Core Insights - OptimizeRx Corp. plans to appoint a new independent director to its Board of Directors in the second half of 2025 as part of its strategy to refresh and expand the Board [1][2] - The current Board consists of five directors, with three new members added since 2020, indicating a proactive approach to governance and strategic alignment [2] - The company is focused on executing its growth strategy under the leadership of new CEO Steve Silvestro, aiming to enhance brand visibility and drive profitable revenue growth in the healthcare technology sector [3] Company Overview - OptimizeRx is a leading provider of healthcare technology solutions that facilitate connections between life sciences companies, healthcare professionals, and patients [4] - The company utilizes innovative AI-driven tools such as the Dynamic Audience Activation Platform (DAAP) and Micro-Neighborhood Targeting (MNT) to enhance engagement and improve patient outcomes [4][5] - OptimizeRx is committed to privacy-safe, patient-centric technology, partnering with top pharmaceutical and life sciences companies to transform the healthcare landscape [5]

Financial Performance - Total net revenue increased by 29% to $92.1 million for the year ended December 31, 2024, compared to $71.5 million in 2023[206]. - The company recorded a net loss of $20.1 million in 2024, compared to a net loss of $17.6 million in 2023[205]. - The income tax expense for 2024 was $0.7 million, contrasting with a benefit of $7.6 million in 2023, primarily due to taxable income in 2024[222]. - The company reported a net loss of $20.1 million for the year ended December 31, 2024, compared to a net loss of $17.6 million in 2023, with increased revenue and gross margin partially offset by higher operating expenses[224]. - Operating expenses rose to $73.1 million in 2024, up approximately 5% from $69.3 million in 2023, with significant increases in compensation costs[210][216]. - Interest expense surged to $6.2 million in 2024 from $1.5 million in 2023, due to a full year of interest on the Term Loan used for the Medicx Health acquisition[219]. - Gross margin percentage increased to 64.5% in 2024 from 60% in 2023, reflecting higher revenues and improved cost management[208]. - Noncash operating expenses were $24.3 million in 2024, down from $25.9 million in 2023, indicating a reduction in noncash costs[224]. - The company believes that funds generated from operations and existing cash will be sufficient to finance current operations and planned growth for the next twelve months[227]. Customer Concentration - The company's top five customers represented approximately 49% of revenue for the year ended December 31, 2024, indicating a high revenue concentration risk[84]. - The company generated 57.3% and 55.9% of its revenue through its two largest channel partners in 2024 and 2023, respectively, highlighting dependency on key partnerships[87]. - The company's top five customers accounted for approximately 49% of its revenue in 2024, compared to 44% in 2023[193]. - The percentage of total revenue attributable to top 20 pharmaceutical manufacturers decreased to 64% in 2024 from 67% in 2023[201]. - The company has approximately 100 pharmaceutical companies as customers, indicating a concentrated revenue stream[193]. Growth Strategy - OptimizeRx aims to achieve a combined annual revenue growth rate and EBITDA margin of 40% or higher, aligning with the "Rule of 40" strategy[35]. - The company plans to convert its Dynamic Audience Activation Platform customers to a subscription-based model to improve EBITDA margins and revenue predictability[35]. - The company employs a "land and expand" strategy to grow its customer base and increase revenue consistency through enterprise-level engagements[191]. - The company plans to grow by further integrating its technology into electronic platforms, which will require substantial management and resource allocation[110]. Market and Competitive Landscape - The total pharmaceutical industry commercial spend in the U.S. is $30 billion, with approximately $10 billion allocated to commercial digital spend[38]. - The company operates in a highly competitive and rapidly evolving healthcare market, facing competition from various healthcare data suppliers and advertising networks[90]. - Many competitors possess greater financial and technical resources, making it challenging for the company to ensure successful competition[91]. - A significant portion of the company's revenue is derived from pharmaceutical manufacturers, which may be adversely affected by overall reductions in healthcare industry spending[92]. Operational Challenges - The company has historically incurred losses, with the exception of 2021, due to investments in future growth and non-cash expenses, impacting its ability to achieve consistent profitability[73]. - The company may need to raise additional capital in the future to expand operations or respond to competitive pressures, which could limit its ability to operate if not raised on favorable terms[74]. - Seasonal trends in the pharmaceutical brand marketing industry affect operating results, with the first quarter typically reflecting lower activity levels and revenue[79]. - The company may face challenges in maintaining contracts with electronic prescription platforms and electronic health record systems, which are crucial for revenue generation[87]. - The company may experience disruptions in operations and increased expenses due to acquisition activities, which could impact financial and strategic goals[124]. - The company faces challenges in managing growth effectively, which could strain operations and impact customer demand[121]. Employee and Corporate Governance - The company has increased its focus on training and development for employees, implementing a Learning Management System to track training modules[64]. - The company is committed to diversity and inclusion, having upheld the Parity Pledge to interview at least one qualified woman and one underrepresented minority for every open role[63]. - The company offers competitive employee compensation and benefits, including stock-based awards and cash-based performance bonuses[65]. - The company is dependent on attracting and retaining key employees, with competition for qualified personnel being intense in the industry[137]. Regulatory and Compliance Risks - Compliance with evolving data protection and privacy regulations is costly and may increase operational burdens, potentially impacting business performance[94]. - The company is subject to HIPAA regulations as a business associate, which imposes strict obligations regarding the handling of protected health information[97]. - Regulatory changes, including potential restrictions on pharmaceutical direct-to-consumer marketing, may create uncertainty for the company's operations[100]. - The evolving legal landscape may lead to increased costs and penalties for customers and partners, potentially resulting in lost business for the company[102]. - The company faces risks related to intellectual property protection, as failure to safeguard proprietary rights could adversely affect its competitive position[104]. Cybersecurity and Information Security - Cybersecurity incidents pose a risk to business operations, potentially leading to loss of critical data and reputational damage[106]. - The company’s information security program is designed to manage material risks from cybersecurity threats[157]. - The company transitioned from HITRUST certification to SOC 2 assessment in 2024, enhancing its information security framework[159]. - In 2024, the company stored certain PHI on secure AWS managed servers, ensuring encryption at rest and in transit[160]. - The company has a technical errors and omissions insurance with a cyber incident endorsement of up to $20 million, covering various cybersecurity-related costs[165]. - There were no material cybersecurity incidents reported in 2024 that affected the company's business strategy or financial condition[166]. Financial Position and Capital Structure - Total current assets as of December 31, 2024, were $54.0 million, while current liabilities were $18.7 million, resulting in working capital of $35.3 million and a current ratio of 3 to 1, consistent with the previous year[226]. - The company entered into a financing agreement on October 11, 2023, providing a $40.0 million term loan to partially fund the acquisition of Medicx Health[225]. - Working capital decreased slightly from $36.4 million in 2023 to $35.3 million in 2024, primarily due to an increase in accounts receivable and accrued expenses[226]. - The company does not anticipate the need for additional cash to support operations unless significant acquisitions are pursued[227]. - The market price of the company's common stock may be highly volatile, influenced by various factors beyond its control[142]. - The company has never declared or paid cash dividends on its common stock, and any return on investment may depend entirely on future appreciation in stock value[143]. - The company does not expect to pay dividends in the foreseeable future, intending to retain all available funds for future growth[143]. - The company is subject to anti-takeover provisions that could make it more difficult for third parties to acquire control[144]. Internal Control and Governance Issues - The company has identified a material weakness in its internal control over financial reporting, which could lead to material misstatements in future financial statements[150]. - The company’s internal control deficiencies could lead to significant expenses for remediation and a decline in stock price[152]. - The company faces risks from activist stockholders, which could disrupt operations and adversely affect financial performance[149].

