OptimizeRx Corporation

You're currently on hold for this OptimizeRx Corporation first quarter 2021 conference call. At this time, we're still gathering additional participants and plans to be underway shortly. We appreciate your patience and please remain on the line. Good afternoon. Thank you for joining us today to discuss OptimizeRx Corporation's first quarter ended March 31st, 2021. Speaking on the call today is OptimizeRx's Chief Executive Officer, William Febo, and the company's Chief Financial Officer, Doug Baker. Miriam Paramore, the company's Chief Strategy Officer and Chief Commercial Officer. Steven Silvestro will be present for the Q&A. Following the remarks, they will open the call for questions. Before we conclude today's call, I'll provide some important cautions regarding the forward-looking statements made by management during today's call. I'd like to remind everyone that today's call is being recorded and will be made available for replay via webcast only and instructions in today's press release and the investor section of the company's website. Now I'll turn the call over to OptimizeRx CEO, Will Felbo. Sir, please go ahead.

Thank you, Ron. Good afternoon, everyone, and thanks for joining us on the call today. I am excited to report that we've had a very strong start to the new fiscal year. In fact, a stronger start than any other year over year in my tenure. At a high level, we grew the quarter's top line revenue by 48% as compared to a year ago period. We did this while ramping our digital health platform with additional reach to HCPs and patients, new solutions for our clients, and an enhanced team to support further enterprise growth as we see it in front of us. In many ways, the quarter's financial performance has been underpinned by the company's core DNA. From our management team to each of our employees, team members, we have built an incredibly vibrant technology business, built on the enhancement of stakeholder engagement and aligned to the patient journey. Moreover, we're expanding our core capabilities, which is a testament to the scalability of the technology, its relevance to our clients and partners, and the ingenuity of our team. We have gone to great lengths to ensure that the business is able to support the growth of our future revenue streams, and we are already seeing those revenue streams begin to bear fruit early on in 2021. In serving as digital bridge across stakeholder classes, our platform not only sits centrally to all involved, but it goes further to positively impact the lives of people daily. When we talk about our platform and the patient journey, we're referring to the physician engagement directly with the patient, which is commonly referred to as at the point of care. Our integrated platform serves as a physician's resource for on-demand therapeutic knowledge while simultaneously improving affordability and adherence for patients seeking treatment. Outside their direct care setting, the platform helps life science implement scalable and personalized support programs that effectively aid patients in managing their treatment in accordance with their overall health goals. The outcomes produced from these remote care engagements have exceeded our expectations, and we anticipate will continue to scale over time. We are continuously optimizing our platform, removing the complexities and hurdles around connectivity between doctors, patients, and manufacturers. Because our platform is so seamlessly integrated into the HCP workflows, physicians find that our services are complementary and a welcome supplement to their critical decision-making process in their patient's care journey. Likewise, manufacturers are relieved that they do not have to navigate individual access to the hundreds of EHR systems that physicians are operating in. As a result of these efforts, demand for our services remains strong. And we continue to focus on capturing recurring enterprise revenues. We announced 46 deals in the pipeline on our Q4 earnings call. And as of today, we've closed 33 of those deals, which include client renewals totaling 25 million in annual contract value. And we expect to close an additional 15 million of the 50 million we discussed in the last call. Tremendous work by the team. Our land and expand strategy is working as we are penetrating more clients and they are engaging more of our solutions, a key indicator of our scalability and ever-growing total addressable market. As we have repositioned our sales and marketing efforts to drive higher dollar contracts within our client base, the average value of recently won contracts was close to $1 million, about 3x from previous years. We continue to experience a strong renewal rate exceeding the 86% we've talked about, which is garnered by a continued solid third-party return on investment or ROI from fiscal year 2002 programs. As you can see from our results that were posted earlier, our financial and operational performance is highly insulated from macro shocks as the acceleration and adoption of digital health remains a long-term trend. Doug will go into this a bit more detail later. But I wanted to point out that we have strengthened our balance sheet with a public offering in February. The raise has provided us with a strengthened foundation to execute on our strategic goals without delay, including building out innovative solutions, as well as entertaining any opportunistic M&A activity we may come across. Moreover, we closed the transaction without having the structure diluted of instruments into the deal. In watching the adoption rate of digital health explode even through the pandemic, we believe that shoring up our balance sheet was a wise move. Our improved operating leverage will allow us to navigate our growing total addressable market in addition to any potential needs related to periods of rapid customer acquisition. As COVID vaccinations bring about additional demand for doctor's visits that may have been delayed in 2020, as well as pimped up demand for new medications whose launches were impeded. We wanted to ensure that we are correctly positioned to capture any additional opportunistic recurring revenue. In thinking about the digital transformation fueling our industry, we really have put a lot of time and effort into the scalability of our platform, and we've worked diligently with our partners to develop new digital services to improve the way doctors engage with their patients. As we operate on a unified technology backbone, new services can easily be added to existing client subscriptions. In terms of expectations, the solid growth that we have experienced so early in the year has historically been indicative of further growth moving into the latter periods, and we are expecting 2021 to follow suit in this regard. This growth is driven by the evolution of our digital health platform. We are not simply distributing savings at point of prescribed. One of OptimizeRx's big differentiators is its full suite of capabilities that goes beyond financing communications, allowing for multiple touchpoints between stakeholder classes through the physician's workflow, both inside and outside the care setting. All our solutions are deeply connected into major EHR platforms so doctors can deliver better, well-informed patient care. As you saw from our recent announcement, we've now expanded our omni-channel platform reached to over 50% of oncologists in the U.S. through our latest health information technology partnerships. With oncology projected to be the fastest growing segment in the life sciences market with over 12% in 2021, this expansion unlocks new ways for life sciences to engage specialists such as oncologists in a more timely and impactful way along the care journey. The effort to unlock these omni-channel avenues of engagement under our health information technology partnerships has been well received by life science organizations and doctors alike. A great example of these efforts is the build-out of personalized and specialized resources, such as in the oncology space. Treatment decisions in oncology often involve multiple stakeholders in a series of evaluations and decision points. Having our technology integrated at multiple points of workflow enables us to engage with the entire team working to support the needs of the patient to ensure the best possible outcome is achieved. In terms of value-add and new revenue drivers, we've seen great response to and growing demand for real-world evidence solutions since its announcement in Q4 of 2020. The industry has seen how transformative this enhancement is, to the accurate delivery of therapeutic support and brand messages to clinicians at critical points in the patient's care journey. What is great about the evolution of our technology stack is just how much effort we've put into making the doctor's workflow easier, from reducing the number of clicks in which a physician needs to go to access treatment information, to providing one-click access to drug manufacturers via Telerep without ever having to leave their primary workflow system. On the technology front, we've added two centers of excellence in 2021, focusing on two areas critical to our ability to scale both organically and with potential M&A going forward. One is a dedicated and centralized quality and insurance unit for the enterprise. And the second one is for the consolidation of our data analytics and business intelligence unit into a dedicated insights and analytics unit. The team is also very proud to be recognized for their work and innovation. We're thrilled to have named on the Financial Times American Fast-Growing Company Ranking for the second year in a row. It's always terrific to see our team's efforts and continue to drive to innovate being recognized. And I wanted to call attention to this nomination and recognition of all the hard work the team has put into building a vibrant technology business. Now I'd like to turn the call over to our CFO, Doug Baker, who will walk us through the financial details for 2021's first quarter. Doug?

