CareCloud, Inc.
Q4 2020 Earnings Call Transcript

Published: 27 Feb 2021

[Operator:]

Greetings, and welcome to MTBC, Inc.'s Fourth Quarter 2020 Results Conference Call. . As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Kim Blanche.

[Kim Blanche:]

Thank you, and good morning, everyone. Welcome to the MTBC Fourth Quarter 2020 Conference Call. On today's call are Mahmud Haq, our Founder and Executive Chairman; Stephen Snyder, our Chief Executive Officer and a Director; A. Hadi Chaudhry, our President and a Director; and Bill Korn, our Chief Financial Officer. Also joining us today are Karl Johnson, our Chief Growth Officer; and Juan Molina, Divisional President. 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 Act of 1934 as amended.

[Stephen Snyder:]

Thank you, Kim, and thank you, everyone, for joining us on our fourth quarter 2020 earnings call. We are pleased to report another record-breaking quarter and year. As we've remained focused on empowering health care providers and health systems with our technology-enabled solutions, we have continued to accelerate our growth. For the fourth quarter, we are pleased to report revenue of $32 million. This is a new record and represents an increase of 103% year-over-year. Our full year 2020 revenue of $105.1 million also represents a new high and an increase of 63% over full year 2019. Quarter 4 and full year 2020 were also breakout periods for us in terms of adjusted EBITDA. As we have accelerated the velocity of our revenue growth, we have also increased our quarterly adjusted EBITDA to a record number of $5.7 million during the quarter, which surpasses our prior quarterly record of $4.2 million. We grew our adjusted EBITDA during the fourth quarter by 105% year-over-year. As to full year adjusted EBITDA, we are also pleased to report a record of $10.9 million.

[Hadi Chaudhry:]

Thank you, Steve, and thank you, everyone, for joining us on our fourth quarter 2020 earnings call. Before I begin, I would like to, first and foremost, reiterate how excited I am about this rebranding and what it means for the future of the company. As I think about this name change, two key components come to mind. The first, as Steve mentioned, is that it better represents who we have become today in the market and how we are positioned to continue to help our customers in the future. And second, it gives us a better foundation to create a more unified customer experience and positions our products and services more strategically under a more streamlined go to market approach. As always, we wanted to provide you a quick update on the transition work across our latest acquisitions. 2020 was a momentous year for us as it brought us two incredibly important acquisitions

[Bill Korn:]

Thank you, Hadi. 2020 was a challenging year for most of the world, so I'm excited to tell you that it was a year of record-breaking performance for MTBC. As Stephen mentioned, our revenue for the full year of 2020 was a record $105.1 million, an increase of 63% compared to $64.4 million in 2019 and was in the upper half of our guidance range of $104 million to $106 million. Revenue has grown at a compound annual rate of 39% per year since MTBC's IPO at a $10 million revenue run rate in 2014. While the largest portion of our 2020 revenue growth is attributable to the CareCloud and Meridian acquisitions, 2020 was also our best year ever for organic sales with bookings that are expected to generate annual recurring revenues equal to more than 20% of our 2019 revenue. Organic bookings actually contributed 9% revenue growth in 2020 from a combination of new organic customers and growth in revenue from existing customers. For the full year 2020, our GAAP net loss was $8.8 million or $1.79 per share, which included $9.9 million in noncash depreciation and amortization expense and $6.5 million in stock-based compensation expense. GAAP net loss per share is based on net loss attributable to common shareholders, which takes into account the preferred stock dividends declared during the year. Non-GAAP adjusted net income for 2020 was $8.5 million or $0.63 per share, an improvement of $1.7 million compared to last year and a new record. Non-GAAP adjusted net income per share is calculated using the end-of-period common shares outstanding.

[Mahmud Haq:]

Thank you, Bill. While 2020 has been a challenging year for the world, we are fortunate to be in our strongest position ever as we generated another record-breaking growth with increased profitability. We thank our investors, customers and employees for their continued support. We will now open the call to questions. Operator?

