OptimizeRx Reports Second Quarter 2024 Financial Results

–   Q2 revenue of $18.8 million, increasing 36% year-over-year
–   Q2 gross profit increased 50% year-over-year to $11.7 million with a gross margin of 62%
–   Won 8 DAAP deals during Q2

WALTHAM, Mass., Aug. 08, 2024 (GLOBE NEWSWIRE) -- OptimizeRx Corp. (the “Company”) (Nasdaq: OPRX), the leading provider of healthcare technology solutions helping life sciences companies reach and engage healthcare professionals (HCPs) and patients, reported results for the three months ended June 30, 2024. Quarterly comparisons are to the same year-ago period.

Financial Highlights

  • Revenue in the second quarter of 2024 increased 36% to $18.8 million, as compared to $13.8 million in the same year ago period.
  • Gross profit in the second quarter of 2024 increased 50% year-over-year to $11.7 million, from $7.8 million during the second quarter of 2023.
  • GAAP net loss totaled $(4.0) million or $(0.22) per basic and diluted share in the second quarter, as compared to $(4.1) million or $(0.24) during the second quarter of 2023.
  • Non-GAAP net income in the second quarter totaled $0.3 million, or $0.02 per diluted share, as compared to non-GAAP net loss of $(0.2) million or $(0.01) per diluted share during the second quarter of 2023 (see definition of these non-GAAP measures and reconciliation to GAAP below).
  • Adjusted EBITDA for the second quarter of 2024 came in at $0.5 million compared to $(0.8) million in the same year ago period (see definition of this non-GAAP measure and reconciliation to GAAP below).
  • Cash, cash equivalents and short-term investments totaled $15.0 million as of June 30, 2024 as compared to $13.9 million as of December 31, 2023.

Will Febbo, OptimizeRx CEO commented, “In the second quarter, revenue came in short of our expectations and consensus midpoint while adjusted EBITDA came in above consensus. This was primarily a result of a timing issue with closing one of our largest DAAP deals. We are having success in converting our DAAP pipeline into closed deals; however, because DAAP is a new, innovative solution in the market, there are additional approvals at the pharma customer level required to close out all the items that would allow us to take the revenue in the quarter. To be more specific, one of our long-standing customers committed to moving forward with an approximately $6 million multi-brand DAAP program that was due to launch in the second quarter of 2024 and got slightly delayed in their internal approval process. Without this delay, I believe we would have exceeded consensus expectations both on the top and bottom lines."

"In the meantime, we've observed a significant distinction among our top 3 pharma clients, with an average revenue per client at approximately $9.7 million, compared to an average revenue of $2.7 million for our top 20 pharma clients. This highlights the value our top clients see in our DAAP solutions, as they continue to allocate larger portions of their commercial budgets to OptimizeRx. The strong performance with our top 3 customers signals robust market adoption of our evolving solutions, which we are leveraging across other accounts."

  
Key Performance Indicators (KPIs)*Rolling Twelve Months Ended 6/30/2024 Rolling Twelve Months Ended 6/30/2023
 (in thousands, except percentages)
Average revenue per top 20 pharmaceutical manufacturer$2,699  $1,804 
Percent of top 20 pharmaceutical manufacturers that are customers 100%  100%
Top 20 pharmaceutical manufacturers as percent of total net revenues 65%  59%
Net revenue retention 124%  89%
Revenue per averages full-time employee (FTE)$658  $565 
        

2024 Financial Outlook

For the full year 2024, the Company is reiterating its 2024 guidance and expects revenue to be at least $100 million with an Adjusted EBITDA of at least $11 million.

Conference Call

Date:        Thursday, August 8, 2024
Time:        4:30 p.m. Eastern Time (1:30 p.m. Pacific Time)
Toll Free:        1-800-343-4849
International:        1-203-518-9848
Conference ID:        "OPRXQ2"
Webcast:        https://viavid.webcasts.com/starthere.jsp?ei=1679004&tp_key=4b22d66114

Definition and Use of Non-GAAP Financial Measures

This earnings release includes a presentation of non-GAAP net loss and non-GAAP net loss per diluted share or non-GAAP EPS, and Adjusted EBITDA, all of which are non-GAAP financial measures.

