Core Viewpoint - OptimizeRx Corp. reported quarterly earnings of $0.08 per share, exceeding the Zacks Consensus Estimate of a loss of $0.11 per share, marking a significant earnings surprise of 172.73% [1] - The company has consistently surpassed consensus EPS estimates over the last four quarters [2] Financial Performance - For the quarter ended March 2025, OptimizeRx posted revenues of $21.93 million, which is a 15.86% increase compared to the Zacks Consensus Estimate and an increase from $19.69 million year-over-year [2] - The company has topped consensus revenue estimates two times in the last four quarters [2] Stock Performance - OptimizeRx shares have increased by approximately 105.6% since the beginning of the year, contrasting with a decline of 3.8% in the S&P 500 [3] - The stock's immediate price movement will depend on management's commentary during the earnings call [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.01 on revenues of $21.43 million, while for the current fiscal year, it is $0.40 on revenues of $101.98 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 [6] Industry Context - The Computer - Software industry, to which OptimizeRx belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook [8] - The top 50% of Zacks-ranked industries outperform the bottom 50% by more than a factor of 2 to 1 [8]

Financial Data and Key Metrics Changes - Q1 2025 revenues increased by 11% year over year to $21,900,000, with adjusted EBITDA improving to $1,500,000, an increase of nearly $2,000,000 year over year [3][10] - Gross margin decreased from 62% in Q1 2024 to 60.9% in Q1 2025, primarily due to product and channel partner mix [9][10] - The company reported a net loss of $2,200,000 or $0.12 per share for Q1 2025, compared to a net loss of $6,900,000 or $0.38 per share in Q1 2024 [10] - Operating cash flow was $3,900,000, with a cash balance of $16,600,000 at the end of the quarter [11] Business Line Data and Key Metrics Changes - Average revenue per top 20 pharmaceutical manufacturer is approximately $3,000,000, representing 63% of the business in Q1 2025 [13] - Net revenue retention rate remains strong at 114% [13] Market Data and Key Metrics Changes - Committed contracted revenue exceeded $70,000,000, a greater than 25% improvement year over year [11][12] - The company is seeing early momentum in transitioning to a subscription-based model, with over 5% of projected annual revenue already converted to subscription contracts for 2025 [4][12] Company Strategy and Development Direction - The company aims to achieve Rule of 40 performance in the coming years, focusing on operational excellence and customer relationships [4][6] - A key focus will be on improving brand visibility, reducing script abandonment, and supporting the shift toward complex specialty medications [8] - The company is uniquely positioned to drive significant value creation and deliver long-term sustainable shareholder growth by leveraging its point of care network [6][7] Management's Comments on Operating Environment and Future Outlook - Management has not seen significant headwinds impacting the business despite market noise related to tariffs and price negotiations [4][19] - The company is confident in its ability to fund operating needs and strategic priorities, with a strong working capital position [11][12] - Management is optimistic about capturing greater market share and expanding the overall size of pharma's digital spend, which exceeds $10 billion annually [8] Other Important Information - The company is focused on building a diversified portfolio to meet customer needs, with a goal to increase gross margins over time [10][95] - The transition to subscription revenue is expected to smooth out revenue recognition and enhance margins [24][96] Q&A Session Summary Question: Concerns about market noise and customer hesitation - Management has not seen any pullback from clients and is receiving real-time feedback indicating a leaning into digital channels [19][20] Question: Impact of subscription-based revenue on revenue recognition - Subscription revenue spreads over a twelve-month period, with low cost of sales, making it accretive to the company [24][25] Question: Future gross margin expectations - The company aims to increase gross margins above the low 60% range, with diversification mitigating material impacts [26][30] Question: Visibility on committed revenue - Committed revenue is north of 80%, indicating strong visibility for the year [34][35] Question: Pipeline growth and win rates - The pipeline continues to grow steadily, with improved conversion ratios, particularly in data and subscription components [80] Question: Subscription deal structure - Current subscription deals are one-year evergreen arrangements, with plans to transition to multi-year deals in the future [83] Question: Revenue guidance correlation with EBITDA - The high end of revenue guidance correlates with the high end of EBITDA, with gross margin being the main variable [84]

