OptimizeRx(US:OPRX)2023-08-14 22:54Financial Data and Key Metrics Changes - The company reported Q2 revenue of $13.8 million, a slight decrease from $14 million in the same period in 2022, primarily due to macro headwinds and program approval delays [47][35] - Gross margin decreased from 64.3% in Q2 2022 to 56.6% in Q2 2023, slightly below the lower end of previous annual guidance, attributed to solutions and channel partner mix [47][35] - The company adjusted its gross margin guidance for the year from 58%-62% to a new range of 55%-59% [47] - Operating expenses remained consistent year-over-year at $12.7 million for Q2 2023 compared to $12.9 million in Q2 2022 [48] - The net loss for Q2 2023 was $4.2 million, or $0.24 per share, compared to a net loss of $3.9 million in Q2 2022 [48] - Non-GAAP net loss for Q2 2023 was $0.2 million, or $0.01 per share, compared to a non-GAAP net income of $0.7 million, or $0.04 per share, in the same period last year [49] - Cash and cash equivalents totaled $62.7 million as of June 30, 2023, down from $74.1 million at the end of 2022, primarily due to a share repurchase program [50] Business Line Data and Key Metrics Changes - The company closed three additional RWD.AI deals in Q2, bringing the total to nine, indicating strong market execution [82][1] - Average revenue per top 20 pharmaceutical manufacturer remained stable at $2 million, with continued engagement from 18 of the top 20 largest pharma companies [67] Market Data and Key Metrics Changes - The company noted that the current pharma digital total addressable market (TAM) spend exceeds $10 billion and is continuing to grow [23] - The company is experiencing a slowdown in decision-making and spending within the pharma community, attributed to increased scrutiny and the need for transparency [41][35] Company Strategy and Development Direction - The company is focusing on optimizing resources towards its AI-enabled healthcare technology platform, which has seen 186% year-over-year growth [63] - The strategy includes reducing cash operating expenses by at least 10% going into 2024, while continuing to build out the platform for clients [62] - The company is actively seeking M&A opportunities that align with strategic priorities at more attractive valuations compared to the previous year [51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the renewal of RWD.AI deals, indicating that these solutions are "sticky" and likely to continue generating revenue [5] - The company anticipates a successful second half of 2023, with programs deploying in early 2024, setting the stage for growth [17] - Management acknowledged ongoing macro headwinds, including FDA approval delays and market noise, but believes these will subside as the year progresses [18][19] Other Important Information - The company is committed to addressing current disruptions and is focused on meeting pharma's digital needs [23] - The company plans to communicate further with investors prior to the third quarter earnings call [24] Q&A Session Summary Question: What are the biggest variables affecting guidance for the remainder of the year? - Management highlighted medical legal reviews, macro headwinds, and non-core business weakness as contributing factors to the lower outlook [77] Question: Can you provide details on the new RWD deals? - Management confirmed that the three new RWD deals are similar in structure to the first six and are expected to ramp up in the near future [82]