The Company defines non-GAAP net loss as GAAP net loss with an adjustment, as applicable, to add back depreciation, amortization, amortization of debt issuance costs, stock-based compensation, acquisition expenses, severance expenses, income or loss related to the fair value of contingent consideration, gain or loss from the disposal of a business, asset impairment charges, other income (loss), and deferred income taxes. Non-GAAP EPS is defined as non-GAAP net loss divided by the number of weighted average shares outstanding on a diluted basis. Adjusted EBITDA is defined as GAAP net loss with an adjustment, as applicable, to add back depreciation, amortization, interest, stock-based compensation, acquisition expenses, severance expenses, income or loss related to the fair value of contingent consideration, gain or loss from the disposal of a business, asset impairment charges, other income (loss), and deferred income taxes. The Company has provided non-GAAP financial measures to aid investors in better understanding its performance. Management believes that these non-GAAP financial measures provide additional insight into the operations and cash flow of the Company.

Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a Company’s non-cash operating expenses, management believes that providing non-GAAP financial measures that exclude non-cash expenses allows for meaningful comparisons between the Company’s business operating results and those of other companies, as well as provides an important tool for financial and operational decision making and for evaluating the Company’s business operating results over different periods of time.

The Company’s non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate such non-GAAP financial results differently. The Company’s non-GAAP net loss, non-GAAP EPS and Adjusted EBITDA are not measurements of financial performance under GAAP and should not be considered as an alternative to operating income or as an indication of operating performance or any other measure of performance derived in accordance with GAAP. The Company does not consider these non-GAAP measures to be substitutes for or superior to the information provided by its GAAP financial results.

The table, “Reconciliation of Non-GAAP to GAAP Financial Measures,” included below, provides a reconciliation of Non-GAAP net (loss), Non-GAAP EPS and Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023. Although the Company provides guidance for Adjusted EBITDA, it is not able to provide guidance to the most directly comparable GAAP measures. Reconciliations for forward-looking figures would require unreasonable efforts at this time because of the uncertainty and variability of the nature and amount of certain components of various necessary GAAP components, including, for example, those related to compensation, acquisition expenses, amortization or others that may arise during the year, and the Company’s management believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. For the same reasons, the Company is unable to address the probable significance of the unavailable information.

Definition of Key Performance Indicators*
Top 20 pharmaceutical manufacturers: We have updated the definition of “top 20 pharmaceutical manufacturers” in our key performance indicators to be based upon Fierce Pharma’s most updated list of “The top 20 pharma companies by 2023 revenue”. We previously used “The top 20 pharma companies by 2022 revenue”. As a result of this change, prior periods have been restated for comparative purposes.

Net revenue retention: Net revenue retention is a comparison of revenue generated from all clients in the previous period to total revenue generated from the same clients in the following year (i.e., excludes new client relationships for the most recent year).

Revenue per average Full Time Employee: We define revenue per average full-time employee (FTE) as total revenue over the last 12 months (LTM) divided by the average number of employees over the LTM, which is calculated by taking our total number of FTEs at the end of the prior year period by our total FTE headcount at the end of the most recent.

About OptimizeRx
OptimizeRx provides best-in-class health technology that enables care-focused engagement between life sciences organizations, healthcare providers, and patients at critical junctures throughout the patient care journey. Connecting over 2 million U.S. healthcare providers and millions of their patients through an intelligent technology platform embedded within a proprietary digital point-of-care network, as well as mass digital communication channels, OptimizeRx helps life sciences organizations engage and support their customers.

