OptimizeRx Corporation

Good morning, everyone, and thank you for joining OptimizeRx's fourth quarter fiscal 2023 conference call. With us today is the Chief Executive Officer of OptimizeRx, William Fedlow. He is joined by Chief Financial Officer, Ed Stelmach, President Steve Silvestro, General Counsel, Marion Odense-Ford, and Senior Vice President of Corporate Finance, Andrew DeSilva. At the conclusion of today's 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 via webcast. And a transcript and a link to the audio recording of this conference call will be provided on the investor section of the company's website. Now I would like to turn the call over to OptimizeRx CEO, William Febo. Sir, please go ahead.

Good morning, and thank you for joining our conference call to discuss fourth quarter 2023 preliminary on audited financials. As already communicated, our audit is taking longer than previous years due to the October 2023 acquisition of Healthy Offers, Inc., which does business under the name of Medix Health, the November 2023 solutions portfolio streamlining around core business lines, and the validation and testing of certain third-party vendors' internal processes that are part of our previously disclosed material weakness remediation plan. The audit is in the final stages, and we are confident that we will be in a position to file our 10-K and audited financials no later than April 15. I'm pleased to note that Q4 represented a strong end to 2023 and has favorably positioned us to start 2024. The quarter's financial results came in better than our initial expectations and topped analyst estimates, with Q4 revenue growing 44% year-over-year to $28.4 million. The improvement was driven by strong organic growth in messaging, led by our Dynamic Audience Activation Platform, or DAP for short, as well as from approximately two months of contribution from our acquisition of MedicsHealth. Notably, our legacy core HCP business grew over 30% when compared to the fourth quarter of 2022. We are excited about the many business highlights from the fourth quarter. We continue to validate our thesis on DAP as we increase the number of deals in 2023 to 24 deals, providing us with a significant revenue launchpad this year. Progress coming in ahead of what we had anticipated is very favorable as, by their nature, these DAP deals are larger, stickier, and more strategically targeted, making us more relevant partner with our client base. We also acquired MedicsHealth, resulting in the combination of a leading direct-to-consumer audience activation and messaging execution business with our HCP-focused omni-channel digital point-of-care marketing business. This acquisition unlocks a significant adjacent market with an extremely large white space and cross-sell opportunity. The integration of MedicsHealth is tracking ahead of schedule, and the majority of integration activities have been completed. Furthermore, we have optimized our operation by trimming our legacy OptimizeRx costs by over 10% and simultaneously realigning our focus on core business lines and moving away from non-core businesses. As noted in our March 11, 2024 press release, we are reiterating our guidance for 2024, but revising our original 2024 revenue target. This revision is due to a change in the revenue accounting treatment for certain revenue streams for messaging executed through Medix Health channel partners that were historically recognized on a gross basis, but now will be recognized on a net basis. As a consequence of this gross to net accounting treatment, we adjusted our revenue target and anticipate revenue to reach at least $100 million for 2024. Importantly, this adjustment maintains our bottom line and, in fact, enhances our margin profile. Therefore, our adjusted EBITDA guidance remains unchanged, standing at at least $11 million for 2024. We believe the macroeconomic and competitive challenges we identified in 2022 and 2023 are returning to normal. In particular, we're witnessing encouraging momentum as our clients that had initiated pilot programs with newly established entrants in our field over the past two years are concluding the assessments of these programs and, as anticipated, are finding that these perceived competitive solutions lack scalability and the ability to adequately report information back to customers, ultimately driving spending back towards our offerings. Before proceeding, I'd like to express my sincere gratitude to the OptimizeRx team for their unwavering dedication and relentless pursuit of our mission. Over the past few years, our collective efforts have led to the development of one of the most scalable solutions in the industry, tailored specifically for pharmaceutical marketers. We've recently expanded this initiative to include a highly impactful BTC component. This journey hasn't been without its challenges. Navigating through the dynamic landscape of the industry shifts and embracing early digital advancements has been no small task. Yet, OptimizerX's achievements stand as a testament to our resilience and foresight. fundamentally reshaping the dynamics of engagement between pharma, patients, and prescribers. As previously mentioned, in September of last year, we introduced a significant enhancement to our omnichannel healthcare engagement platform, known as DAP. This pioneering AI-driven capability seamlessly integrates point-of-care and traditional digital media, offering a holistic solution for pharmaceutical marketing. The unveiling marked the culmination of years dedicated to the understanding of how AI can augment Optimizer X's customer use cases, resulting in a transformative journey for our HCP engagement platform. Building upon our existing technology, we have extended the AI-driven platform reach to encompass social media, web display channels, and CRM alerts, which fosters greater efficiency to collaboration with our customer sales forces. Since then, we've expanded these capabilities to now also encompass the DTC channels utilized by MedEx Health that include streaming and connected TV, as well as various digital channels such as display, audio, online video, and mobile, among others. We're encouraged by this timely enhancement as we've already witnessed early initial cross-selling success with DAP in the short time since we've consummated the acquisitions. We will update everyone regarding our DAP cross-selling efforts in our Q1 earnings call in early May. DAP advances our land and expand strategy, enabling clients to gain maximum market penetration through the scaling of outreach in real time across the company's network of over 2 million HCPs and 240 million U.S. adults across multiple major digital media channels and at point of care via EHRs, e-prescribing, and telehealth platforms. With this, OptimizerX has evolved into one of the most comprehensive digital healthcare marketing platforms in the nation. This evolution firmly aligns with current pharma trends as the industry is moving the greater portion of their commercial spend towards omnichannel digital solutions. While looking for these solutions to deliver more impactful results by not only identifying patients known to HCPs, but also pinpointing new patients for their therapies, We continue to believe smarter solutions such as our DAP offering will capture the lion's share of the farmer's spend, particularly with legacy commercial dollars that are reallocated to digital. We believe early proof of this trend is clearly highlighted by the 4x year-over-year increase in DAP deals seen in 2023. DAP represents a transformative leap for us, transitioning us from being a mere tactical player within the pharmaceutical industry to a formidable strategic partner. This shift affords us the invaluable advantage of garnering top-down support from decision-makers, while also securing revenue streams with greater durability, enhanced margin, and amplified growth prospects. These pivotal developments are reinforcing my level of excitement regarding our strategic positioning. I anticipate that the collective impact of our initiatives outlined today could yield substantial dividends over the next three to five years, catapulting our revenue to multiples of its current standing. As we diligently pursue our land and expand strategy, we continue to reap the rewards of delivering superior return on investments maintaining our impressive ROIs of over 10 to 1 for HCP messaging. This achievement holds particular significance with the pharmaceutical landscape, where achieving ROIs of two to three times spent has traditionally been the benchmark. We believe we turned a significant corner in recent months and have incredible momentum going into 2024. And with that, I'd like to turn the call over to our CFO, Ed Stalmach, who will walk us through our financial details.

