OptimizeRx Corporation

Good morning, everyone, and thank you for joining OptimizeRx's fourth quarter and full year fiscal 2024 earnings conference call. With us today is Chief Executive Officer Steve Silvestro. He is joined by Chief Financial Officer Ed Selnick, Chief Legal Officer Marion Odins-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. The company will also be discussing certain non-GAAP financial measures, which it believes are useful in evaluating the company's operating results. A reconciliation of such non-GAAP financial measures is included in the earnings release the company issued this morning, as well as in the investor relations section of the company's website. I would like to remind everyone that today's call is being recorded and will be made available for replay as an audio recording of this conference call and will also be provided on the investor relations section of the company's website. Now I would like to turn the call over to OptimizeRx CEO Steve Silvestro. Sir, please go ahead.

Thank you, Operator, and good morning, everyone. Thank you for joining today's fourth quarter and fiscal 2024 earnings call. As many of you know, this is my third day as OptimizerX's new CEO. I'm honored to have the opportunity to lead the next phase of OptimizerX's growth and transformation. Now more than ever, we will be laser focused on operational excellence while ensuring we delight our customers and forge stronger relationships with valued business partners. Over the past few months, we've completed an extensive strategic review of the company's business process, operations, and growth plans, and we believe we're on the right path forward. We're working towards continuing the company's growth, focusing very closely on customer centricity and delight, continuing to expand our unique value proposition with pharma, converting customers to our reoccurring revenue model, while driving to become a rule of 40 company and unlocking new opportunities for profitable revenue growth. Importantly, I'm looking forward to meeting more of our investors throughout the year and hearing our investors' thoughts and perspectives on our shared objective, shareholder value creation. While we believe we're executing the right strategies, we're always open to hearing our investors' thoughts on alternative strategies that further our shared goals. As for our 2024 financials, I'm happy to say that we beat our guidance and street expectations with revenue and adjusted EBITDA coming in at $92.1 million and $11.7 million, respectively. I believe OptimizerX is uniquely positioned to drive value creation and build long-term sustainable shareholder growth by leveraging one of the largest EHR and e-prescription networks, in the country to help pharma manufacturers reach healthcare providers at the point of care. Building on that, we are combining that unparalleled network with a unique purpose-built omnichannel technology platform that is transforming how pharmaceutical companies, physicians, and patients engage, ultimately improving care outcomes for patients. These elements give us a distinct competitive edge. With an unrivaled point of care reach, we believe we are the only company in the industry that can effectively connect both doctors and patients at scale. This has allowed us to develop the broadest suite of solutions in the industry, enabling us to meet the diverse needs of our customers across the full spectrum of their product lifecycle. Coupled with our highly experienced team and a longstanding track record of delivering for top tier pharma clients, we firmly believe we are a leadership position in the industry that will take others years to match. As our business continues to evolve, our offerings are scaling as we continue to tackle some of pharma's toughest commercial challenges, including Brand visibility, as many clinicians and providers have reduced in-person meetings and are spending more time in front of computers. Script abandonment, as approximately 50% of patients never fill their scripts at the pharmacy. Interoperability, as providers' inability to access relevant patient information in one place to make more informed decisions at the point of care. And finally, the shift to more complex and expensive specialty medications, where more complex diagnosis criteria is required to identify brand-eligible patients as expensive specialty medications now account for roughly half of total drug expenditures in the US. On average, we're driving strong brand engagement with measurable success. When launching a six month program with a brand, we consistently achieve an ROI well over 10 to one on HCP marketing spend. Additionally, we see a 25% average script lift in our six month programs. These capabilities enable us to capture greater share of wallet from established customers. In 2024, our top five customers averaged over $9 million in revenue, and we're on track to elevate at least one more customer to this level in 2025. A great example of our impact comes from one of our largest customers, a top five pharma manufacturer. After a successful 2023 supporting multiple brands, including a launch brand, 2024 began with strong bookings across the portfolio. Independent program analysis for this manufacturer demonstrated a material impact on prescription Lyft, leading supported brands to increase their share of voice across the OptimizerX network. To drive further results, some brand teams focused on boosting incremental new prescriptions in addition to refills before year-end. To support this objective, we identified key areas where additional investment could expand program scale, physician reach, improving patient conversion for each program. As I move forward in my new role as OptimizerX CEO, I'm working with our executive team to implement a robust multi-year plan to grow the business and increase shareholder value. While many aspects of the business will be the same, everything will be going through the lens of getting us to a rule of 40 company over the next several years. And moving towards this financial goal, we expect to drive substantial operating leverage and build a more predictable business, including by establishing a consistent reoccurring revenue component to our business as we aim to convert our DAP customers to a subscription-based model from the data component of our offerings. We believe this will improve margins and visibility over time, while substantially enhancing the overall predictability of our revenue streams. In turn, this will also enhance our ability to scale the business and plan for substantial growth that we and our investors are seeking. With a $10 billion TAM in a large underpenetrated market and tailwinds driven by increased pharma advertising spend on digital channels, OptimizerX today is well positioned to execute on our revamped strategic plan, Our customers remain deeply embedded within our ecosystem of offerings, and it remains our goal to help them stay present throughout the patient care journey across our integrated HCP and DTC business. We have strong momentum coming into 2025. And with that, I'd like to turn the time over to our CFO, Ed Stelmack, who will be walking us through our financial results. Ed?

