OptimizeRx Corporation Q3 FY2025 earnings call

• Steve Silvestro noted a strong third quarter with revenues ahead of estimates, and adjusted EBITDA improved. The company is increasing guidance for the year, with revenue expected between $105M and $109M and adjusted EBITDA between $16M and $19M. Initial guidance for 2026 is revenue between $118M and $124M and adjusted EBITDA between $19M and $22M.
• Ed Stelmakh discussed financial results, noting gross margin expansion due to favorable product mix, economies of scale, and channel partner mix. Operating expenses decreased year-over-year, and cash balance increased. KPIs like average revenue per top 20 manufacturer, net revenue retention rate, and revenue per FTE were highlighted.
• The company paid down $2 million of term loan principal post-third quarter and intends to continue accelerating debt paydown. Mid-tier client revenue growth was mentioned, with average revenue for 5 largest customers over 12 months over $11 million.

In the third quarter, OptimizeRx's revenue increased 22% year-over-year to $26.1 million. Gross margin improved from 63.1% in Q3 2024 to 67.2% in Q3 2025. Adjusted EBITDA was $5.1 million, an improvement of over $2 million from the same period last year. Average revenue per top 20 pharmaceutical manufacturer stood at $3.1 million (up from $2.9 million in Q3 2024). Net revenue retention rate was strong at 120%, and revenue per FTE was $820,000 (up from $732,000 in Q3 2024). Revenue contribution is driven by various segments including their omnichannel technology platform and point-of-care network.

• For fiscal year 2025, revenue is expected to be between $105 million and $109 million, and adjusted EBITDA between $16 million and $19 million.
• Initial fiscal year 2026 guidance: revenue expected between $118 million and $124 million, adjusted EBITDA between $19 million and $22 million.
• The company intends to continue paying down term loan principal at an accelerated rate and does not expect to access equity capital markets in the foreseeable future.

• Dependence on a concentrated group of customers.
• Cybersecurity incidents that could disrupt operations.
• Ability to keep pace with growing and evolving technology.
• Effects of government regulation, including potential impacts on the digital pharma marketing landscape.

Q: Ryan Daniels asked about the 2026 outlook and what's driving strong RFP activity.

A: Steve Silvestro said they're providing more visibility into the future as they shift to a predictive model, and RFP season is strong with equal interest in HCP and DTC, with their solutions benefiting from DTC changes. Andy D'Silva added on managed services contracts being at normalized rates and conservative guidance.

Q: Richard Baldry inquired about fourth quarter revenue guidance and adjusted EBITDA.

A: Steve Silvestro and Ed Stelmakh explained it's about full-year phasing, moving to a smoother revenue model, and being conservative with visibility on what can be delivered.

Q: Eric Martinuzzi asked about RFP trends and win rate.

A: Steve Silvestro said more RFPs are coming, RFPs are aligned with their offerings, and win rate is improving due to the commercial team engaging clients better.

Q: Anderson Schock asked about the Lamar Advertising partnership and gross margin expansion.

A: Steve Silvestro discussed the partnership's early stages and potential, and Ed Stelmakh explained gross margin expansion was due to product mix, channel partner mix, and DAAP/DTC platform growth, with margins stabilizing but having upside.

Q: Jeffrey Garro asked about operating leverage and margin expansion.

A: Ed Stelmakh said OpEx is leveragable, with cash OpEx increase due to bonuses, and operating expense run rate expected to be relatively stable on a cash basis.