OptimizeRx Corporation

Good afternoon, everyone, and thank you for joining OptimizeRx's second quarter fiscal 2025 earnings conference call. We have with us today Chief Executive Officer Steve Silvestro. He is joined by Chief Financial Officer Ed Stelmack, Chief Legal Officer Marion Odinsford, and Senior Vice President of Corporate Finance, Andrew De Silva. 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 finance 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 afternoon, 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 on the investor relations section of the company's website. Now, I would like to turn the call over to OptimizeRx CEO, Steve Silvestro. Mr. Silvestro, please go ahead.

Thank you, Operator, and good afternoon to everyone joining today's second quarter 2025 call. Overall, we had a strong second quarter of 2025 with results ahead of both consensus estimates and our internal expectations. Recent momentum has continued with Q2 revenues increasing 55% year over year to 29.2 million, with adjusted EBITDA coming in at 5.8 million, an improvement of over 5 million year over year. Moreover, our contracted revenue continues to increase to more than 30% year over year, which positions us favorably in the second half of 2025. I believe this is a clear indicator that our focus on operational excellence while ensuring we delight our customers and forge stronger relationships with valued business partners is bearing fruit. Before moving on, I want to take a moment and thank our market leading team. We deeply appreciate the dedication and hard work of everyone at OptimizeRx as we navigate an increasingly complex, dynamic, and still emerging digital pharma marketing place. The industry is undergoing a significant shift, and our products and services are poised to fundamentally reshape how pharmaceutical companies, patients, and prescribers engage. Our mission-driven culture not only fuels this transformation, but also positions us to attract, retain, and strengthen the critical relationships a leading technology company needs to be a trusted and enduring partner. With that said, I'm happy to say we are increasing our guidance for the year and are looking for revenue to come in between 104 million and 108 million, with adjusted EBITDA to be between 14.5 million and 17.5 million. Moreover, while it's still very early, initial indications for 2026 appear promising. As a result, we feel comfortable with consensus current revenue and adjusted EBITDA projections for 2026, and we will give formal guidance as we get deeper into the 2026 RFP process. In addition, we paid down $4.5 million of principal during the second quarter, which was $4 million above our debt payment schedule. At this time, given the free cash flow we're seeing in our business, we intend on paying down our debt at an accelerated rate and don't believe we'll need to access the equity capital markets for the foreseeable future. As you can see, we certainly believe that we're hitting our stride. Our disciplined cost management and sharp cross-selling strategies rooted in helping customers optimize budget allocation to drive script lift are fueling strong momentum heading into the second half of 2025 and beyond. Our strong second quarter and first half results clearly show that the Rule of 40 performance is no longer a distant goal. It's firmly within our sights. Perhaps most notably, average revenue over the last 12 months for our largest five customers now stands at over $11 million average. We believe OptimizerX is uniquely positioned to drive meaningful value creation and deliver sustainable long-term shareholder growth. Powered by one of the nation's largest point-of-care networks, we enable pharmaceutical manufacturers to reach healthcare providers directly when it matters most. Building on this powerful foundation, we've integrated a purpose-built omni-channel technology platform featuring advanced patient-finding tools like DAP, micro-neighborhood targeting, that are redefining how pharmaceutical companies, physicians, and patients connect, communicate, and act. This innovative approach is not only transforming engagement across the healthcare ecosystem, but also helping to improve patient outcomes. These advantages provide us with a durable and defensible competitive mode. With unmatched access to both the point of care and direct-to-consumer channels, we believe we are uniquely positioned in the market as the only player capable of engaging providers and patients at scale. This strategic positioning has enabled us to build the industry's most comprehensive and integrated solution set, allowing us to serve a broad range of customer needs across the full product lifecycle, drive deeper customer relationships, and capture greater share of long-term value. As mentioned on previous calls, as our business continues to evolve, a key focus for the company will be drawing greater attention to our reach and scalability while positioning ourselves as a strategic partner in addressing some of the most critical commercialization challenges facing pharma today, These include improving brand visibility, reducing script abandonment, enhancing interoperability, and supporting the growing shift toward more complex and costly specialty medications. I'm confident that success in these areas combined with the strong performance we are already delivering through the solutions that deliver high ROIs and strong script lift will drive significant shareholder value over time. Moreover, This momentum will position us to capture greater market share while also expanding the overall size of pharma's multibillion-dollar digital spend. Our customers remain deeply embedded within our ecosystem of offerings, and it remains our goal to help them stay present through the patient care journey across the integrated HCP and DTC business. And with that, I'd like to turn the call over to our CFO, Ed Stelmack, who will walk us through the financial details. Ed?

Thanks, Steve, and good afternoon, everyone. A press release was issued with the financial results of our second quarter ended June 30th, 2025. 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 10Q. Second quarter revenue was $29.2 million, an increase of 55% from the 18.8 million we recognized during the same period in 2024. Gross margin for the quarter increased from 62.2% in the quarter ended June 30th, 2024 to 63.8% in the quarter ended June 30th, 2025. Year-on-year gross margin expansion is tied to a favorable product mix, economies of scale, as well as a favorable channel partner mix. Our operating expenses for the quarter ended June 30, 2025, were essentially flat year over year at $15.4 million, despite the significant revenue growth we showed. We had a net income of $1.5 million, or $0.08, per basic and fully-delivered share for the three months ended June 30, 2025. As compared to a net loss of $4 million, or $0.22, per basic and fully diluted share for the same three-month period in 2024. On a non-GAAP basis, our net income for the second quarter of 2025 was $4.5 million, or $0.24 per fully diluted share outstanding, as compared to a non-GAAP net income of $0.3 million, or $0.02 per fully diluted share outstanding in the same year-ago period. Our adjusted EBITDA came in at 5.8 million for the second quarter of 2025, compared to 0.5 million during the second quarter of 2024. Operating cash flow was 8.4 million for the first half of 2025, and we ended the quarter with a $16.6 million cash balance as compared to $13.4 million on December 31st, 2024. The remaining principal on our debt financing currently stands at $29.3 million. And we paid $4.5 million in principal during the quarter, which was $4 million ahead of our payment schedule. At this time, we intend to deploy at least a portion of our free cash flow to pay down the principal on our loan faster as we look to continuously lower our cost of capital. With that said, we continue to believe that our healthy balance sheet will help us execute against our operational goals. Now let's turn to our KPIs for the second quarter of 2025. Average revenue per top 20 pharmaceutical manufacturer now stands at $3.1 million. Net revenue retention rate remained strong at 121%. Meanwhile, revenue per FTE came in at 767,000, topping the 658,000 we posted in Q2 2024. We are encouraged by the continuing improvement in our KPIs as we continue to execute against our strategy of driving profitable growth as a leader in our space. Now with that, I'll turn the call back over to Steve.