[Operator:]

And our first question is from Jeffrey Cohen with Ladenburg Thalmann.

[Jeffrey Cohen:]

So I'll keep my questions to just a couple. So could you talk a little bit about more specific areas of growth over the past year and going forward as far as revenue cycle management, practice management, electronic health records as well as MTBC for us? Where are you seeing strength or possible weakness? And organically, where would you expect those areas to grow during 2021?

[Stephen Snyder:]

And we also have with us Karl Johnson, who's our new Chief Growth Officer. So maybe, Karl, I'll invite you to jump in as well. But if we just step back for a moment, Jeff, and think about the last couple of years and we think about the investments from an organic sales and marketing perspective that we made in 2019 of about $1.5 million, we increased that in 2020 to about $6.5 million. And this year, our plan is to increase that investment by another 40% to 60%. And what we've been managing to is a CAC in the neighborhood of about $1 of investment for every $2 of recurring revenue of bookings. And that's the number that we think is extremely compelling. And if we can continue to achieve that, we'll continue to invest further. That investment during last year, as Bill had mentioned, really enabled us to significantly accelerate our organic growth. Much of that organic growth came from upselling. Probably about quarter of that organic growth from a bookings perspective came from upselling our existing base and acquired base, primarily upselling to revenue cycle management. Another part of that came from stand-alone SaaS solutions. And then additional amounts of that came from MTBC Force and from other bundled solutions. We're focused now, in particular, on ramping up our large group and enterprise sales group. And that's a newer area of focus for us. But we believe as we look to the year ahead that something close to 50% of our overall wins, we believe, will come from those larger groups and Force deals. And let me turn the floor over to Karl to provide a little bit more color.

[Karl Johnson:]

As Stephen mentioned, managing that customer acquisition cost is critically important to us. I'm particularly pleased that we're at a 2

[Stephen Snyder:]

COVID-19 has created a lot of ability as well, and Force has been going gangbusters. So a great question. Thank you.

[Jeffrey Cohen:]

And then just secondly for me, could you talk about, so should we be thinking about the business as far as the number of users and the increase in the number of users? Or should we think more toward the large groups and enterprise as well as perhaps the DTD business, the direct to docs, for smaller practices?

[Karl Johnson:]

To answer that question, it really is kind of all of the above. So we are looking to enhance our marketing activities to go directly with campaigns to smaller group practices and continue to grow that segment. We're not abandoning that. But also at the same time, with our new tool sets to go after large group practices. I hope that answers your question.

[Operator:]

And our next question is from Marc Wiesenberger with B. Riley Securities.

[Marc Wiesenberger:]

In your 2020 guide, you're talking about, let's say, roughly 28% year-over-year growth. It looks like about $13 million might be coming from the ARR derived in 2020, which leaves still maybe another $17 million of implied growth. I'm wondering if you could talk about where you expect that to come from.

[Bill Korn:]

So growth is coming from a couple of different angles. So one of the things that happens is we sign up clients in 2020. And even if they go live during 2020, sometimes they're not fully live, and they're often not fully live for the whole 12 months. So you get to see a full year's worth of revenue. Then you get some growth from the clients we sign up in 2021. I think that right now, we're seeing that volumes of patient visits are probably about 5% depressed from where they were sort of a year, two years, three years ago, sort of steady state on a per-doctor basis. And it's our expectation, although we don't have a crystal ball, that some of that is going to go away as the year progresses, certainly not in the first or second quarter, but maybe as we get to the second half. Of course, some of that decline, kids not playing close to other kids or wearing a mask and not picking up colds, maybe that piece of the decline doesn't come back. And finally, when we've given our expectation, we've excluded major acquisitions. But we always reserve the right to do some minor tuck-ins during the year to the extent that we see a business that looks attractive that can be acquired at a good rate. It may not be big and material in terms of strategic importance like a CareCloud or Meridian, but look at that as sort of wholesale customer acquisition that gets added to the work that's done by our great sales and marketing team.