Financial Data and Key Metrics Changes - Q1 2025 revenues increased by 11% year over year to $21.9 million, with adjusted EBITDA improving to $1.5 million, a nearly $2 million increase year over year [3][10] - Gross margin decreased from 62% in Q1 2024 to 60.9% in Q1 2025, primarily due to product and channel partner mix [9][10] - The company reported a net loss of $2.2 million or $0.12 per share for Q1 2025, compared to a net loss of $6.9 million or $0.38 per share in Q1 2024 [10] - Operating cash flow was $3.9 million, with a cash balance of $16.6 million at the end of Q1 2025 [11] Business Line Data and Key Metrics Changes - Contracted revenue increased by over 25% year over year, exceeding $70 million as of the end of Q1 2025 [11] - Average revenue per top 20 pharmaceutical manufacturer is approximately $3 million, representing 63% of business in Q1 2025 [12] - Net revenue retention rate remains strong at 114%, with revenue per FTE increasing to $710,000 from $641,000 in Q1 2024 [12] Market Data and Key Metrics Changes - The company is experiencing early momentum in transitioning to a subscription-based model, with over 5% of projected annual revenue already converted to subscription contracts for 2025 [4][5] - The digital pharma marketing landscape is undergoing significant shifts, with the company positioned to reshape engagement between pharmaceutical companies, patients, and prescribers [5][6] Company Strategy and Development Direction - The company aims to address critical commercialization challenges in the pharma industry, including improving brand visibility and supporting the shift towards specialty medications [8] - Focus on operational excellence and customer relationships is expected to drive significant shareholder value [5][8] - The company is targeting Rule of 40 performance in the coming years, emphasizing disciplined cost management and targeted upselling strategies [4][5] Management's Comments on Operating Environment and Future Outlook - Management has not observed significant headwinds impacting the business despite market noise related to tariffs and price negotiations [4][18] - There is confidence in the ability to fund operating needs and strategic priorities, with a strong working capital position [11] - The company anticipates continued growth and is optimistic about achieving revenue guidance of $101 million to $106 million for the year [4][11] Other Important Information - The company is leveraging one of the largest point of care networks in the country to connect pharmaceutical manufacturers with healthcare providers [5][6] - The transition to subscription-based revenue is expected to smooth revenue recognition over time, enhancing financial stability [21][37] Q&A Session Summary Question: Concerns about market noise and customer hesitation - Management has not seen any pullback from clients and reports that customers are leaning into digital channels more than before [18][19] Question: Impact of subscription-based revenue on revenue recognition and margins - Subscription revenue spreads over a twelve-month period, but it is expected to be accretive due to low cost of sales [21][24] Question: Gross margin outlook - Current gross margin is expected to remain in the low 60% range, with efforts to increase it above that level [25][27] Question: Visibility on revenue and backlog - Committed revenue is north of 80%, indicating strong visibility for the year [31][32] Question: New business and RFP season performance - Both DTC and DAP components of the business are performing well, contributing to increased guidance [57][58] Question: Pipeline growth and win rates - The pipeline continues to grow steadily, with improved conversion ratios, particularly in data and subscription components [70][71] Question: Subscription deal structure - Current subscription deals are one-year evergreen arrangements, with plans to transition to multi-year deals in the future [73] Question: Guidance correlation between revenue and EBITDA - High-end revenue guidance correlates with high-end EBITDA, with a focus on gross margin mix being a key factor [75]

Revenue Performance - Q1 2025 revenue reached $21.9 million, an 11% increase year-over-year from $19.7 million in Q1 2024[1] - Full-year 2025 revenue guidance raised to a range of $101 million to $106 million, with adjusted EBITDA expected between $13 million and $15 million[1][7] - Year-to-date contracted revenue is up more than 20% compared to the same period last year, indicating strong momentum[3] - Net revenue for Q1 2025 was $21,928 million, a 11.5% increase from $19,690 million in Q1 2024[24] Profitability - Q1 2025 gross profit increased by 9% year-over-year to $13.3 million, up from $12.2 million in Q1 2024[5] - Non-GAAP net income for Q1 2025 was $1.5 million, or $0.08 per diluted share, compared to a non-GAAP net loss of $(2.0) million, or $(0.11) per diluted share in Q1 2024[5] - Adjusted EBITDA for Q1 2025 increased to $1.5 million, compared to $(0.3) million in the same year-ago period[5] - Net loss for Q1 2025 decreased to $2,199 million from $6,899 million in Q1 2024, representing a 68.1% improvement[24] - Non-GAAP net income for Q1 2025 was $1,539 million, compared to a loss of $1,964 million in Q1 2024[29] - Adjusted EBITDA for Q1 2025 was $1,489 million, a significant improvement from a loss of $276 million in Q1 2024[30] Cash and Liquidity - Cash and cash equivalents totaled $16.6 million as of March 31, 2025, up from $13.4 million as of December 31, 2024[5] - Cash provided by operating activities for Q1 2025 was $3,864 million, an increase from $2,118 million in Q1 2024[26] - Cash and cash equivalents at the end of Q1 2025 were $16,573 million, up from $15,177 million at the end of Q1 2024[26] Customer Metrics - Over 5% of expected 2025 sales have been converted into subscription-based revenue streams, enhancing revenue stability[4] - Average revenue per top 20 pharmaceutical manufacturer increased to $2,960, up from $2,592 in 2024[6] - Net revenue retention stood at 114% for the twelve months ended March 31, 2025, compared to 116% in 2024[6] Operating Expenses - Operating expenses for Q1 2025 totaled $15,458 million, down from $17,233 million in Q1 2024, a reduction of 10.3%[24] Shareholder Metrics - Weighted average shares outstanding for diluted earnings in Q1 2025 were 18,579,012, compared to 18,170,108 in Q1 2024[29] - Loss per share for Q1 2025 was $0.12, an improvement from $0.38 in Q1 2024[24]

