OptimizeRx(US:OPRX)2023-05-11 02:44Financial Data and Key Metrics Changes - Revenue for Q1 2023 was $13 million, slightly down from $13.7 million in Q1 2022, attributed to macro headwinds [48] - Gross margin decreased from 59% in Q1 2022 to 57.2% in Q1 2023, slightly below the lower end of the annual gross margin range [22] - Net loss for Q1 2023 was $6.4 million or $0.37 per share, compared to a net loss of $3.8 million in Q1 2022 [23] - Cash, cash equivalents, and short-term investments totaled $73.7 million as of March 31, 2023, down from $74.1 million at the end of 2022 [24] - Net revenue retention rate declined to 86% due to macroeconomic factors [53] Business Line Data and Key Metrics Changes - Average revenue per top 20 pharmaceutical manufacturer stood at $2 million as of Q1 2023, with the company working with 18 of the top 20 [25] - The RWD-AI offering is expected to increase at least 100% year-over-year and approach 20% of total revenue for 2023 [41] - Operating expenses increased from $11.9 million in Q1 2022 to $14.5 million in Q1 2023, a 22% increase [49] Market Data and Key Metrics Changes - The company noted a shift in pharma spending towards omnichannel solutions, with over $10 billion in digital commercial spend being reallocated [17] - The engagement focus is on determining drug eligibility and affordability, which is expected to enhance access to coverage information for pharma-sponsored patient support programs [10] Company Strategy and Development Direction - The company is enhancing its platform for smart targeting using AI, which is expected to improve customer engagement and ROI [9] - The focus is on expanding service offerings outside of EHR to capture a greater portion of the available industry white space [43] - The company aims to position itself as a strategic partner for pharma, moving from tactical to more integrated solutions [44] Management's Comments on Operating Environment and Future Outlook - Management indicated that the macro environment is returning to normalcy despite recent banking crises, with pharma gaining comfort in the resolutions implemented [14] - The company expects to maintain its full-year revenue outlook, projecting at least a 10% year-over-year increase [40] - Management expressed confidence in the growth potential of the RWD-AI solutions, highlighting significant deal discussions and expansions [15][41] Other Important Information - The company is continuously evaluating M&A opportunities that align with its strategic priorities [51] - The management emphasized the importance of transparency in reporting and the need for pharma to establish standards as they scale investments in digital health [19] Q&A Session Summary Question: Insights on Data Financial Assistance programs in pharma - Management noted that financial messaging has been declining but is becoming more targeted, which benefits their RWD-AI solutions [31][32] Question: Recovery timeline for tactical sales impacted by macro headwinds - Management indicated that tactical sales can be adjusted quickly and are expected to improve as the macro environment stabilizes [34] Question: Magnitude of change in tactical sales pipeline compared to Q4 - Management refrained from providing specific pipeline numbers but noted increased business activity year-over-year [37] Question: Visibility into revenue guidance for the second half of the year - Management confirmed a healthy backlog and expressed confidence in meeting current guidance [67] Question: Impact of expanding outside EHR on strategy - Management highlighted the importance of meeting physicians where they are and the ability to report back physician-level data as key differentiators [95][116] Question: Thoughts on generative AI's impact on the business - Management acknowledged the trend but emphasized that they have been implementing machine learning through RWD-AI for the past two and a half years [117] Question: Expected impact from the hub service agreement - Management indicated that the agreement is expected to enhance their capabilities in patient assistance programs [108]