UPDATE – OptimizeRx Reports Second Quarter 2022 Financial Results, Innovative Platform Expansions Now Extends Reach to HCPs Across Social Media and Patients at Point-of-Dispense

Rochester, Michigan, UNITED STATES


  • Revenue Up 3% to $14.0 million, driven by new customer and program launches
  • Increase in breadth and scope of brand deal size represents further momentum in the validation of our value proposition
  • Generated $4.4 million in cash flow from operations during the first half of 2022

ROCHESTER, Mich., Aug. 09, 2022 (GLOBE NEWSWIRE) -- OptimizeRx Corp. (the “Company”) (Nasdaq: OPRX), a leading provider of point-of-care technology solutions helping patients start and stay on therapy, reported results for the three months ended June 30, 2022. Quarterly comparisons are to the same year-ago period.

 Rolling Twelve Months Ended
June 30,
Key Performance Indicators (KPIs)* 2022   2021 
Average revenue per top 20 pharmaceutical manufacturer$2,389,969  $2,361,254 
Percent of top 20 pharmaceutical manufacturers that are customers 95%  85%
Percent of total revenue attributable to top 20 pharmaceutical manufacturers 71%  77%
Net revenue retention 113%  170%
Revenue per average full-time employee$661,319  $668,395 

Financial Highlights

  • Revenue in the second quarter of 2022 increased 3% to $14.0 million, from $13.6 million as compared to the same year ago period.
  • Gross profit in the second quarter of 2022 increased 12% year-over-year to $9.0 million.
  • GAAP net loss totaled $3.9 million or $(0.21) per basic and diluted share in the second quarter.
  • Non-GAAP net income in the second quarter totaled $0.7 million or $0.04 per basic and fully diluted shares outstanding. (see definition of this non-GAAP measure and reconciliation to GAAP, below).
  • Cash and cash equivalents totaled $87.4 million as of June 30, 2022 as compared to $84.7 million as of December 31, 2021.

Second Quarter and Recent Highlights

  • In April, we completed the acquisition of EvinceMed, a specialty drug prescription initiation platform.
  • Omni-channel platform reach is extended through an exclusive partnership with Equals 5. This new extension is the only healthcare provider (HCP)-level solution providing targeted physician engagement on social media platforms.
  • Platform integration of TelaRep™ one-click prescriber connectivity solution completed. TelaRep allows doctors to text pharmaceutical representatives directly from within the electronic health record (EHR) platform and can now be accessed by over 200,000 in-network HCPs.
  • Announced authorization of a share repurchase program, under which OptimizeRx may repurchase up to $20 million of its outstanding common stock. Through August 8, 2022, the Company repurchased 232,745 shares at an average price of $23.02 and had $14.6 million available under the program.
  • Published industry results of a survey of 102 specialist physicians highlighting how inefficient access pathways negatively impact patient care. Physicians noted access challenges impact their care plans for up to 33% of patients.
  • Financial Times ranked OptimizeRx amongst Americas’ fastest-growing companies for the third consecutive year.

Management Commentary

Will Febbo, OptimizeRx CEO commented, “We continue to perform strongly against our long term land-and-expand strategy and continue to have favorable net revenue retention despite the various macro factors that resulted in a weaker than expected second quarter. We believe the impact is temporary in nature, and our value proposition remains strong, as is evidenced by the fact that we count 95% of the industry’s top 20 pharma manufacturers as our customers.

We have advanced our omnichannel reach through recent acquisitions and exclusive partnerships, strengthening our platform’s capabilities and its desirability to our customer base. These factors build on our already strong value proposition with our clients by driving broader and deeper opportunities to engage with HCPs and patients. As we work to address affordability, access, and adherence challenges in new ways, we reinforce our foundation for strong profitable growth."

Q2 2022 Financial Summary

Total revenue reported for the three months ended June 30, 2022 was approximately $14.0 million, an increase of 3% over the approximately $13.6 million from the same period in 2021. The increased revenue resulted from increases in sales from our access solutions.

Gross margin increased to 64% from 59% in the year-ago quarter, with the increase related to a more favorable channel partner and solution mix.

Operating expenses totaled $12.9 million and increased from $7.7 million in the same year-ago quarter. This increase in expense is primarily due to investment in, and expansion of, our workforce to enable future growth and includes $3.1 million in additional stock based compensation than was recognized in the year-ago quarter.

Net loss on a GAAP basis was approximately $3.9 million or $(0.21) per basic and diluted share, as compared to net income of $0.4 million or $0.02 per basic and fully diluted share in the second quarter of 2021.

