP | $4.85M | – | – |
| Income tax provision, three months ended September 30, 2026GAAP | $127K | – | – |
| GAAP net income, three months ended September 30, 2026GAAP | $4.7M | – | 54% |
| GAAP net income, nine months ended September 30, 2026GAAP | $6.8M | – | – |
| Net income attributable to common shareholders, three months ended September 30, 2026GAAP | $4.2M | – | 147% |
| Net income attributable to common shareholders, nine months ended September 30, 2026GAAP | $3.9M | – | – |
| GAAP net income per common share, basic and diluted, three months ended September 30, 2026GAAP | $0.10 per share | – | 150% |
| GAAP net income per common share, basic and diluted, nine months ended September 30, 2026GAAP | $0.09 per share | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $9.9M | – | 28% |
| Adjusted EBITDA margin, third quarter 2026non-GAAP | 29% margin | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $21.2M | – | – |
| Non-GAAP adjusted operating income, three months ended September 30, 2026non-GAAP | $7.62M | – | – |
| Non-GAAP adjusted operating margin, three months ended September 30, 2026non-GAAP | 22.6% | – | – |
| Non-GAAP adjusted net income, three months ended September 30, 2026non-GAAP | $5.83M | – | – |
| Non-GAAP adjusted earnings per share, three months ended September 30, 2026non-GAAP | $0.14 | – | – |
| Net cash provided by operating activities, three months ended September 30, 2026GAAP | $5.64M | – | – |
| Free cash flow, three months ended September 30, 2026non-GAAP | $3.79M | – | – |
| Net cash provided by operating activities, nine months ended September 30, 2026GAAP | $16.33M | – | – |
| Free cash flow, nine months ended September 30, 2026non-GAAP | $11.92M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fiscal Year Ending December 31, 2026 outlook
- Revenue$128 – $132 million
- NoteAdjusted EBITDA $29 – $31 million
- NoteGAAP Net Income Per Share (EPS) $0.20 – $0.23
Capital returns
- Preferred stock dividends paid of $6,974 (in thousands) for the nine months ended September 30, 2026, compared to $4,821 (in thousands) for the nine months ended September 30, 2025.
- Redemption of Series B Preferred Stock of $38,169 (in thousands) for the nine months ended September 30, 2026.
- On May 15, 2026, CareCloud redeemed all of its Series B Preferred Stock for $41.6 million with proceeds from its credit facility.
- Dividend payable was $392 (in thousands) at September 30, 2026, compared to $668 (in thousands) at December 31, 2025.
What drove it
- Third-quarter revenue less direct operating costs rose to 50.5% of revenue from 47.8%, driven by a shift toward higher-margin offerings and a more efficient core business.
- Over the past three months, AI and automation cut manual claim touches by 44% in the division that serves the majority of CareCloud's RCM clients.
- CareCloud recognized its first revenue from LailaCare AI-enabled workflow work for enterprise clients during the quarter.
- Empower, acquired in May 2026, recently reversed more than $1 million in alleged payers overpayments for a client and opened doors to new CareCloud RCM signings with an MSO and a wound care practice.
- The Company plans to launch a SaaS compliance offering in late Q4 2026 and cross-sell across more than 40,000 providers.
Concerns
- Interest expense was $(1,801) (in thousands) in the third quarter of 2026, compared to $(147) (in thousands) in the third quarter of 2025.
- GAAP net income for the nine months ended September 30, 2026 was $6.8 million, compared to $7.9 million in the same period last year.
- Free cash flow was $3,789 (in thousands) in the third quarter of 2026, compared to $5,668 (in thousands) in the prior-year quarter.
- The Company states that its ability to achieve guidance is contingent on the continued performance of existing and new customers, and that impairment to one or more customer relationships could have a material adverse effect on performance.
What to watch
- Execution against full-year 2026 guidance of $128 – $132 million in revenue, $29 – $31 million in adjusted EBITDA, and $0.20 – $0.23 in GAAP EPS.
- Whether the planned late-Q4 2026 SaaS compliance offering and cross-selling efforts generate incremental revenue.
- Further debt reduction, including intended additional prepayments on the term loan as cash flow permits.
- The durability of operating efficiencies from AI and automation, including the reported 44% reduction in manual claim touches.
- The contribution from higher-margin offerings, following the increase in revenue less direct operating costs to 50.5% of revenue.
Balance sheet and cash flow
- Cash was $4,636 (in thousands) at September 30, 2026, compared to $3,117 (in thousands) at December 31, 2025.
- Term and other loans classified as current liabilities were $10,597 (in thousands) at September 30, 2026, compared to $728 (in thousands) at December 31, 2025.
- Term and other loans classified as non-current liabilities were $26,698 (in thousands) at September 30, 2026, compared to $441 (in thousands) at December 31, 2025.