Thanks, Will, and good morning, everyone. As noted previously, a transcript and a link to an audio recording of this conference call will be provided on the investor section of the company's website. Fourth quarter revenue came in at $28.4 million, an increase of 44% from the $19.7 million we recognized during the same period in 2022. This included revenues from our legacy core and non-core business lines, as well as from approximately two months of MedicsHealth-related revenue streams. Going forward, we will be reporting both OptimizerX and MedicsHealth as one consolidated business. Meanwhile, our previous non-core business lines that we have called access and patient engagement will no longer be revenue streams for the company, and we have eliminated associated costs to these business lines. On a pro forma basis, when stripping out these non-core business lines from our 2023 results and accounting for the full year benefit of MedicsHealth financial results in our 2023 actuals, our revenue for calendar year 2023 would have been approximately $91.8 million, which we are utilizing as our comparison point to chart progress going forward. Meanwhile, our net loss came in at $7.2 million for the fourth quarter of 2023, compared to a loss of 0.3 million during the fourth quarter of 2022. Our adjusted EBITDA came in at 5.8 million for the fourth quarter of 2023, compared to 3.9 million during the fourth quarter of 2022. The gap to non-gap reconciliation table has been included in the investor relations section of our website at investors.optimizerx.com in the events and presentations folder. We ended the year with cash and short-term investments totaling $13.9 million as of December 31st, 2023, as compared to $74.1 million on December 31st, 2022. The majority of the year-over-year decline was due to our acquisition of MedixHealth and share repurchase program, through which we bought back 526,999 shares of common stock for $7.5 million during 2023. Our current debt balance currently stands at $38.3 million. Recall, to help fund the $83.9 million cash portion of the MediScout transaction, the company took on $40 million in debt financing, and we paid off $1.7 million of principal during the fourth quarter. We continue to believe we're well-funded to execute against our operational goals, and with that, I would like to turn the call back over to Will. Will?