Non-GAAP net income was $0.7 million or $0.04 per basic and fully diluted shares outstanding, compared to non-GAAP net income of $1.8 million or $0.10 per basic and fully diluted share in the same year-ago period (see definition of this non-GAAP measure and reconciliation to GAAP, below).

Cash and cash equivalents totaled $87.4 million as of June 30, 2022, as compared to $84.7 million as of December 31, 2021. The increase to our cash balance was almost completely due to cash flows from operating activities.

2022 Financial Outlook
Based on first half results, the Company is updating its full year financial outlook for 2022 and now expects net revenue of $62 million to $68 million, representing year-over-year growth of 1% to 11%, respectively, and gross margins to be between 59% and 62%.

Our change to the second half 2022's outlook is driven by what we perceive to be temporary life sciences industry challenges related to a slowdown in the number of new drug approvals, increased turnover rates at client companies and longer sales cycles associated with larger deal sizes in the funnel.

Conference Call

OptimizeRx management will host the presentation, followed by a question-and-answer period.

Date: Tuesday, August 9, 2022
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Web access:         https://viavid.webcasts.com/starthere.jsp?ei=1559358&tp_key=f1602f7af5
Toll-free dial-in number: 1-877-423-9813
International dial-in number: 1-201-689-8573
Conference ID: 13731472

Please call the conference telephone number five minutes prior to the start time.

A replay of the call will remain available for 12 months via the Investors section of the OptimizeRx website at www.optimizerx.com/investors.

Definition and Use of Non-GAAP Financial Measures
This earnings release includes a presentation of non-GAAP net income (loss) and non-GAAP earnings (loss) per share or non-GAAP EPS, both of which are non-GAAP financial measures.

The Company defines non-GAAP net income (loss) as GAAP net income (loss) with an adjustment to add back depreciation, amortization, stock-based compensation, acquisition expenses, income or loss related to the fair value of contingent consideration, and deferred income taxes. Non-GAAP EPS is defined as non-GAAP net income (loss) divided by the number of weighted average shares outstanding on a basic and diluted basis. 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 excludes non-cash expenses allows for meaningful comparisons between the Company’s core 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 own core business operating results over different periods of time.

The Company’s non-GAAP net income (loss) and non-GAAP EPS 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 income (loss) and non-GAAP EPS 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 income (loss) and non-GAAP EPS for the three months ended June 30, 2022 and 2021.

Definition of Key Performance Indicators*
Top 20 pharmaceutical manufacturers: Top 20 pharmaceutical manufacturers are based on Fierce Pharma’s “The top 20 pharma companies by 2020 revenue.”

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 60% of U.S. healthcare providers and millions of their patients through the most intelligent technology platform embedded within a proprietary digital point-of-care network, OptimizeRx helps patients start and stay on their medications. 

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 and 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, competition, and other risks summarized in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, 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
(UNAUDITED)


 June 30,
2022
 December 31,
2021
    
ASSETS   
Current Assets   
Cash and cash equivalents$87,392,970  $84,681,770 
Accounts receivable, net 18,732,849   24,800,585 
Prepaid expenses and other 4,280,843   5,630,655 
Total Current Assets 110,406,662   115,113,010 
Property and equipment, net 143,337   143,818 
Other Assets   
Goodwill 22,673,820   14,740,031 
Intangible assets, net 13,933,072   10,646,654 
Security deposits and other assets 12,860   12,859 
Right of use assets, net 278,513   328,820 
Total Other Assets 36,898,265   25,728,364 
TOTAL ASSETS$147,448,264  $140,985,192 
    
LIABILITIES AND STOCKHOLDERS’ EQUITY    
Current Liabilities   
Accounts payable – trade$1,296,041  $606,808 
Accrued expenses 1,638,791   2,902,836 
Revenue share payable 2,376,836   4,378,216 
Current portion of lease obligations 87,673   90,982 
Deferred revenue 1,041,919   1,389,907 
Total Current Liabilities 6,441,260   9,368,749 
Non-Current Liabilities   
Lease liabilities, net of current portion 189,802   236,726 
Total Liabilities 6,631,062   9,605,475 
Commitments and contingencies (See note 9)     
Stockholders’ Equity   
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding at June 30, 2022 and December 31, 2021     
Common stock, $0.001 par value, 166,666,667 shares authorized, 18,174,182 and 17,860,975 shares issued at June 30, 2022 and December 31, 2021, respectively 18,188   17,861 
Treasury stock (13)   
Additional paid-in-capital 183,698,497   166,615,514 
Accumulated deficit (42,899,470)  (35,253,658)
Total Stockholders’ Equity$140,817,202  $131,379,717 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$147,448,264  $140,985,192 

The accompanying notes are an integral part of these condensed consolidated financial statements.


