OptimizeRx Corporation

Good afternoon, and thank you for joining OptimizeRx's fourth quarter fiscal 2021 earnings discussion. With us today is the Chief Executive Officer of OptimizeRx, William Fabo. He is joined by Company Chief Financial Officer, Ed Stelmach, Chief Commercial Officer, Stephen Silvestro, Executive Vice President of Finance and Accounting, Doug Baker, General Counsel and Chief Compliance Officer, Marion Odins-Ford, and Senior Vice President of Corporate Finance, Andrew DeSilva. At the conclusion of today's earnings call, I will provide some important cautions regarding the forward-looking statements made by management during today's call. I would like to remind everyone that today's call is being recorded and will be made available for replay by webcast only. Instructions are included in today's press release in the investor section of the company's website. Now, I'd like to turn the call over to OptimizeRx CEO, William Faber. Sir, please go ahead.

Thank you, Operator. Hi, everyone. I want to begin by thanking all of you for joining us today. While the last 12 months have been an exciting period of operational and commercial growth for OptimizeRx, we're even more excited for the year ahead as we move forward with continued momentum as a company. The major investments we've made over the last year have centered around setting up the organization for future scalable growth. We have completed a strategic build-out of Optimizer X's leadership team. On the solutions and digital enablement front, we launched several AI and data-centric solutions, expanding our strategic capabilities, positioning us well to focus more on the key markets, including specialty medications. And lastly, we made huge progress in building out additional reach to doctors and patients. In essence, we have invested in our three primary growth drivers to continue cultivating or organic growth trajectory. To illustrate this point and how we build customer stickiness as a technology partner to life sciences, earlier this week we announced the launch of a large-scale therapy initiation program with a top 10 pharma client. The program accelerates patients' access to a new specialty drug that can reduce inflammation for a chronic condition and significantly improve the quality of life for this previously underserved patient population. The pharma client is leveraging OptimizeRx's suite of digital solutions to streamline therapy initiation for these patients by ensuring that physicians have immediate electronic access to the appropriate enrollment forms needed to prescribe the medication. This is our largest enterprise-scale therapy initiation program launched to date. As the new specialty therapies continue entering a crowded market with complex requirements, and sometimes limited pharmacy distribution networks, Optimizer X is well positioned to help life sciences get patients on therapy quickly and more efficiently. We are very confident in our suite of solutions, and we continue to receive overwhelmingly positive client feedback. 2021 was the last year that enterprise deals remained a measure of our success and a proxy for execution. As an organization, we feel that we have surpassed this metric both in deal count as well as in the overall demand for bundled solution sets. We have put forward a new set of performance metrics against which to measure our success. Ed and Andy's leadership have been key as they hit the ground running since joining our team and led the development of relevant key performance indicators, KPIs, that best represent our land and expand strategy within key customer accounts. As a proxy for execution, The KPIs that we introduced in advance of this call include the company's penetration within the top 20 largest pharmaceutical manufacturers, net revenue retention, and revenue per employee, which Ed will go into more detail later. From a customer capture perspective, we now serve nearly all of the top 20 large pharma manufacturers who represent the largest portion of the industry's marketing spend. Our KPIs are important from this perspective as the pharmaceutical industry is dominated by large companies with multiple brands. So our revenue is naturally going to be concentrated within these larger entities. For example, more than three quarters of our net revenue for last year was generated through these industry bellwethers as we deepened our relationship with large pharma and their brands. We're also starting to generate more revenue per employee, which is a testament to our operational efficiency and ability to scale. And to give you an idea of the market opportunity, our footprint in the top 20 pharma is positioning us to compete and win our share of the largest categories of addressable commercial spend, which in turn will be communicated in a transparent and measurable fashion. This focus on penetration and capturing a large share of wallet within pharma is going to be a strategic imperative for 2022 and a core to our ability to grow revenues while meeting or exceeding our financial targets. As a baseline, we believe that our total addressable market for digital-enabled solution is in the billions of dollars. Based on that, we estimate that we have captured less than 5% of this rapidly emerging market, making us confident our growth will continue. This year, we've been even more focused on helping life science companies leverage the power and reach of our platform's technology. We are helping them bring therapeutic awareness to both patients and providers, and just as importantly, assisting patients to start and stay on life-impacting therapies. As a healthcare technology company, we are thrilled at the opportunity to positively affect therapeutic outcomes through the application of modern data practices and AI-driven solutions throughout the patient journey at the point of care. In that spirit, the fact is that there is a vast industry white space standing before us that is yet to be charted. As we progress through 2022, we will continue leveraging our team's domain expertise and our capabilities as a leading health technology company, enabling engagement between life science organizations, health care providers, and patients during critical junctures throughout the patient journey. What this translates to is doing a great job on behalf of our clients, digitally bridging the gap between life science organizations, patients, and providers, all while staying in strict compliance of all regulatory requirements. Like many other industries, healthcare is undergoing a digital evolution, striving to adapt to the constant pressure of digitization and the prevailing use of mobile and digital devices and other technologies. We are facilitating the digital evolution for life science organizations, taking the technologies that our clients require to move forward in this arena so that they won't have to go it alone. Industry evolution is one of the reasons we view our platform's adoption as still very early on the S-curve, despite the strong growth we've been able to demonstrate since our refounding in 2016. Our product demand and brand penetration is also rising among our customers as they see the value of the platform's ability to meet their digital engagement needs. The fact that our enterprise engagements provide a precise measurable return on investment against their marketing spend is key. This performance measurement will continue to be a key theme for the remainder of 2022. Before we talk about this further, I just want to mention again that we have spent the last several years configuring our platform for scalability. including establishing a technology center of excellence in Croatia. As scalability can be a major impediment for growth, we made the decision to take care of this early on. So we are now able to focus our attention solely on efficient and rapid market expansion and the growing digitization of the healthcare industry at large. In 2021, we brought together a terrific group of data scientists to help with the build out of our innovative digital solutions. That set of solutions now includes a full suite focused specifically on the deployment of AI, artificial intelligence, and data analytics live at the point of care to provide physicians with real-time information and support while they're making critical treatment decisions with their patients. Providing key information in real time at the point of care can help get a patient initiated on therapy a lot sooner. This capability is unbelievably valuable to life science companies, particularly those specialty brands where early intervention can be the deciding factor in whether a patient will have a positive therapeutic outcome. Financially, as noted in our press release, we had yet another record year. Revenues grew 42% year over year to $61.3 billion. Our business is really fitting example of the whole being a greater than the sum of its parts. Our solutions span the entire patient journey, beginning at the initial point of care to drive better engagement and revenue growth. We do this through a single platform approach, delivering everything from physician and pharma sales engagement to personalized patient support in order to improve therapeutic outcomes. Like with many industries right now, the data tools we are deploying have only started to come into the fold of mainstream customer and digital engagement in the last several years. In terms of our new set of KPIs and outlook, and given our position in the market, we're really excited to take this meaningful step. We're looking forward to another strong year of growth while helping patients start and stay on life-improving therapies. Finally, before we go to our financial review with Ed, I want to remind everyone on the call that even with our focus on growth and being in the early innings from a market penetration standpoint, we generated positive cash flow from operations in 2021. And lastly, while not an official KPI, our clients remain extremely pleased as we are delivering an average ROI of 13 to 1. And as in other reporting quarters, some clients are experiencing much higher ROIs. With that, I'd like to turn the call over to our CFO and COO, Ed Stalmach, who will walk us through the financial details for Q4. Ed?