[Marc Wiesenberger:]

And then can you talk about where you are in terms of the cost rationalizations from Meridian? I think that had been below kind of your trend levels. Wondering if those are back on kind of the normalized track and how much we, more in cost-cutting we should expect from there going forward.

[Bill Korn:]

So with Meridian, I'd say the cost-cutting was a little different than most acquisitions because of the fact that in 2019, long before we bought them, they brought on new management, and they were focused on trying to return to profitability. So I'd say the good news is they embarked on the beginnings of cost-cutting even before we bought them. So in fact, when somebody has started reducing costs, there isn't quite as much room. But nonetheless, I would say that, yes, we are on track. We're doing a good job of reducing the costs. We also recognize that Meridian, on average, brought bigger clients. And in some cases, with big hospital systems, there's some contractual obligations to do work onshore or to do things in a particular way. And that means we need to be sensitive to that and not win the skirmish on cost reductions but lose the war in terms of losing the client. But I'd say the cost reductions there are very much on track with our expectations.

[Marc Wiesenberger:]

And then just one final one for me. Can you talk about the cadence of activity in 2021? And are you anticipating any changes to the normal seasonality of the business? And maybe is there some pent-up demand from kind of delayed services in 2020 that might alter kind of the normal cadence that we see?

[Bill Korn:]

Our normal cadence is that Q1 for us and for everybody in this industry, Q1 is always a cyclical low. Lots of people have deductibles in their health care plans. So when they see the doctor in Q1, even when the claim is within the bounds, the insurance doesn't pay anything. And then you wait for the patient to pay. And sometimes they pay a little slowly, and sometimes they pay very slowly. So I guess I'd say sort of a typical year, you see 5% decline in Q1. And I remember Jonathan Bush answering that question, I don't know, five, seven years ago at Athena. And it's no different for us as well. So I think you're going to see the same thing in 2021. But I also think that as a country, we're sort of facing some of these headwinds partly from COVID and partly from the second order effect of COVID. So I mean pediatric visits are down a lot. And if half the pediatricians' patient volume is either the result of colds or the sort of the second order effects of the colds like the ear infections and the exacerbation of asthma, if the kid's not sick, they're not sick and you're not going to see that. So I expect you're going to see probably a little more back-end loading to the revenue cadence in 2021 than we usually see.

[Operator:]

And our next question is from Allen Klee with Maxim Group.

[Allen Klee:]

Could you tell us what the bookings were in the fourth quarter? And you just had a comment that you -- and did I hear you say that whatever that number is, it could potentially be double that by 4Q of '21?

[Stephen Snyder:]

Allen, thanks for the question. We don't release publicly on a granular basis, quarter-by-quarter bookings numbers. But I can tell you for full year, total bookings were approximately $15 million. And Karl had mentioned that we invest in that growth, continue to be managing towards that CAC of roughly signing $2 worth of recurring revenue for every $1 invested. So if we invest another 40% to 60% in sales and marketing this year, we'd anticipate, all things being equal, being able to, likewise, increase the overall bookings accordingly. And candidly, if we're able to really be able to invest and see a return on the investment in that area, we'll continue to increase that investment as the year progresses. So I think if you think about $15 million for the full year and if we break that down and we look at what was that on average per quarter as we were ramping up the sales and marketing team during 2020, $3.5 million to $4 million on average per quarter. And if we think about where we hope to be by the fourth quarter of 2021, we think based upon our investment and the trajectory and speed that we anticipate in terms of the ramp-up of the newly hired sales team members who have been added to our existing team, we do think it's realistic that we could be closing by the fourth quarter at a rate of twice that average from 2020.

[Allen Klee:]

And just so I understand, when you say you want to increase 40% to 60%, you're talking about your sales and marketing spend?

