CareCloud, Inc.

Please stand by. We're about to begin. Good day, everyone. Welcome to the CareCloud, Inc., fourth quarter 2021 results call. At this time, all participants are in a listen-only mode. Later, we'll conduct a questions and answers session. And if you'd like to ask a question, please signal by pressing star 1 on your touchtone phone. Please note this event is being recorded. I'd now like to turn the call over to Kim Blanch, CareCloud's general counsel. Ms. Blanch, the floor is yours.

Good morning, everyone, and welcome to the CareCloud fourth quarter 2021 conference call. On today's call are Mahmud Haq, our founder and executive chairman, A. Hadi Chaudhry, our chief executive officer, president, and a director, Bill Korn, our chief financial officer, Stephen Snyder, our chief strategy officer and a director, and Carl Johnson, president of CareCloud Force. Before we begin, I would like to remind you that certain statements made during this conference call are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. All statements other than statements of historical fact made during this conference call are forward-looking statements, including, without limitation, Statements regarding our expectations, guidance, and guidance for future financial and operational performance, expected growth, business outlook, and potential organic growth and acquisition. Forward-looking statements may sometimes be identified with words such as will, may, expect, plan, anticipate, upcoming, believe, estimate, or similar terminology, and the negative of these terms. Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. These statements reflect our opinions only as of the date of this presentation, and we undertake no obligation to revise these forward-looking statements in light of new information or future events. Please refer to our press release and report filed with the Securities and Exchange Commission where you will find a more comprehensive discussion of our performance and factors that could cause actual results to differ materially from these forward-looking statements. For anyone who dialed into the call by telephone, you may want to download our fourth quarter 2021 earnings presentation. Please visit our investor relations site, ir.carecloud.com, Scroll down to Upcoming Events, click on Fourth Quarter 2021 Results Conference Call, and download the earnings presentation. And finally, on today's call, we may refer to certain non-GAAP financial measures. Please refer to today's press release announcing our Fourth Quarter 2021 results for reconciliation of these non-GAAP performance measures to our GAAP financial results. And with that said, I'll now turn the call over to our CEO, Hadi Chaudhry. Hadi?