Core Insights - OptimizeRx Corp reported strong financial performance for Q1 2025, with revenue increasing by 11% year-over-year to $21.9 million, and gross profit rising by 9% to $13.3 million [7][8] - The company has raised its full-year revenue guidance to a range of $101 million to $106 million, with adjusted EBITDA expected between $13 million and $15 million [5][6][7] Financial Performance - Q1 2025 net revenue was $21.9 million, compared to $19.7 million in Q1 2024, marking an 11% increase [8] - Gross profit for Q1 2025 was $13.3 million, up from $12.2 million in the same period last year, reflecting a 9% increase [8] - The company reported a GAAP net loss of $(2.2) million or $(0.12) per share for Q1 2025, an improvement from a net loss of $(6.9) million or $(0.38) per share in Q1 2024 [8][22] Key Performance Indicators - Average revenue per top 20 pharmaceutical manufacturer increased to $2.96 million in 2025 from $2.59 million in 2024 [5] - The percentage of total revenue attributable to the top 20 pharmaceutical manufacturers decreased slightly to 63% in 2025 from 66% in 2024 [5] - Net revenue retention stood at 114% in 2025, down from 116% in 2024 [5] Strategic Outlook - The company has converted over 5% of its expected 2025 sales into subscription-based revenue streams, indicating a shift towards more stable revenue models [4] - CEO Stephen L. Silvestro expressed confidence in achieving "Rule of 40" performance in the coming years, driven by operational excellence and customer satisfaction [3][4]

Core Insights - OptimizeRx Corp. has published its 2025 Environmental, Social, and Governance (ESG) report, highlighting its commitment to corporate responsibility and stakeholder engagement [1][3] - The company improved its Institutional Shareholder Services (ISS) ESG rating from the seventh decile to the first decile, achieving prime status [3] Governance - The Board of Directors and the Nominating & Governance Committee are actively involved in aligning business strategies with corporate governance policies [8] - A double-materiality survey identified key stakeholder concerns in three areas: Data Protection, Ethics and Governance, and Human Capital [8] Planet - The 2025 ESG report includes enhanced disclosures on Scope 1 emissions and additional reporting on individual greenhouse gases [5] People - The company emphasizes impartiality in employment practices and aims to foster a culture of respect and inclusivity [9] - Initiatives such as the SPARK employee recognition program and a Competency Model have been introduced to enhance employee engagement and career progression [9] Prosperity - The Dynamic Audience Activation Platform (DAAP) has seen strong adoption, providing AI-enabled marketing solutions that connect life sciences, healthcare professionals, and patients [15] - The integration of Healthy Offers, Inc. enhances the company's data and analytics capabilities, expanding its stakeholder engagement [15]

Core Viewpoint - OptimizeRx Corp. will hold a conference call on May 12, 2025, to discuss its Q1 2025 financial results, which will be released prior to the call [1]. Group 1: Conference Call Details - The conference call is scheduled for May 12, 2025, at 4:30 p.m. Eastern Time [2]. - Participants can join via toll-free number 1-844-825-9789 or international number 1-412-317-5180, with Conference ID 10198829 [2]. - A webcast of the call will be available at the provided link [2]. Group 2: Company Overview - OptimizeRx provides innovative technology that enhances engagement between life sciences organizations, healthcare providers, and patients [4]. - The company has the capability to synchronize messaging across 2 million healthcare providers and over 240 million adults through various digital channels [4].

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 ...