OPTIMIZERx CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)


 For the Three Months
Ended June 30,
 For the Six Months
Ended June 30,
  2022   2021  2022   2021 
        
Net Revenue$13,978,665  $13,625,639 $27,710,195  $24,854,850 
Cost of revenues 4,988,716   5,580,964  10,618,574   10,685,567 
Gross margin 8,989,949   8,044,675  17,091,621   14,169,283 
        
Operating expenses       
Salaries, wages, & benefits 4,981,549   3,906,796  10,287,416   7,487,612 
Stock-based compensation 4,025,323   897,038  7,199,421   1,604,191 
Other general and administrative expenses 3,891,607   2,900,702  7,274,416   5,375,649 
Total operating expenses 12,898,479   7,704,536  24,761,253   14,467,452 
Income (Loss) from operations (3,908,530)  340,139  (7,669,632)  (298,169)
Other income       
Interest income 23,816   11,961  23,820   12,892 
Income (Loss) before provision for income taxes (3,884,714)  352,100  (7,645,812)  (285,277)
Income tax benefit         
Net Income (Loss)$(3,884,714) $352,100 $(7,645,812) $(285,277)
Weighted average number of shares outstanding – basic 18,122,500   17,347,096  18,000,958   16,720,114 
Weighted average number of shares outstanding – diluted 18,122,500   18,104,807  18,000,958   16,720,114 
Income (loss) per share – basic$(0.21) $0.02 $(0.42) $(0.02)
Income (loss) per share – diluted$(0.21) $0.02 $(0.42) $(0.02)

The accompanying notes are an integral part of these condensed consolidated financial statements.


OPTIMIZERx CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

 For the Six Months Ended
June 30,
  2022   2021 
CASH FLOWS FROM OPERATING ACTIVITIES:   
Net loss$(7,645,812) $(285,277)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Depreciation and amortization 1,049,656   1,054,138 
Stock-based compensation 7,199,421   1,354,106 
Stock issued for board service    250,085 
Provision for loss on accounts receivable 98,727   40,000 
Changes in:   
Accounts receivable 5,969,009   (88,221)
Prepaid expenses and other assets 1,266,478   1,332,132 
Accounts payable 64,232   187,211 
Revenue share payable (2,001,379)  (1,628,556)
Accrued expenses and other liabilities (1,264,045)  (393,778)
Operating leases, net 74    
Deferred revenue (347,989)  33,814 
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,388,372   1,855,654 
    
CASH FLOWS USED IN INVESTING ACTIVITIES:   
Purchase of property and equipment (41,335)  (43,654)
EvinceMed acquisition (2,000,000)   
Purchase of intangible assets, including intellectual property rights (145,257)  (176,822)
NET CASH USED IN INVESTING ACTIVITIES (2,186,592)  (220,476)
    
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:   
Proceeds from public offering of common stock, net of offering costs    70,671,536 
Repurchase of common stock (321,054)   
Proceeds from exercise of stock options 830,474   2,710,778 
Payment of contingent consideration    (1,610,813)
NET CASH PROVIDED BY FINANCING ACTIVITIES 509,420   71,771,501 
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,711,200   73,406,679 
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 84,681,770   10,516,776 
CASH AND CASH EQUIVALENTS - END OF PERIOD$87,392,970  $83,923,455 
    
SUPPLEMENTAL CASH FLOW INFORMATION:   
Cash paid for interest$  $ 
Reduction of EvinceMed purchase price for amounts previously paid$708,334  $ 
Shares issued in connection with acquisition$9,374,455  $ 
Cash paid for income taxes$  $ 
Lease liabilities arising from right of use assets$  $ 

The accompanying notes are an integral part of these condensed consolidated financial statements. 


OPTIMIZERx CORPORATION
RECONCILIATION of NON-GAAP to GAAP FINANCIAL MEASURES
(UNAUDITED)

 Three Months Ended
June 30,
 Six Months Ended
June 30,
  2022   2021  2022   2021 
Net Income (Loss)$(3,884,714) $352,100 $(7,645,812) $(285,277)
Depreciation and amortization 578,117   527,958  1,049,656   1,054,138 
Stock-based compensation 4,025,323   897,038  7,199,421   1,604,191 
Acquisition expense 2,579     19,739    
Non-GAAP net income (loss) 721,305   1,777,096  623,004   2,373,052 
        
Non-GAAP net income (loss) per share       
Basic$0.04  $0.10 $0.03  $0.14 
Diluted$0.04  $0.10 $0.03  $0.14 
Weighted average shares outstanding:       
Basic 18,122,500   17,347,096  18,000,958   16,720,114 
Diluted 18,342,392   18,104,807  18,140,941   17,467,159