For more information, follow the Company on TwitterLinkedIn or visit www.optimizerx.com

Important Cautions Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “anticipates”, “believes”, “estimates”, “expects”, “forecasts”, “intends”, “plans”, “projects”, “targets”, “designed”, “could”, “may”, “should”, “will” or other similar words and expressions are intended to identify these forward-looking statements. All statements that reflect the Company’s expectations, assumptions, projections, beliefs or opinions about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements relating to the Company’s growth, business plans, future performance. These forward-looking statements are based on the Company’s current expectations and assumptions regarding the Company’s business, the economy, and other future conditions. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise, except as required by applicable law. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted, or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, the effect of government regulation, seasonal trends, our ability to maintain our contracts with electronic prescription platforms, competition, and other risks summarized in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, its subsequent Quarterly Reports on Form 10-Q, and its other filings with the Securities and Exchange Commission.

OptimizeRx Contact
Andy D’Silva, SVP Corporate Finance
adsilva@optimizerx.com

Investor Relations Contact
Ashley Robinson
LifeSci Advisors, LLC
arr@lifesciadvisors.com


 
OPTIMIZERX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share data)
(UNAUDITED)
 
 June 30,
2024
 December 31,
2023
    
ASSETS   
Current assets   
Cash and cash equivalents$14,959  $13,852 
Accounts receivable, net 24,521   36,253 
Taxes receivable 1,842   1,036 
Prepaid expenses and other 4,647   3,190 
Total current assets 45,969   54,331 
Property and equipment, net 171   149 
Other assets   
Goodwill 78,357   78,357 
Other intangibles, net 14,470   15,198 
Tradename and customer relationships, net 33,003   34,198 
Operating lease right of use assets, net 472   573 
Security deposits and other assets 435   568 
Total other assets 126,736   128,894 
TOTAL ASSETS$172,876  $183,374 
    
LIABILITIES AND STOCKHOLDERS’ EQUITY    
Current liabilities   
Current portion of long-term debt$3,300  $2,000 
Accounts payable – trade 2,980   2,227 
Accrued expenses 5,310   7,706 
Revenue share payable 2,094   5,506 
Taxes payable    49 
Current portion of lease liabilities 219   222 
Deferred revenue 1,053   172 
Total current liabilities 14,956   17,881 
Non-current liabilities   
Long-term debt, net 32,296   34,231 
Lease liabilities, net of current portion 271   371 
Deferred tax liabilities, net 4,337   4,337 
Total liabilities 51,860   56,821 
    
Stockholders’ equity   
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding at June 30, 2024 or December 31, 2023     
Common stock, $0.001 par value, 166,666,667 shares authorized, 20,061,907 and 19,899,679 shares issued at June 30, 2024 and December 31, 2023, respectively 20   20 
Treasury stock, $0.001 par value, 1,741,397 shares held at June 30, 2024 and December 31, 2023. (2)  (2)
Additional paid-in-capital 196,164   190,793 
Accumulated deficit (75,166)  (64,258)
Total stockholders’ equity 121,016   126,553 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$172,876  $183,374 


 
OPTIMIZERX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except share and per share data)
(UNAUDITED)
 
 For the Three Months
Ended

June 30,
 For the Six Months
Ended

June 30,
  2024   2023   2024   2023 
        
Net revenue$18,812  $13,818  $38,502  $26,821 
Cost of revenues, exclusive of depreciation and amortization presented separately below 7,108   5,993   14,595   11,563 
Gross profit 11,704   7,825   23,907   15,258 
        