Thanks, Steve, and good afternoon, everyone. The press release was issued with the financial results of our fourth quarter and fiscal year and December 31st, 2024. The copy is available for viewing and may be downloaded from the Investor Relations section of our website. Additional information can be obtained through our forthcoming 10K. Fourth quarter revenue came in at $32.3 million, an increase of 14% from the $28.4 million we recognized during the same period in 2023, which was the result of the company benefiting from the increased DAPT-related revenue streams in the fourth quarter. Gross margin increased from 62.9% in the quarter ended December 31, 2023 to 68.2% in the quarter ended December 31, 2024. Year-over-year gross margin expansion is tied to a favorable solution and channel partner mix. Our operating expenses for the quarter ended December 31, 2024 decreased by $10.4 million year-over-year, largely due to lower M&A-related costs. as we completed the MedicsHealth acquisition during the fourth quarter of 2023. In addition, we saw significant benefits from cost-cutting initiatives approaching $5 million annually tied to the integration efforts with acquisition. Meanwhile, our net loss came in at $0.1 million for the fourth quarter of 2024 compared to a net loss of $4.1 million during the fourth quarter of 2023. On a non-GAAP basis, our net income for the fourth quarter of 2024 was 5.5 million, or 30 cents, for the shares outstanding, as compared to a non-GAAP net income of 4.6 million, or 26 cents, for the shares outstanding in the same year-ago period. Our adjusted EBITDA came in at 8.8 million for the fourth quarter of 2024, compared to 5.8 million during the fourth quarter of 2023. We ended the year with cash and short-term investments totaling $13.4 million as of December 31, 2024, as compared to $13.9 million on December 31, 2023. The majority of the year-over-year decline was due to the paydown of principal of our debt, where we made an incremental $2 million payment during the fourth quarter of 2024. Our current debt balance stands at $34.3 million after paying off $2.5 million of principal during the fourth quarter. We continue to believe we're well-funded to execute against our strategic and operational goals. Now I'd like to turn to our KPIs for the 12 months ended December 31st, 2024, which showed broad-based improvement as our business continues to evolve. Average revenue for top 20 pharmaceutical manufacturer was $2.9 million, which is an increase of 22% from the same period one year ago. This is driven by our continuing success in expanding our share of wallet with top manufacturers and especially our top five accounts, which hit an all-time high with an average of $9.1 million in 2024. Net revenue retention rate showed improvement at 121%, up from 105% in the trailing 12-month prior period. Revenue per FTE came in at $701,000, topping the $586,000 we posted during the 12 months ended December 31, 2023. With that, I'll turn the call back over to Steve. Steve?