Thanks, Will, and good afternoon, everyone. As with all our calls, a press release was issued with results for our fourth quarter ended December 31st, 2021. A copy is available for viewing and may be downloaded from the investor relations section of our website. And additional information can be obtained through our forthcoming 10-K, which will be filed in the coming days. Turning to our financial results for the fourth quarter ended December 31st, 2021. Our reported revenue for the period was $20.3 million, an increase of 24% over the $16.4 million from the same period in 2020. The increased revenue resulted from growth in sales across our access, adherence, and affordability solutions. Growth margin for the quarter increased from 52% in the year-ago period to 61% in the current reporting period. The gross margin increase is the result of solution and channel partner mix. As we highlighted in our earnings release, we expect our gross margin to remain relatively constant in the 57% to 60% range for the full year 2022. Operating expenses increased to approximately $11.8 million in the fourth quarter of fiscal year 2021. as compared to approximately $7.2 million in the same year-ago period. The increase in operating expenses was primarily related to salaries, wages, and benefits, and other human-related costs as we invested in the expansion of our team to support future growth by expanding our commercial activities and enhancing and growing our solution offerings. We delivered net income of $623,000 in the fourth quarter of fiscal 21, as compared to a net income of approximately $1.4 million during the same period in 2020. For further details, you can refer to our MD&A section of our upcoming 10-K. On a non-GAAP basis, net income for the fourth quarter of 2021 was approximately $4 million, or 23 cents and 22 cents for basic and fully diluted share. respectively. As compared to non-GAAP net income of approximately $2.7 million for 18 cents and 16 cents on the basic and fully diluted basis in the same year ago period. Now, turning to our balance sheet. Cash and cash equivalents totaled $84.7 million as of December 31st, 2021. as compared to $85.1 million as of September 30th, 2021. In terms of our revenue outlook for the full year 2022, the company expects net revenues of $80 to $85 million, representing year-over-year growth of 31% to 39%, respectively. This wraps up the discussion of our financial results for 2021. Before I turn the call back to Will, I also wanted to briefly talk about the KPIs that we introduced on February 15th, 2022. We have had a lot of positive feedback from many of our investors regarding increased transparency, as well as quantifiable metrics that can be used to continue to communicate our story as our business grows and matures. Our average revenue per top 20 pharmaceutical manufacturers through a year on year by nearly 30% to $2.5 million in 2021, as we supported additional brands and our expanded solution set continues to gain ground with now 19 of the top 20 largest pharma companies in the world, which represent the bulk of the industry's commercial spend. In addition, our ability to create tangible value for our clients, as well as growing demand for our solution sets, is reflected in the high net revenue retention rate of 127% in 2021. And last, but certainly not least, our operating model continues to demonstrate significant capability for leverageable growth with revenues per FTE at $730,000 in 2021 and almost 20% year-over-year improvement. Our plan is to continue to report these KPIs on a regular basis throughout the year to ensure open and transparent communication with our shareholders. And with that, I'd like to turn the call back over to Will. Will?