- As of November 2, the term loan stands at $34.2 million. The $9 million borrowed on the line of credit was repaid.
- Net cash used in investing activities was $5,378 (in thousands) for the nine months ended September 30, 2026, compared to $21,200 (in thousands) in the prior-year period.
- Net cash used in financing activities was $9,940 (in thousands) for the nine months ended September 30, 2026, compared to net cash provided by financing activities of $1,226 (in thousands) in the prior-year period.
- Proceeds from term loan were $39,756 (in thousands), and repayments of term and other loans were $3,874 (in thousands), for the nine months ended September 30, 2026.
Analysis
CareCloud reported a record third quarter, with revenue of $33.7 million, up 9% year over year, and materially faster profit growth. GAAP net income rose 54% to $4.7 million, net income attributable to common shareholders rose 147% to $4.2 million, and GAAP EPS rose 150% to $0.10 per share. Adjusted EBITDA increased 28% to $9.9 million. The Company described the quarter as its tenth consecutive quarter of positive GAAP net income.
The reported profitability expansion reflects both mix and operating efficiency. Revenue less direct operating costs rose to 50.5% of revenue from 47.8%, which management attributed to a shift toward higher-margin offerings and a more efficient core business. GAAP operating income was $6,575 (in thousands), compared with $3,210 (in thousands), while GAAP operating margin was 19.5%, compared with 10.3%. Non-GAAP adjusted operating income was $7,624 (in thousands), compared with $4,500 (in thousands), and adjusted operating margin was 22.6%, compared with 14.5%.
Management identified AI-enabled operations, compliance and cross-selling as growth priorities. It reported a 44% reduction in manual claim touches over three months within the division serving the majority of RCM clients, as well as first-quarter revenue from LailaCare enterprise workflow work. Empower also provided a stated compliance and RCM cross-sell avenue, while the Company plans a late-Q4 2026 SaaS compliance launch. No reportable revenue segments were disclosed in the release.
Cash generation supported capital-structure actions, although interest expense increased. Third-quarter operating cash flow was $5,643 (in thousands) and free cash flow was $3,789 (in thousands). CareCloud redeemed all Series B Preferred Stock on May 15, 2026 for $41.6 million using credit-facility proceeds, reported $7.4 million of debt reduction including a $0.8 million prepayment, and said the term loan stood at $34.2 million as of November 2. Third-quarter interest expense was $(1,801) (in thousands), compared with $(147) (in thousands) in the prior-year quarter.
The Company reaffirmed its calendar-year 2026 guidance for revenue of $128 – $132 million, adjusted EBITDA of $29 – $31 million, and GAAP EPS of $0.20 – $0.23. The nine-month figures show revenue of $96.9 million and adjusted EBITDA of $21.2 million, while GAAP net income was $6.8 million compared with $7.9 million in the prior-year period. Execution on the planned compliance launch, cross-selling, AI operating efficiencies and additional debt prepayments are the stated areas to monitor.
Management, verbatim
Record GAAP net income, record GAAP EPS and record adjusted EBITDA: the third quarter was the most profitable in CareCloud’s history, and the $0.10 we earned per share in a single quarter matched what we earned in all of 2025. With ten consecutive profitable quarters behind us, we are putting those earnings to work, paying down debt every month while investing in the AI-enabled solutions, compliance platform and cross-selling opportunity across the customer base that will drive our next phase of growth. That momentum is why we are reaffirming our full-year guidance.
Stephen Snyder, Chief Executive Officer, CareCloud
LailaCare shows what our AI strategy looks like in practice: we are building AI-enabled workflows for enterprise clients, and we recognized our first revenue from that work this quarter. Inside our own operations, AI and automation have cut manual claim touches by 44% in just three months, so our teams handle more volume with the same headcount, and that efficiency helped power this quarter’s record adjusted EBITDA. Our focus now is converting those capabilities into cross-sell revenue across our client base.
A. Hadi Chaudhry, Chief Strategy Officer, CareCloud
Record earnings and a simpler capital structure are working together for common shareholders. Net income attributable to common shareholders more than doubled to $4.2 million year over year, and the cash our business produces is steadily reducing our debt, so more of CareCloud’s value belongs to our shareholders every quarter.
Bonnie Boyer, Chief Financial Officer, CareCloud
Not in the filing
stated, not guessed- Prior-quarter comparisons were not reported for the disclosed operating metrics.
- Revenue by reportable segment was not reported.
- Gross margin was not reported as a line item; the release instead reported revenue less direct operating costs as a percentage of revenue.
- Full-year 2026 guidance for gross margin, operating expenses and tax rate was not provided.
- Previous-period outlook was not provided, so no actual-versus-prior-guidance comparison is available.
- Share repurchases and common-stock dividends were not reported.
- A full third-quarter balance sheet comparison was not reported; the balance sheet provided September 30, 2026 and December 31, 2025 balances.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.