OptimizeRx Corporation

Good afternoon, everyone, and thank you for joining OptimizeRx's fourth quarter and fiscal 2025 earnings conference call. With us today is Chief Executive Officer Steve Silvestro. He is joined by Chief Financial and Strategic Officer Ed Stelmach, Chief Legal and Administrative Officer Marion Odins-Ford, and Chief Business Officer 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 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, you may begin.

Thank you, Operator, and good afternoon to everyone joining us for today's fourth quarter and fiscal year 2025 earnings call. We delivered a strong fourth quarter, exceeding both consensus estimates and our internal expectations. Revenue for the fourth quarter was $32.2 million, and adjusted EBITDA was $12 million. For the full year, revenue totaled $109.4 million, with adjusted EBITDA of $24.3 million. Our full year 2025 results clearly demonstrate the strength of our operating model and the significant opportunity within our market. We delivered solid top-line performance across both our largest and most established clients and a growing cohort of newer customers, particularly in the mid-tier and long-tail life science companies. We view this segment as highly attractive, providing a meaningful runway to expand our customer base and deepen our relationships over time. At the same time, improvements in our product mix and channel partner strategy contributed to higher gross margins in 2025. When combined with cost optimization initiatives following the Medix acquisition and the benefits of our largely fixed-cost, highly scalable operating model, we more than doubled both adjusted EBITDA and free cash flow year over year. While we're pleased with our fourth quarter results, we are seeing softness in our year-to-date contracted revenue numbers as compared to last year. This is mostly driven by a previously communicated market shift away from managed services, which contributed a material portion of our contracted revenue in the first half of 2025. In addition, we believe some of our clients are adopting a more conservative spending tone in the early stages of 2026 as they adjust their portfolios to most favored nation pricing. We feel confident that the latter is a temporary phenomenon that will start to normalize in the course of the coming few months. Given this backdrop, we are updating our 2026 guidance and are taking a more conservative view on revenue while continuing to stay focused on profitability. For 2026, we expect revenue in the range of $109 million to $114 million and adjusted EBITDA between $21 and $25 million. I also want to be clear. Management and our board believe there is still significant opportunity for value creation, particularly when examining the demand and operating leverage we saw in 2025. Indeed, fiscal 2025 demonstrated the strength of our profitable growth model. We achieved rule of 40 performance, delivered adjusted EBITDA margins above 20% for the year, and generated nearly $19 million in free cash flow from operations. Reflecting our confidence in the long-term value of the business, our board has authorized a $10 million share repurchase program. We intend to finance the repurchase using our available cash and cash equivalents in open market or privately negotiated transactions. I'd also like to address some of the speculation and questions we receive regarding artificial intelligence. Our business has experienced minimal disruption from AI, and we do not expect to be disrupted in the future. We are not a commoditized software solution or a strategic partner to life science companies supported by a proprietary and highly valuable communications network that connects pharmaceutical manufacturers with healthcare professionals and patients at critical moments of care. In fact, AI may serve as a tailwind, We are hearing from customers that historically up to 50% of marketing budgets were allocated to content creation. As AI drives efficiencies within our client base, that allocation of spend is likely to be redeployed to both expand reach and improve execution of marketing efforts, areas where Optimizer X is particularly well positioned. We believe we are strongly positioned for long-term outperformance on both the top and bottom lines. We address key pain points for our customers, including enhancing brand visibility, reducing script abandonment, improving interoperability between disparate point-of-care platforms, and supporting the transition to more complex and specialty medications. A strong example of our impact comes from one of our largest customers, a top 10 pharmaceutical manufacturer that engaged OptimizerX to support specific oncology initiatives through our point-of-care and point-of-prescribed-based marketing solutions. While early programs were focused on targeted use cases, The results demonstrated measurable impact in reaching prescribers within a clinical workflow and influencing engagement at key decision points. As performance validated the DAP model, the manufacturer expanded their investment with Optimizer X in 2025 to support multiple oncology brands across various indications. This expansion across brands and tumor types drove meaningful year-over-year revenue growth, evolving from initial pilot programs into a scaled, multi-brand oncology engagement strategy. When we talk about enterprise engagements, this is the momentum we're looking for. We're also seeing strong momentum in the medtech sector. One flagship client first partnered with us post-COVID to expand prescriber reach to our legacy point-of-care marketing solutions. Consistent script lift in 2024 prompted the client to adopt DAP, our AI-enabled dynamic audience activation platform. which facilitated precise, timely outreach to prescribers, including many previously untapped new prescribers, exactly when it mattered most in the patient journey. This continues to be a major differentiator for the company and for our clients. By activating and leveraging these high-value HCP audiences identified through DAP, the client rapidly scaled deployment to additional brands and channels. This multi-brand, multi-channel scaling is delivering substantial impact in a highly competitive and rapidly growing landscape. The success of this program resulted in the customer drastically increasing its investment in OptimizeRx solutions from pilot dollars in 2022 to several million dollars in 2025. This pattern, starting with targeted POC engagement, progressing to DAP adoption, and then accelerating across the portfolio, highlights the repeatable path to accelerated growth and stronger ROI that we see across dozens of similar pharma and medtech companies. OptimizeRx is uniquely positioned to drive sustainable long-term growth in shareholder value. The key word here is sustainable. With one of the nation's largest point-of-care networks and the only true point-of-prescribe network, We enable pharmaceutical manufacturers to engage healthcare providers directly at the moments that matter most, when actual decisions are being considered and made. Building on this foundation, we've developed a purpose-built omni-channel platform that integrates advanced patient-finding capabilities such as DAP and micro-neighborhood targeting. These tools are redefining how pharmaceutical companies, physicians, and patients connect, improving patient outcomes and transforming engagement across the healthcare ecosystem. Our reach across both point-of-care and direct-to-consumer channels provides a durable competitive advantage. We believe OptimizeRx is the only company with the scale, technology, and data integration required to seamlessly engage providers and patients across all channels. This positions us as a comprehensive commercialization partner, supporting customers throughout the full product lifecycle, deepening relationships, and expanding long-term value capture. As we have discussed on prior calls, a key focus moving forward is to further demonstrate our reach, scalability, and value as a trusted strategic partner. Our ability to consistently expand relationships with our largest customers underscores the value we deliver and the impact we have on ScriptLift and the commercialization process. I'm confident that continued focus on execution, notwithstanding some of the near-term headwinds seen in our space, combined with our differentiated platform and strong customer outcomes, will translate into meaningful long-term shareholder value. We believe our momentum positions us to capture additional market share and expand our role within the pharma industry's multi-billion dollar digital ecosystem. Our customers remain deeply integrated across our HCP and DTC offerings, and our objective is to support them seamlessly across the full patient care journey. And with that, I'd like to turn the call over to our CFSO, Ed Stelmack, who will walk us through the financials. Ed?

