OptimizeRx Reports Second Quarter 2024 Financial Results

About this update from Optimizerx Corporation

– 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, 2024Time: 4:30 p.m. Eastern Time ( 1:30 p.m. Pacific Time )Toll Free: 1-800-343-4849International: 1-203-518-9848Conference 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 Twitter , LinkedIn 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 [email protected] Investor Relations Contact Ashley Robinson LifeSci Advisors, LLC [email protected] 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 MonthsEnded June 30 , For the Six MonthsEnded 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 MonthsEnded June 30 , For the Six MonthsEnded 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 MonthsEnded June 30 , For the Six MonthsEnded 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 ) Source: OptimizeRx Corporation

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