[Stephen Snyder:]

That's correct, yes, approximately. So if we think about the baseline from 2020, having invested about $6.5 million roughly in sales and marketing during 2020, which far surpassed the $1.5 million that we invested the prior year, as we think about 2021, we anticipate taking that $6.5 million of investment and increasing that by 40% to 60% based upon the results that we see that we're getting as the year progresses. And we'd be very excited to see that sort of result because we really contrast that to the market norms, which we believe are roughly $1 of investment yielding $1 or less of recurring revenue in a SaaS and SaaS-enabled, tech-enabled service company like ours. So we'd be very excited to see that sort of investment. And we believe it's achievable. And the year, as it progresses, will tell us whether we're correct or incorrect, I suppose. But even if we are wildly successful in terms of that overall strategy and the return on that investment, we still look at our historical growth, our current growth and our future growth and continue to believe that the majority of that growth in the future, just as in the past, will really come through acquiring customers through wholesale through these acquisitions. That's where we really believe we have a strategic advantage vis-à-vis the competition because of our experience and the technology we have built that facilitates that and the significant fragmentation that exists in the market. We believe we can add real value, and we believe that's the most attractive way to continue to grow and scale and that the majority of that growth will continue to come from that strategy.

[Operator:]

And our next question is from Richard Baldry with ROTH Capital.

[Richard Baldry:]

Given how efficient that sales and marketing ROI is, does that create sort of a natural cap on what you'd be willing to pay in an M&A situation? It seems like as those multiples would expand, those dollars would naturally sort of look more attractive built into organic growth. I'm sort of curious if you've done that breakeven point or even a ballpark thought process around maybe multiples to revenues, would seem fair.

[Stephen Snyder:]

And if we think about historically, the cost for acquiring customer relationships for MTBC has been somewhere in the neighborhood of 0.5 to 0.7x the sales associated with customers in good standing. If we look at some of the other acquisitions that we've done more recently, CareCloud and Meridian, you'll see that overall cost as a percentage of revenue was a bit higher. But that really was higher because in addition to the revenue base and the customers that we acquired, we were also acquiring additions to our product portfolio in terms of those digital assets and also brand equity that came with those larger acquisitions. So back to your question, if we can continue at a CAC of about $1 invested, yielding $2 of recurring revenue, why not solely focus on that if, in fact, it's going to be slightly more expensive to acquire those relationships in some scenarios and acquisitions? I think the answer to that would be when we look at it, there's another element at play, and that's scale. How quickly can we scale? And the reality is, from an organic growth perspective, there's just a more natural limiting factor that applies in that model that we can essentially override or we can accelerate or we can bypass through a combination of both organic growth and also through acquisitions. And in terms of the acquisitions, they continue to be a very cost-efficient way, far more cost-efficient than the norms in the market in terms of customer acquisition, gives us the ability to quickly scale. And also, we're uniquely capable, by virtue of our experience and our technology and the processes we've honed over the last two decades, to be able to grow effectively through these acquisitions.

[Richard Baldry:]

And in terms of the pipeline for acquisitions, sort of curious how COVID has impacted that. Historically, people would have looked at things like patient visits as a pretty steady, easy-to-plan, maybe easier-to-execute market given COVID's challenges and the disruptions people might have seen. Has that created more opportunities where people are more willing to either look at partnering with maybe MTBC Force or outright sell -- willingness to look at selling the company at a fair price because of the disruption they've seen and sort of less appetite to face those battles again going forward? Thanks.

[Stephen Snyder:]

Rich, I would say, virtually, every year for the last 5 or 6 years, our pipeline has grown year-over-year. And I would say that continues to be the case today. Part of it could very well be COVID, but it also, candidly, is consistent with the overall trend.

[Operator:]

And our next question is from Eugene Mannheimer with Dougherty & Co.

[Eugene Mannheimer:]

I wanted to ask a couple of things. One is, as your revenue profile has gotten so much bigger, how has the rate of natural attrition in the business changed over that time?