Thanks, Steve, and good afternoon, everyone. A press release was issued with the financial results for our fourth quarter and fiscal year ended December 31st, 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 Form 10-K. Fourth quarter revenue came in at $32.2 million, and this was largely in line with our previously communicated expectations as we continue to convert more of our DAP agreements into subscription revenue that spread more evenly over the course of the year. In addition, buy-ups came in at a more moderate level than in 2024. Gross margin increased from 68.1% in the quarter ended December 31st, 2024 to 74.8% in the quarter ended December 31st, 2025. Year-over-year gross margin expansion is tied to a favorable solution and channel partner mix. While the fourth quarter was a record gross margin quarter, we don't anticipate gross margins to be at this level in 2026 and continue to believe will be in the mid 60% range as the fourth quarter saw an unusually high amount of specialty messaging in higher margin channels, which was a favorable but uncommon mix for us. Our operating expenses for the quarter ended December 31st, 2025, decreased by $2.9 million year over year. largely due to lower cash APEX, as we saw benefits from the post-acquisition cost reduction measures be implemented in 2024. Meanwhile, our net income came in at $5 million, or 26 cents on a fully diluted basis, for the fourth quarter of 2025, compared to a net loss of $0.1 million during the fourth quarter of 2024. On a non-GAAP basis, our net income for the fourth quarter of 2025 was $9.9 million, or 51 cents, per diluted share outstanding, as compared to a non-GAAP net income of $5.5 million, or 30 cents, per diluted share outstanding in the same year-ago period. Our adjusted EBITDA came in at $12 million for the fourth quarter of 2025, compared to 8.8 million during the fourth quarter of 2024. We ended the year with cash and short-term investments totaling 23.4 million as of December 31st, 2025, as compared to 13.4 million on December 31st, 2024. We were able to increase our cash balance throughout the year despite paying off $8 million in principal during 2025, including $6 million ahead of our prepayment schedule. Our operating cash flow was $18.7 million for 2025 versus $4.9 million in 2024. As a result, our current debt balance stands at $26.3 million. We continue to believe we're well-funded to execute against our strategic and operational goals, and will look to utilize free cash flow to pay down debt at an accelerated rate and opportunistically look to repurchase shares. Now, I'd like to turn to our KPIs for the 12 months ended December 31st, 2025. Average revenue per top 20 pharmaceutical manufacturer was $2.8 million, which declined slightly from $3 million in 2024 and was directly tied to lower buy-ups and data-related revenue that I highlighted earlier. Meanwhile, net revenue retention rate remained strong at 116% and revenue per FTE came in at $839,000, topping the $701,000 we posted during the 12 months ended December 31st, 2024. Finally, I'd like to provide additional color around our guidance, which now calls for 2026 revenue to come in between 109 and $114 million and adjusted EBITDA between 21 and $25 million. As you may recall, our first half 2025 revenue was positively impacted by managed service revenues, which contributed to approximately $9 million in the first half of 2025. Since we don't expect a similar revenue mix in 2026, our revenue phasing is likely to fall in line with historical 40-60% attribution between first and second half of the year. And with that, I'll turn the call back over to Steve. Steve?