CareCloud, Inc. Segments Disclosure

18. SEGMENT REPORTING

 

From January 1, 2023 through April 30, 2024, the Chief Executive Officer (“CEO”) and Executive Chairman served as the Chief Decision Maker (“CODM”), organizing the Company, managing resource allocations and measuring performance among two operating and reportable segments: (i) Healthcare IT and (ii) Medical Practice Management. As of May 1, 2024, the Company’s President, CEO and Executive Chairman served as the CODM. We report our segment information based on the internal reporting used by management for making decisions and assessing performance as the source of our reportable segments.

 

The CODM evaluates the financial performance of the business units on the basis of revenue, certain individual and total operating expenses and operating income (loss) excluding unallocated amounts, which are mainly corporate overhead costs, for assessing operating results and the allocation of resources. Our CODM does not evaluate operating segments using asset or liability information. The CODM uses segment revenue, certain segment operating expenses and segment operating income (loss) to manage the segments, comparing actual results to forecasted amounts and investigating the reasons for significant variances. Currently, a focus is being placed on reducing costs and managing global headcount. The segment revenue and segment operating income (loss) is also used to assess the performance of personnel and in establishing their compensation.

 

The Healthcare IT segment includes technology-assisted revenue cycle management, SaaS solutions and professional and other services. The Medical Practice Management segment includes the management of three medical practices. Each segment is considered a reporting unit. The Company does not have intra-entity sales or asset transfers, however, there are intracompany bank transfers. The accounting policies of the segments are the same as those disclosed in the summary of significant accounting policies. The following tables present revenues, operating expenses and operating income (loss) by reportable segment for the years ended December 31, 2024 and 2023:

SCHEDULE OF REVENUES, OPERATING EXPENSES AND OPERATING INCOME (LOSS) BY REPORTABLE SEGMENT 

		Healthcare IT				Medical Practice Management				Total
		Year Ended December 31, 2024
		($ in thousands)
		Healthcare IT				Medical Practice Management				Total
Net revenue		$	96,405			$	14,432	(a)		$	110,837
Operating expenses:
Direct operating costs			49,945				10,897				60,842
Selling and marketing			6,201				31				6,232
General and administrative			9,093				1,911				11,004
Research and development			3,781				-				3,781
Depreciation and amortization			13,813				329				14,142
Goodwill impairment charges
Lease terminations, unoccupied lease charges and restructuring costs			596				-				596
Total operating expenses			83,429				13,168				96,597
Segment operating income		$	12,976			$	1,264			$	14,240
Reconciliation of profit or loss (segment profit/loss):
Unallocated corporate expenses										$	(5,119	)
Net interest expense											(812	)
Other expenses											(298	)
Income before income taxes										$	8,011

 

(a)

This revenue represents fees based on our actual costs plus a percentage of the operating profit.

 

 

		Healthcare IT				Medical Practice Management				Total
		Year Ended December 31, 2023
		($ in thousands)
		Healthcare IT				Medical Practice Management				Total
Net revenue		$	103,683			$	13,376	(a)		$	117,059
Operating expenses:
Direct operating costs			60,319				10,498				70,817
Selling and marketing			9,614				36				9,650
General and administrative			10,992				1,854				12,846
Research and development			4,736				-				4,736
Depreciation and amortization			14,046				356				14,402
Goodwill impairment charges			42,000				-				42,000
Lease terminations, unoccupied lease charges and restructuring costs			1,105				-				1,105
Total operating expenses			142,812				12,744				155,556
Segment operating (loss) income		$	(39,129	)		$	632			$	(38,497	)
Reconciliation of profit or loss (segment profit/loss):
Unallocated corporate expenses										$	(8,618	)
Net interest expense											(1,040	)
Other expenses											(883	)
Loss before income taxes										$	(49,038	)

 

(a)

This revenue represents fees based on our actual costs plus a percentage of the operating profit.