Thank you, Kim. Thank you, everyone, for joining us this morning to discuss our fourth quarter and full year 2021 results. In the call, I will cover our 2021 results, discuss our emerging organic growth opportunity, review the strategic acquisition of Medisar, and conclude by talking about the evolution of our company. I would like to begin by highlighting some of CareCloud's financial accomplishments for last year. We are very pleased to report another year of strong financial results with record levels of revenue, EBITDA, non-GAAP net income, and free cash flow. Revenues were approximately $140 million, an increase of 33% year-over-year. Adjusted EBITDA was $22.1 million, which was more than double of 2020 levels. and we delivered adjusted net income of $18.5 million or $1.24 per share compared to $8.5 million or $0.63 per share in 2020. Turning to our operational highlights for the full year, we made one strategic acquisition headlined by the June acquisition of certain assets of MedMedica and Santa Rosa Consulting. We subsequently rebranded it as MedSR. This acquisition gives us new service offerings and staffing capabilities and expands our footprint into the health systems market. This provides us with greenfield opportunities to cross-sell our RCM and technology solutions, such as business intelligence and robotic process automation. We continued on the path of innovation as we introduced several new products during the year, like CareCloud Conductor, a family of technology solutions rich with interoperability and data exchange capabilities to accommodate more and bigger customers. We integrated our various acquired platforms with CareCloud's proprietary rule-based claim scrubbing engine, CollectiveIQ, that includes custom rules for over 80 medical specialties. This integration of collective IQ with these acquired platforms enables our clients to achieve an industry-leading first pass rate of up to 97%. And we are planning to launch this platform for healthcare IT industry very soon. We are pleased with the uptake and continued high utilization of virtual care visits on our platform. During the quarter, telehealth visits were 26 times that of pre-pandemic levels, and at the peak of the pandemic, a 44 times increase versus pre-COVID. We also took steps to strengthen our management team, particularly in the area of operations and sales and marketing. Today we announce the appointment of Steve Link as Chief Operating Officer of CareCloud. In this role, he will be leading the company's revenue cycle management operations, including all functional components of service delivery and client success. Steve was previously Senior Vice President of Client Operations at CareCloud and brings to the company 30 years of operations, strategy, and process improvement experience, including leading multiple business units at Athena Health. Additionally, we hired Brian Zelenka as Vice President of Marketing who joins CareCloud with greater than 25 years of healthcare and technology experience building and leading high performance teams. He has an impressive track record implementing data driven marketing strategies that accelerate growth and profitability. With respect to sales and operations, We appointed Patty Peetz as Senior Vice President of Sales to lead the company's sales growth and market expansion strategy and execution. Ms. Peetz joined CareCloud in 2014 and was previously Vice President of ClientOps Solutions. She has 30 years of sales, consulting, and healthcare experience, including Sage and NextGen Healthcare. Last but not least, we appointed Karinda Cox as Vice President of Sales Operations. She has 17 years of experience, including managing sales team at Change Healthcare, where she succeeded both growth and booking strategies in the ambulatory small practice channel. I would like to point out that our sales team is now roughly 30 people, up from one or two employees at the time of the IPO. As I will discuss shortly, we look to continue to expand our sales resources over the course of the year. Our focus will be signing new clients as well as leveraging our vast customer base through the cross-sell and up-sell of CareCloud solutions. We would now like to take a deeper dive into our organic growth strategy, which has evolved over time from our prior history as a pure consolidator of billing companies. Coinciding with our diverse portfolio of products and services that we have amassed over the years, we have increased our sales and marketing efforts to fully capitalize on the addressable market opportunity that exists across our family of products. As an illustration of our increasing focus on organic growth, we invested just 2% of revenue on sales and marketing in 2019, while in 2021, we tripled that spend to north of 6%. Further, we intend to increase our sales and marketing investment by 20% to 25% this year, positioning us to execute on the marketing opportunities ahead. To help manage this increased sales and marketing effort, we have, as mentioned, expanded our sales leadership team with extensive digital health experience. We believe that this stepped-up effort in sales and marketing will return higher level of organic growth versus what we have achieved in the past. Namely, new incremental business frequently carries with its higher margin than existing contracts from acquired businesses, contributing to a higher margin profile moving forward. Turning to our recent acquisition of MedSR, we are now more than six months into the acquisition since it closed in June of 2021 and are pleased to provide an update of our progress. To review, the acquisition of Medisar provides strategic value to CareCloud on at least two fronts, scale and expertise. Over the last two years alone, Medisar has worked with greater than 100 hospitals, providing a solid foundation upon which CareCloud can cross-sell products and services. Medisar has entrenched relationships with the C-suites of these customers, providing CareCloud a warm introduction that we believe will bear fruit versus a pure cold calling effort. The Medisar acquisition is unique for us as it helps expand CareCloud's footprint in the hospital and health system space, an area in which until now had only a small presence. The current labor shortage environment in hospitals, combined with increased inflation, provides a solid backdrop upon which MedSR can thrive, given the company's value proposition of staffing high-level FTEs for short- and long-term consulting engagements. Six months in, we have completed most of the integration and training of employees, setting us up for cross-sell of products and services into the MedSR base and vice versa. We continue to expect the transition to be accretive to our 2022 financial performance. The transaction is consistent with GearCloud's strategy of targeting high-quality, undervalued companies whose IP, human capital, and or financial profile is something that we can leverage across our vast platform. Our acquisition pipeline remained robust, and we feel that we are in a viable position to be a consolidator in the industry, as many companies with less solid footing have been victim to increasingly stringent regulations, COVID-related fallout, labor shortages, and inflation. This month marks my one-year anniversary as CEO of CareCloud and I couldn't be prouder of our accomplishment this year and throughout our history. I believe the company truly sits at an inflection point as we have evolved over the last 20 years since I joined the company. We began as a pure play revenue cycle management company, became the leading consolidator of the industry, and evolved into a fully diversified provider of digital health and technology solutions and services. As slide four depicts, we now offer leading solutions in practice management and RCM, electronic health records, project management, staffing, and digital health solutions, improving the patient experience, including telemedicine and digital front door tools. This breadth of overall capabilities is a key differentiator of ours and continues to attract prospects seeking a single partner to accommodate their digital health requirements. Our clients tell us that they prefer to work with vendors. They can offer a wide variety of solutions to meet their ever-changing needs they face as they navigate through the complex healthcare environment. I would like to take a moment to illustrate how our diversified portfolio positively impacts the outcomes of our customers. As just one example, we have been working with the Hutchinson Clinic in Kansas across a variety of initiatives since 2020 to address collection challenges, among other issues. During a recent interview, we were reminded by their CEO and CFO of the great work both of our teams had been doing together. Over the past several months, we have been deploying additional workforce, software, and automation that has delivered a dramatic impact to their bottom line. While this increase in revenue and proper reimbursement is important, it is crucial to remember that the business of medicine is not just about bottom line results, but rather it has the opportunity to make an even broader impact on the community and those near and around Central Kansas. and as shown on slide five, we have expanded our customer base from initially small physician practices to large practices and clinics, hospitals and health systems spanning from 100 beds to 1,000 beds, specialists, labs, peers and vendor partners. With this backdrop exiting 2021, we are very excited about our prospects for 2022 as Bill will share later in our outlook. Our newly issued 2022 guidance implies 10% revenue growth at the midpoint and low-teens EBITDA growth, which is a combination of organic growth and attacking acquisitions. We plan to increase wallet share within our vast client base, introduce new solutions that build on innovation we have forged in the area of digital health and patient experience by looking opportunistically at acquisitions. We note that our guidance does not contemplate any large, transformative acquisitions. Before turning over the call to Bill, I want to reiterate CareCloud's three pillars of growth as outlined on slide six. Organic growth through adding new customers, products, and the cross-sell of products and services into our client base. Acquisitions which have always been part of CareCloud's DNA to drive long-term shareholder value. and partnerships, namely through our force initiatives in which we work with partners by leveraging our staffing, RCM and technology capabilities. In fact, we have seen increased interest in force to help mitigate labor shortages that are rapidly becoming more prevalent across the hospital settings. We are well positioned in the market to deliver positive outcomes and help drive the success of our 2600 strong customer base of medical practices and healthcare institutions. Our 2021 performance in these unprecedented times gives us confidence in our ability to achieve our 2022 outlook and emerge from this year even stronger than last. I will now turn the call over to Bill Korn, our Chief Financial Officer, to provide an update on companies' full-year and fourth-quarter financials, as well as comment on our 2022 outlook. Bill?