[Hadi Chaudhry:]

So in our industry, what we have been talking about before was that typically, any number around 12% or 13% attrition due to a number of factors in this RCM industry considered to be an acceptable number because of the mergers, because of the practices or being bought by other larger groups, integration and so on and so on. And many times, they are practices who may end up finding some other solutions and so on and so on. But let's say even 2 years back, we were retaining about the same 87 kind of the number in terms of the patient retention. And this year, we are even slightly below 10% numbers for this year, for 2020, and we anticipate to even improve that number further in the year to come. So we are happy to report that even -- we were able to surpass even our own expectations.

[Eugene Mannheimer:]

With respect to the CareCloud acquisition, I believe there were some earn-out targets set at that time that hinged on their revenue. And I'm going to assume that they were not achieved given the pandemic. Can you provide any color on that and how the ultimate purchase price played out there?

[Bill Korn:]

Eugene, you're correct that there was no earn-out earned by the CareCloud sellers. And I'd say, candidly, when we set the earn-out parameters, as we usually do, we were pretty aggressive. And they would have needed a year or probably 10% better than their best year ever to have earned $1 of earn-out. So therefore, in the best of times, without COVID, earning a real earn-out would have been very difficult. And of course, then they lost a little bit of revenue. So there was nothing paid in terms of the earn-out, which, candidly, that was pretty much our expectation from the beginning.

[Eugene Mannheimer:]

And with respect to the acquisition pipeline, guys, I imagine there are -- they're even more robust now given the struggles from the pandemic, smaller vendors that have been struggling. You did two very large deals last year. I mean is it reasonable that we would see at least one more this year? Any color there would be great.

[Stephen Snyder:]

Yes, I think it's, absolutely, the insight is correct that the, especially the acquisition strategy that we pursue, where the majority of the targets that we focus in on are targets that have an element in their business model that we think we can strengthen, that we can address, that would be stronger together as a combined company. So there's an element of stress that usually exists in the business models of the companies we're acquiring. And there's no doubt that COVID increased stress. On the flip side, some of the mitigating factors that have enabled some of these companies to nevertheless, from an investors' perspective, avoid an exit for a period of time probably comes down to a very effective strategy from the federal government's perspective, in particular, with regard to the PPP and other incentives under the CARES Act that, in our estimation, have really done a very good job in terms of helping to shore up companies and enabling companies that otherwise would have been exiting to temporarily delay that exit. That combined with a more broad-based understanding amongst creditors, that COVID impact is real. And that, we believe, has caused lenders and has also caused landlords and the like to provide forbearance and extend grace in terms of the overall payment terms. Again, that's only for a period of time. In addition to that, if you're an equity holder, you're very cognizant of the fact that this is probably not the ideal time to exit if you can avoid it. So I think all 3 of those factors haven't changed the fundamental dynamics per se. In fact, COVID has, if anything, enlarged the universe of opportunities, we believe. And we'll see what that does relative to the overall valuations. However, those 3 elements have created some additional time that's built into the overall exit strategy, we believe, in terms of many of these companies. So back to your question in particular, will there be a larger acquisition this year? We certainly hope so. It might be this year. It could be next year. But what I can tell you is that the pipeline today is bigger than it was last year at this time, and that was bigger than it was the year before, and that's the trend.

[Operator:]

And our next question is from Kevin Dede with H.C. Wainwright.

[Kevin Dede:]

Steve, could you just give us a little more color on the brand change or amalgamation or however you'd like to look at it? Do you see MTBC going away? How do you see addressing larger practices versus smaller ones? And maybe just some insight on, I mean it's a pretty dynamic shift, right, in the base of your business over the course of the year. So maybe you could just talk to the brand and how you see it addressing your clientele and future clientele.