OPTIMIZERx Corp. OPRX, a health care technology firm, reported on Wednesday fourth-quarter sales of $32.32 million, up 14% year-over-year, beating the consensus of $30.36 million.The company reported adjusted EPS of 30 cents, beating the analyst’s estimate of 27 cents.Full-year revenue increased 29% year-over-year, reaching $92.1 million. The company’s gross profit climbed 23% in the fourth quarter to $22 million, with full-year gross profit totaling $59.4 million.Adjusted EBITDA demonstrated significant gr ...

OptimizeRx Corporation (NASDAQ:OPRX) Q4 2024 Results Conference Call March 12, 2025 8:30 AM ET Company Participants Steve Silvestro - President Edward Stelmakh - Chief Financial Officer and Chief Operational Officer Andrew D'Silva - Senior Vice President of Corporate Finance Conference Call Participants Jared Haase - William Blair Anderson Schock - B. Riley Constantine Davides - Citizens JMP Richard Baldry - ROTH Capital David Grossman - Stifel Financial Eric Martinuzzi - Lake Street Jeff Garro - Stephens, ...

Financial Data and Key Metrics Changes - Fourth quarter revenue reached $32.3 million, a 14% increase from $28.4 million in the same period of 2023, driven by increased DAAP-related revenue streams [20] - Gross margin improved from 62.9% in Q4 2023 to 68.2% in Q4 2024, attributed to a favorable solution and channel partner mix [20] - Net loss for Q4 2024 was $0.1 million, significantly reduced from a net loss of $4.1 million in Q4 2023 [22] - Non-GAAP net income for Q4 2024 was $5.5 million, or $0.30 per diluted share, compared to $4.6 million, or $0.26 per diluted share in the prior year [22] - Adjusted EBITDA for Q4 2024 was $8.8 million, up from $5.8 million in Q4 2023 [22] Business Line Data and Key Metrics Changes - Average revenue for the top 20 pharmaceutical manufacturers was $2.9 million, a 22% increase year-over-year [24] - The average revenue from the top five customers reached over $9 million in 2024, with plans to elevate at least one more customer to this level in 2025 [13] Market Data and Key Metrics Changes - The net revenue retention rate improved to 121%, up from 105% in the previous year [24] - Revenue per FTE increased to $701,000, compared to $586,000 in the prior year [24] Company Strategy and Development Direction - The company aims to transition to a subscription-based revenue model, particularly for the data component of its DAAP offerings, to enhance revenue predictability and customer retention [16][36] - The strategic focus includes operational excellence, customer centricity, and expanding the unique value proposition with pharmaceutical partners [6][7] - The company is targeting to become a "Rule of 40" company over the next several years, balancing growth and profitability [16][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's position in the market, citing strong momentum heading into 2025 and a commitment to under-promise and over-deliver [72] - The company is closely monitoring external factors, including FDA approvals, which could impact the pharmaceutical industry's ability to bring products to market [80] Other Important Information - The company completed the Medicx Health acquisition in Q4 2023, which is expected to drive further growth and operational efficiencies [21] - The total addressable market (TAM) is estimated at $10 billion, indicating significant growth potential in an underpenetrated market [17] Q&A Session Summary Question: Focus on customer centricity and strategy changes - Management emphasized increasing customer centricity and ensuring a pleasurable experience for clients, aiming to make it easier for them to renew and expand their business [30][31] Question: Impact of transitioning to subscription-based revenue - The transition to a subscription model is expected to create more predictable and recurring revenue, with a significant push towards this goal [35][36] Question: Gross margin expansion drivers - Gross margin expansion was driven by product mix, particularly from DAAP-related revenues, and while the current level is high, it may not be sustainable long-term [42][46] Question: Visibility into new deals and backlog - The company reported strong demand for new DAAP deals and improved visibility into contracted revenue for 2025, indicating a positive outlook [50][53] Question: Timeframe for becoming a Rule of 40 company - Management indicated that achieving the Rule of 40 is expected to take 3 to 5 years, with a focus on both top-line growth and EBITDA expansion [58][60] Question: Competitive environment and market dynamics - The competitive landscape is evolving, with new entrants in the DTC space, but the company maintains a strong position due to its unique ability to integrate HCP and DTC marketing [111][112]

