Company: HCTI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026218
Chunk: 391

Company: Healthcare Triangle, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 2
Chunk 391
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 solutions by new customers. Our customers
are large organizations who typically have long procurement cycles which may lead to declines in the pace of our new customer additions.

Subscription services adoption

The key factor to our success in generating substantial
recurring subscription revenues in future will be our ability to successfully market and persuade new customers to adopt our SaaS offerings.
We are in the early stages of marketing our SaaS offerings such as DataEz, CloudEz and Readabl.AI, and do not yet have enough information
about our competition or customer acceptance to determine whether or not recurring subscription revenue from these offerings will have
a material impact on our revenue growth.

Mix of solutions and software services revenues.

Another factor to our success is the ability to
sell our solutions to the existing software services customers. During the initial period of deployment by a customer, we generally provide
a greater number of services including advisory, implementation and training. At the same time, many of our customers have historically
purchased our solutions after the deployment. Hence, the proportion of total revenues for a customer associated with software services
is relatively high during the initial deployment period. While our software services help our customers achieve measurable improvements
and make them stickier, they have lower gross margins than solution-based revenue. Over time, we expect the revenues to shift towards
recurring and subscription-based revenues.

Components of Results of Operations

Revenues

We provide our services and manage our business under these operating
segments:

    ●
    Software Services

    ●
    Managed Services and Support

    ●
    Platform Services

36

Software Services

The Company earns revenue primarily through the
sale of software services that is generated from providing strategic advisory, implementation, and development services. The Company enters
into Statement of Work (SOW) which provides for service obligations that need to be fulfilled as agreed with the customer. The majority
of our software services arrangements are billed on a time and materials basis and revenues are recognized over time based on time incurred
and contractually agreed rates. Certain software services revenues are billed on a fixed fee basis and revenues are typically recognized
over time as the services are delivered based on time incurred and customer acceptance. We recognize revenue when we have the right to
invoice the customer using the allowable practical expedient under ASC 606-10-55-18 since the right to invoice the customer corresponds
with the performance obligations completed.

Managed Services and Support

Managed Services and Support include post implementation
support and cloud hosting. Managed Services and Support are a