[Stephen Snyder:]

And you're right, a pretty significant shift, and we're very excited about it. And in the months ahead, we'll provide some more granular details, but let me just briefly address your question and maybe we think about the what and the why in terms of the overall change. And with regard to what are we doing, what we're doing is, as you alluded to, we're changing the name of the parent company and the brand more broadly throughout the organization from MTBC, Inc., which is the acronym that we've leveraged more recently and that initially came from Medical Transcription Billing, Corp. from 20 years ago. We're changing that name from MTBC, Inc. to CareCloud, Inc. We're not planning on changing our stock ticker. That will continue to be MTBC for our common shares, MTBCP for our preferred. The solution set and the services remains unchanged. The values that have steered us from the very beginning when Mahmud founded the company continue to steer us today. So those fundamental things haven't changed. Instead, really, it's this rebranding or the brand merger. And again, from the beginning, the focus of Mahmud and then, by extension, the rest of us has really been focused on building something that will last, delivering value and meeting the evolving needs of health care providers throughout the market and doing that in a way that leverages our proprietary technology, which has grown and evolved, and also our global team. And over the last couple of decades, it's been increasingly going in this direction. There's been this expansion of our overall health care platform, the scope of the solutions, the power of the solutions and the elegance of solutions. And it's, as a company, we've grown, we've long since grown well past the billing and the transcription with a real focus on the technology. And our belief increasingly has been that MTBC itself doesn't fully embody or doesn't fully convey the overall value proposition that we're offering today to the market in terms of being able to provide assistance with regard to delivering care to patients through a cloud-based platform. So from the perspective of a go-forward and a go-to-market, we'll go to market after the official date at the end of March. We'll go to market under CareCloud, Inc. And in terms of our existing customers, for the overwhelming majority of those customer relationships, we'll be working with those customers under a unified brand that will also help us create a more seamless client experience, and that will be CareCloud.

[Kevin Dede:]

Hadi, the big question falls on your shoulders, my friend. Can you talk a little bit about what you're going to have to do on the op side in order to project this amalgamated image to your customers?

[Hadi Chaudhry:]

No, you're right. So as Steve mentioned, we have, over the next 30 days, we have a number of things lined up to keep on working on in terms of the internal communication even to the employees and how they will start representing the company as a CareCloud to the clients instead of MTBC or any one of our other subsidiaries. So we have a plan in place. We will be working, we did one announcement. We had the first round of conversations. But over the next 30 days, they are much more in plan to make sure that the representation is done properly. There is a client communication that we are working on with some individual one-on-one conversation with the enterprise-level clients. So we have, in short, we have a plan in place over the next 30 days to address internal communication and external communication.

[Kevin Dede:]

And what about, just indulge me a little bit. What about just in terms of systems? I mean I think basically, what you're talking about is that I'd expect everything to be integrated on the back end, too, whereas, I mean at least as I understood it, you had packaged CareCloud's offering while continuing to offer MTBC's. And I guess I'm just kind of wondering how the full execution of that business goes through on the back end.

[Hadi Chaudhry:]

So a few things. Number one, as Steve mentioned and I mentioned in our earning call, that there will be a more detailed press release coming up in the coming week. And then we have some more things planned over the next couple of weeks and months, where we will more specifically will talk about that which products we anticipate or we plan strategically to address which type of customers. Let's say for talkEHR, what is the right group of clients or the category of the clients we'll be going forward with? So I think I'll leave that for the much details that we will be relaying because that's something that some of those things are still being worked on. We will continue, though, to sell almost all the products that we have today with maybe just few exceptions, which we will end up merging into another, let's say talking about Breeze, probably we'll take the precedence in terms of patient experience management over some of the existing products that we have. On the other side, we continue to work on the integrations between our products such as Precision BI, our analytics tool engine. Already, we have completed the integration with MTBC's product and already have rolled out to one of our enterprise-level clients containing over 1,800-plus providers. So they already have started to use it in production. So the same way, if I step back, so a number of things. One, we are working on integrating the different products. So they don't need to go and the clients have to work between the isolated products. The second, we are addressing that which product is right for which target market or size or type of client. That communication will be done with a proper press release, along with some other announcement in the right way over the next couple of weeks and months. And the third thing is nothing will change day 1 for the clients. We are not going to eliminate any of the existing products in the short term. So if someone is using, let's say, CareCloud system or talkEHR system or VertexDR system, none of that is going to go away. They will be, based on the direction, can be and maybe, and over the time, transition.