Company Performance - OptimizeRx Corp. reported quarterly earnings of $0.30 per share, exceeding the Zacks Consensus Estimate of $0.25 per share, and up from $0.26 per share a year ago, representing an earnings surprise of 20% [1] - The company posted revenues of $32.32 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 9.58%, compared to year-ago revenues of $28.37 million [2] - Over the last four quarters, OptimizeRx has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Outlook - The stock has underperformed, losing about 14.8% since the beginning of the year, while the S&P 500 declined by 5.3% [3] - The current consensus EPS estimate for the coming quarter is -$0.05 on revenues of $21.28 million, and for the current fiscal year, it is $0.35 on revenues of $101.3 million [7] - The estimate revisions trend for OptimizeRx is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Computer - Software industry, to which OptimizeRx belongs, is currently in the top 29% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Q4 2024 revenue increased 14% year-over-year to $32.3 million, with full year revenue reaching $92.1 million, a 29% increase compared to 2023[3] - Q4 gross profit rose 23% year-over-year to $22.0 million, resulting in a gross margin of 68%[3] - Net revenue for the year ended December 31, 2024, increased to $92,127 million, up from $71,522 million in 2023, representing a growth of 28.8%[23] - Gross profit for the year ended December 31, 2024, was $59,378 million, compared to $42,900 million in 2023, reflecting a 38.4% increase[23] - Adjusted EBITDA for Q4 2024 was $8.8 million, a 53% increase from $5.8 million in Q4 2023, with full year Adjusted EBITDA at $11.7 million[7] - Adjusted EBITDA for the year ended December 31, 2024, was $11,730 million, compared to $3,574 million in 2023, representing a significant increase[29] - Non-GAAP net income for the year ended December 31, 2024, was $6,162 million, up from $4,425 million in 2023, showing a growth of 39.3%[29] Loss and Expenses - GAAP net loss for Q4 2024 was $(0.1) million, or $0.00 per share, while the full year net loss totaled $(20.1) million, or $(1.10) per share[7] - The net loss for the year ended December 31, 2024, was $20,110 million, compared to a net loss of $17,566 million in 2023, indicating a deterioration of 8.8%[23] - Total operating expenses for the year ended December 31, 2024, were $73,084 million, an increase from $69,302 million in 2023, marking a rise of 5.4%[23] - Stock-based compensation for the year ended December 31, 2024, was $11,467 million, down from $13,717 million in 2023, indicating a reduction of 16.4%[26] Cash Flow and Liquidity - Cash and cash equivalents as of December 31, 2024, were $13.4 million, with net cash provided by operating activities at $4.9 million for the year[7] - Cash provided by operating activities for the year ended December 31, 2024, was $4,889 million, a recovery from cash used of $7,240 million in 2023[26] - The company reported a cash and cash equivalents balance of $13,380 million at the end of the period, down from $13,852 million at the beginning of the period[26] Customer and Market Insights - Net revenue retention improved to 121% in 2024, up from 105% in 2023[2] - Average revenue per top 20 pharmaceutical manufacturer increased to $2,933,000 in 2024 from $2,399,000 in 2023[2] - The company generated revenue from 48 DAAP deals in 2024, up from 24 in 2023[3] - The company aims to transition DAAP customers to a subscription-based model to improve margins and reduce business cyclicality[2] Future Outlook - The company expects full year 2025 revenue to be at least $100 million, with Adjusted EBITDA of at least $12 million[5] - The weighted average number of shares outstanding for the year ended December 31, 2024, was 18,292,935, compared to 17,124,801 in 2023, reflecting an increase in shares[23]