Thanks, Will, and good afternoon, everyone. Earlier today, we issued a press release with the results of our first quarter ended March 31, 2021. The copy is available for viewing and may be downloaded from the investor relations section of our website. We also filed our 10-Q today. Now let's turn to our financial results for the first quarter ended March 31, 2021. Our revenue for the quarter was $11.2 million, an increase of 48% over the $7.6 million from the same period in 2020. This increased revenue resulted from across-the-board increases in almost all of our solutions. Our gross margin declined from 57% in the quarter ended March 31, 2020 to 55% in the quarter ended March 31, 2021 as a result of solution banks. Our gross margin for the entire calendar year of 2020 was 56%, and our target for the full year of 2021 is 58%. We expect our gross margin to improve on a quarter-over-quarter basis for the balance of the year as we launch new solutions that have higher margins. Our operating expenses increased from $6.6 billion for the three months ended March 31, 2020, to $6.8 million for the same period in 2021, an increase of only 2.5%. Overall, this modest increase is the result of our efforts to expand our product line and build out our organization to establish a strong base for current and future growth. Our expenses increased at a substantially lower rate than our revenues as a result of the operating leverage in our model, 2.5% for expenses versus 48% for revenue. We expect this trend to continue. However, we are not going to hesitate to make investments in future revenue growth when we see the opportunity to do so. We would expect operating expenses to increase at higher rates in future quarters based on the potential we see, but still at a much lower rate than the revenue increase. We had a net loss of $600,000 or $0.04 per basic and fully diluted share for the three months ended March 31, 2021, as compared to a net loss of $2.2 million or $0.15 on a basic and fully diluted basis during the same period in 2020. Overall, while we've begun to ramp up team expansion and expenses to reflect this, the decreased loss resulted from an increased margin generated by our higher revenue, partially offset by the increased operating expenses. On a non-GAAP basis, net income for the first quarter of 2021 was $596,000, or $0.04 per basic and $0.03 per fully diluted share. As compared to a non-GAAP, net loss of $830,000, or $0.06 per basic and fully diluted share in the same year ago period. Now turning to the balance sheet, cash and cash equivalents totaled $83 million at March 31st compared to $10.5 million at December 31st. This was a result of the equity offering in February where we raised $71 million. We plan to use these funds to further expand our business and accelerate revenue growth. Our receivables remain very high quality because of our customer base and recurring revenues. Our customers continue to pay regularly and predictably, and our day sales outstanding continues to be constant. We remain debt-free and do not anticipate needing to raise additional capital anytime soon, either for operating purposes or to fund our growth. We also have no remaining liabilities connected to our previous acquisitions. This wraps up the discussion of our financial results. Now I'd like to turn the call back over to Will. Will?