[Operator:]

And our next question is from David Larsen with BTIG.

[David Larsen:]

Can you talk about the utilization rates for telehealth and how that's impacting your revenue? Like what portion of your revenue is coming from telehealth as related to your client base? And what are your expectations for that going forward?

[Hadi Chaudhry:]

So first of all, we do not specifically disclose, though, the revenue stream from the different type of practices, the different type of products that we have. But I'll be happy to share some of the trends and the numbers. As we have even mentioned before, if we go back to January 2020 and try to look at the telehealth encounters, the total utilization was literally 0.1% of the total encounters. Pandemic started in early -- or in the late first quarter. That number went up to about over 20% of the encounters. That now seems to have settled down somewhere around 7% of the total encounters, seems to be the telehealth-related encounters. We did do even a survey at the end of 2020, the details of that survey is available on the CareCloud Web site. And what we tried to ask for is what the practices -- how they look at it from the technology adoption perspective post COVID in the year to come. And about 78% of the participant, first of all, noted that they either relied on the technology more since the pandemic, and then they continue to see that they will be utilizing more and more technology. And the top most number was out of the entire survey that 73% of the participants believe that they will be utilizing more and more telehealth-related services in the future. There are others, too, but the telehealth number seems to be at about 73% of the participants believe that there will be adoption towards more on the telehealth side. So it will be a tremendous opportunity in the year to come.

[Operator:]

And our next and final question is from Bill Sutherland with The Benchmark Company.

[Bill Sutherland:]

I think maybe a quick question for Karl, focused on the enterprise initiatives. Do you think your product sets -- will there be the same mix of products that will resonate with this customer base as you get into that? And then I'm also curious if you believe the CAC in that area will be similar or maybe better than the new traditional customer profile.

[Karl Johnson:]

So let me address the product section first. I think particularly the CareCloud product, enhanced by Precision BI, becomes extremely attractive to larger enterprise practices. And we think that's really a good resonating fit with them. As far as the CAC goes, that kind of 2

[Juan Molina:]

And maybe, Bill, if I can just add to Karl. This is Juan. So as you think about kind of our products and how we go to market, right, and you really kind of take a step back and look at the different markets, not only in the ambulatory space and in the health system space, but when you specifically try to understand the segments in which we operate in those spaces, the difference is between a small one to two doctor practice and a 20- to 25-doctor practice, let's say, or 50- or 100-physician practice that's come together under a consolidated tax ID or being bought by private equity, etcetera. The needs of those particular segments are very unique. And I think what differentiates us in the market is that we have kind of purpose-built technologies or purpose-built products that can really address those capabilities well. We don't necessarily have to go or need to go that the products are architected, the ability for us to have kind of a very broad solution across multiple specialties, and we can go up and down that segment stack, so to speak, gives us a very unique opportunity, I think, versus some of our peers in the market. So I think where Karl mentioned earlier that we have an opportunity to make it simple, carry more in our bag, that, combined with the ability to have kind of those three legs of the stool, a patient experience management solution that really attacks kind of what patients need, right, in Breeze. And then you have the financial systems and the practice management and revenue cycle management solutions and the clinical systems and our EHRs, coupled with our other ancillary services, whether it's apps that are built by us like the Precision BI or RPA or even MTBC Force. I think it really gives us an incredibly strong value proposition as we go out into the market and specifically as we go out into these larger, more complex enterprise deals.

[Operator:]

Ladies and gentlemen, we've reached the end of the question-and-answer session, and I would like to turn the call back over to Kim Blanche for closing remarks.

[Kim Blanche:]

We'd like to extend our thanks to everyone who's joined us today. We appreciate your participation and interest in us as a company, and we look forward to speaking to you again next quarter. Thank you, and have a great day.