Core Insights - OptimizeRx Corp. reported strong financial results for Q4 and full year 2024, exceeding expectations and consensus estimates, with a focus on leveraging its industry leadership to address critical challenges in the pharmaceutical sector [1][5][7] Financial Performance - Q4 revenue reached $32.3 million, a 14% increase year-over-year from $28.4 million in Q4 2023 [4][5] - Full year revenue for 2024 was $92.1 million, representing a 29% increase compared to $71.5 million in 2023 [5][21] - Q4 gross profit increased 23% year-over-year to $22.0 million, with a gross margin of 68% [4][5] - Full year gross profit totaled $59.4 million [5] - Non-GAAP net income for Q4 was $5.5 million, or $0.30 per diluted share, while for the full year it was $6.2 million, or $0.34 per diluted share [5][25] - Adjusted EBITDA for Q4 was $8.8 million, a 53% increase from $5.8 million in Q4 2023 [5][26] Key Performance Indicators - Average revenue per top 20 pharmaceutical manufacturer increased to $2.933 million in 2024 from $2.399 million in 2023 [2] - Net revenue retention improved to 121% in 2024 from 105% in 2023 [2] - The percentage of total revenue attributable to the top 20 pharmaceutical manufacturers was 64% in 2024, down from 67% in 2023 [2] Strategic Outlook - The company aims to achieve at least $100 million in revenue and an Adjusted EBITDA of at least $12 million for the full year 2025 [7] - A strategic focus on transitioning DAAP customers to a subscription-based model is expected to improve margins and reduce business cyclicality [1][5]

Core Points - OptimizeRx Corp. has received a notice from Whetstone Capital Advisors, LLC regarding the nomination of two candidates for the Board of Directors at the 2025 Annual Meeting of Stockholders [1] - The Board of Directors will provide a formal recommendation on the nominations in the definitive proxy statement to be filed with the SEC [2] Company Overview - OptimizeRx is a leading healthcare technology company that connects life science brands with patients and healthcare providers through innovative AI-driven tools [3] - The company focuses on patient-centric technology, ensuring meaningful interactions that deliver therapies to the right patients at the right time [4] Proxy Statement Information - OptimizeRx plans to file proxy materials with the SEC for the 2025 Annual Meeting, including a definitive proxy statement and a WHITE proxy card [6] - Stockholders are encouraged to read the proxy statement and related documents carefully when available, as they will contain important information [7] Participant Information - The company, its directors, and certain executive officers may be deemed "participants" in the proxy solicitation for the 2025 Annual Meeting [8]

Core Viewpoint - OptimizeRx Corp. has appointed Steve Silvestro as the new Chief Executive Officer, effective March 10, 2025, to lead the company into its next phase of growth and transformation [1][3]. Company Leadership - Steve Silvestro has over 20 years of experience in health technology and services, having joined OptimizeRx in 2019 as Chief Commercial Officer and later serving as President and interim CEO [2][4]. - The Board of Directors conducted a thorough search for the new CEO, resulting in a unanimous decision to appoint Silvestro, who has been pivotal in enhancing the company's brand relevance and capabilities [3]. Strategic Focus - Silvestro aims to differentiate OptimizeRx through technology and strategic partnerships, emphasizing operational excellence and customer satisfaction [3]. - The company has completed a strategic review of its business processes and is focused on increasing recurring revenue and becoming a "Rule of 40" company, which refers to a combined growth and profit margin of 40% [3]. Company Overview - OptimizeRx is a leading healthcare technology company that connects life science brands with patients and healthcare providers through innovative AI-driven tools [5][6]. - The company is headquartered in Waltham, Massachusetts, and partners with major pharmaceutical and life sciences companies to improve healthcare outcomes [6].