Operating expenses       
General and administrative expenses 14,380   12,242   30,545   26,274 
Depreciation and amortization 1,073   465   2,140   929 
Total operating expenses 15,453   12,707   32,685   27,203 
Loss from operations (3,749)  (4,882)  (8,778)  (11,945)
Other income (expense)       
Interest expense (1,528)     (3,074)   
Other income 75      75    
Interest income 105   721   125   1,386 
Total other income (expense), net (1,347)  721   (2,874)  1,386 
Loss before provision for income taxes (5,097)  (4,161)  (11,652)  (10,559)
Expense (benefit) from income taxes 1,088   33   744   66 
Net loss$(4,008) $(4,128) $(10,908) $(10,493)
Weighted average number of shares outstanding – basic 18,257,879   16,992,100   18,213,992   17,043,493 
Weighted average number of shares outstanding – diluted 18,257,879   16,992,100   18,213,922   17,043,493 
Loss per share – basic$(0.22) $(0.24) $(0.60) $(0.62)
Loss per share – diluted$(0.22) $(0.24) $(0.60) $(0.62)


 
OPTIMIZERX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(UNAUDITED)
 
 For the Six Months Ended
June 30,
  2024   2023 
OPERATING ACTIVITIES:   
Net loss$(10,908) $(10,493)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:   
Depreciation and amortization 2,140   929 
Stock-based compensation 5,926   7,884 
Increase in bad debt reserve 132   239 
Amortization of debt issuance costs 365    
Changes in:   
Accounts receivable 11,600   3,635 
Prepaid expenses and other assets (1,457)  (1,772)
Accounts payable 752   (732)
Revenue share payable (3,412)  (1,269)
Accrued expenses and other liabilities (2,264)  (1,097)
Taxes payable (855)   
Deferred revenue 881   287 
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 2,900   (2,389)
    
INVESTING ACTIVITIES:   
Purchase of property and equipment (77)  (49)
Purchases of held-to-maturity investments    (109,501)
Redemptions of held-to-maturity investments    112,501 
Acquisition of intangible assets, including intellectual property rights    (3)
Capitalized software development costs (162)  (1,274)
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (239)  1,674 
    
FINANCING ACTIVITIES:   
Cash paid for employee withholding taxes related to the vesting of restricted stock units (555)  (244)
Proceeds from exercise of stock options    145 
Repurchase of common stock    (7,522)
Repayment of long-term debt (1,000)   
NET CASH USED IN FINANCING ACTIVITIES (1,555)  (7,621)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,106   (8,335)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 13,852   18,209 
CASH AND CASH EQUIVALENTS - END OF PERIOD$14,958  $9,874 
    
SUPPLEMENTAL CASH FLOW INFORMATION:   
Cash paid for interest$2,710  $ 
Cash paid for income taxes$110  $ 


 
OPTIMIZERX CORPORATION
RECONCILIATION of GAAP to NON-GAAP FINANCIAL MEASURES
(in thousands, except share and per share data)
(UNAUDITED)
 
 For the Three Months
Ended

June 30,
 For the Six Months
Ended

June 30,
  2024   2023   2024   2023 
Net loss$(4,008) $(4,128) $(10,908) $(10,493)
Depreciation and amortization 1,073   465   2,140   929 
Stock-based compensation 2,903   3,503   5,926   7,884 
Severance expenses 241      660    
Other Income (75)     (75)   
Amortization of debt issuance costs 182      365    
Acquisition expenses       243    
Non-GAAP net income (loss)$316  $(160) $(1,649) $(1,681)
        
Non-GAAP net income (loss) per share       
Diluted$0.02  $(0.01) $(0.09) $(0.10)
Weighted average shares outstanding:       
Diluted 18,358,543   16,992,100   18,213,922   17,043,793 


 For the Three Months
Ended

June 30,
 For the Six Months
Ended

June 30,
  2024   2023   2024   2023 
Net loss$(4,008) $(4,128) $(10,908) $(10,493)
Depreciation and amortization 1,073   465   2,140   929 
Expense (benefit) from income taxes (1,088)  33   (744)  66 
Stock-based compensation 2,903   3,503   5,926   7,884 
Severance expenses 241      660    
Acquisition expenses       243    
Other Income (75)     (75)   
Interest (income) expense, net 1,422   (721)  2,949   (1,386)
Adjusted EBITDA$468  $(848) $191  $(3,000)

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