OptimizeRx(US:OPRX)2023-03-09 03:23Financial Data and Key Metrics Changes - The reported revenue for Q4 2022 was $19.7 million, a decrease of 3% from $20.3 million in the same period in 2021 [33] - The company expects a revenue increase of at least 10% year-over-year for the full year of 2023, with Q1 revenue guidance between $11.5 million and $13 million [13][49] - Gross margin for Q4 increased from 61% to 63%, with full-year 2023 gross margin guidance between 58% and 62% [8][33] Business Line Data and Key Metrics Changes - The average revenue for the top 20 pharmaceutical manufacturers declined nearly 14% year-over-year to $2.1 million due to extended deal closing timelines and higher turnover rates [13] - The net revenue retention rate declined to 90% due to macroeconomic factors impacting client programs [14] Market Data and Key Metrics Changes - The company reported a net loss of $325,000 in Q4 2022 compared to a net income of approximately $623,000 in Q4 2021 [10] - Cash flow from operations was $10.7 million for 2022, with $2.8 million generated in Q4 [11] Company Strategy and Development Direction - The company is following a land-and-expand strategy, focusing on delivering superior ROI, which remains above a 10:1 ratio [7] - The company aims to capture a greater portion of the available industry white space over the next three to five years, with total industry digital spend exceeding $10 billion [24][25] - The strategic positioning is expected to yield significant dividends over the next three to five years, with revenue projected to increase to multiples of current levels [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the backlog being stronger than in previous years, indicating a potential for at least 10% growth [19][20] - The competitive landscape is crowded, but the company believes it has a unique data set and strong client response due to its integrated solutions [22][26] - Management acknowledged macroeconomic headwinds but noted positive trends since mid-2022, taking a conservative approach to guidance [49][52] Other Important Information - The company repurchased 1.2 million shares at an average price of $16.49, reducing total outstanding shares by nearly 7% [12] - Operating expenses increased to approximately $13.3 million in Q4 2022, primarily due to stock-based compensation and the EvinceMed acquisition [9][34] Q&A Session Summary Question: What is the revenue outlook for the year? - Management expects a drop in revenue of about 11% year-over-year in Q1 but anticipates 10% growth for the full year, with a stronger backlog [1][19] Question: How much of the growth is contracted versus needing to be won? - Typically, the company has 40% to 60% visibility for the rest of the year, which supports the 10% growth target [3] Question: What are the impacts of competition on specific products? - The competitive environment has increased, elongating the sales cycle, but the company believes its unique offerings will prevail [5][21] Question: What is the management's view on pharma's engagement with digital solutions? - There is a positive trend in pharma's engagement with digital solutions, with a focus on ROI and the need for effective communication with healthcare providers [39][42] Question: What are the expectations for the RWE pipeline? - The RWE pipeline contains several dozen deals, primarily from existing clients looking to upgrade, indicating a robust growth opportunity [69][70]