OPRX

• Core Financial and Operational Progress

  • Q2 FY26 revenue and adjusted EBITDA exceeded consensus analyst expectations, with continued margin expansion and disciplined operational execution despite a dynamic healthcare marketing environment
  • Outside of the small set of struggling legacy customers, the business sees improving engagement and growth, with stabilization across most large customers
  • The company has completed a planned leadership transition for its finance organization: Edward Stelmakh will step down as CSO/CFO at the end of 2026, remain as a strategic advisor in 2027, and Andrew D'Silva will become CFO effective January 1, 2027, with Heather Favazza promoted to Chief Accounting Officer
  • The company completed refinancing of its term loan with Fifth Third Bank, paid down $5.3 million in principal during the quarter ($5 million ahead of schedule), and paid an additional $3 million after quarter end, leaving outstanding debt at $16.7 million

• Product and Strategic Innovation

  • Announced three major product updates expanding the company's platform and competitive position: (1) DeepIntent became the first healthcare demand-side platform (DSP) integrated directly with OptimizeRx's authenticated EHR network, which is now live; (2) launched the patent-pending Natural Language Audience Builder (NLAB), an AI tool that lets marketers build custom HCP audiences via natural language prompts directly within existing DSP/planning platforms; (3) launched CopayQ, a next-generation copay activation solution that delivers savings information during the prescribing workflow to improve patient adherence and commercial outcomes
  • The company is evolving from a pure point-of-care marketing provider to the operating system for pharmaceutical marketers, connecting brands, agencies, DSPs, providers, and patients through authenticated clinical workflows
  • Continued progress expanding market share among mid-sized and emerging life science companies, an untapped growth opportunity, as these firms seek enterprise-grade technology without large infrastructure investments
  • Continued successful transition to higher-margin recurring subscription revenue, which improves long-term revenue visibility and financial model predictability

• Management reaffirmed full year FY26 revenue guidance of $95 million to $100 million, and adjusted EBITDA guidance of $21 million to $25 million, maintaining previous guidance with no upward or downward revision
• Gross margins are now expected to normalize to a high 60% to low 70% range for full year FY26, an upward improvement from prior expectations driven by successful margin optimization strategies and favorable product mix
• Full year FY26 revenue is still expected to be weighted toward the second half of the year, consistent with customer seasonal purchasing patterns, with Q4 expected to represent 35% to 40% of full year revenue, and Q4 revenue significantly higher than Q3 revenue
• Management confirmed that the new high 60% to low 70% gross margin target is a sustainable long-term baseline for the business, not an episodic 2026-specific result, and that profitability will remain at this level as the company scales its DSP programmatic business
• Management expects that when top-line growth returns (projected for 2027), the company will quickly return to its Rule of 40 profitability-growth target

OptimizeRx does not break out separate product segment financial results in this call. Aggregate Q2 FY26 revenue was $20.5 million, a 30% year-over-year decline from $29.2 million in Q2 FY25. The decline was concentrated in a small number of large legacy customers that utilized lower-margin managed services, which the company has been transitioning away from since the 2023 Medicx acquisition, plus one large customer that generated no revenue in Q2 FY26. Aggregate adjusted EBITDA was $4.9 million in Q2 FY26, down from $5.8 million year-over-year. Net loss was $700 thousand ($0.04 per share) in Q2 FY26, compared to net income of $1.5 million ($0.08 per share) in Q2 FY25. Non-GAAP net income was $3.1 million ($0.16 per diluted share) in Q2 FY26, down from $3.7 million ($0.19 per diluted share) year-over-year. Key KPIs: average revenue per top 20 pharmaceutical manufacturer is $2.7 million, net revenue retention rate is 90% (driven by spend optimization at a small number of large accounts, not broad churn), and revenue per FTE is $750 thousand. AI-enabled software recurring revenue grew 25% year-over-year, and adoption of the AI-enabled DAP audience activation platform grew over 30% year-over-year.

• Revenue declines are concentrated in a small number of large customers, with one major customer that generated no revenue in Q2 FY26, creating revenue concentration risk that disrupts near-term top-line results
• The healthcare marketing environment remains dynamic, with continued variability in the timing and mix of second half revenue, and cautious spending behavior among large pharmaceutical customers driven by macroeconomic uncertainty, geopolitical instability, inflation, and U.S. government policy changes impacting the industry
• Most favored nation (MFN) pricing dynamics and regulatory changes from the FDA and HHS have created uncertainty and near-term spending delays among large top 20 pharmaceutical customers
• The timing of revenue from the returning large customer and new DSP programmatic partnerships remains uncertain, with no revenue from the large customer currently baked into second half guidance
• General inherent risks to forward-looking statements include government regulation, industry competition, customer concentration, cybersecurity risks, the ability to keep pace with evolving technology, and the ability to maintain key contracts with e-prescription and EHR networks

Q: What is the current update on the previously noted large disrupted client, and is any revenue from this client included in back half guidance? What progress is being made on DSP partnerships, and what is the expected growth trajectory for this opportunity? How would potential FDA elimination of the adequate provision framework for DTC pharma advertising impact the business? / A: No revenue from this large client is currently baked into back half FY26 guidance, but management is seeing positive early progress and has re-opened active discussions with the client. The company's new CMO joined from this client, which is expected to help resolve past commercial missteps. The DeepIntent DSP integration is now live, with initial bid flow already occurring on the platform, opening access to 60% of current market buys that were previously unavailable to OptimizeRx. Discussions with additional DSP partners are ongoing, with no new announcements ready at this time. Management views the potential FDA rule change as favorable to the business, as it would push marketing spending from traditional DTC channels into ACP-focused point-of-care and digital channels where OptimizeRx operates, though the company has not included this potential tailwind in current guidance.

Q: With adjusted EBITDA expected to hit $13-$17 million in the second half, how will capital allocation strategy evolve? Will the company remain focused solely on debt paydown, or will it increase share buybacks at current depressed share prices? How much contracted visibility is there for the implied second half revenue rebound, and how much relies on historical seasonal patterns? How are mid-sized/non-top 20 customers performing compared to large top 20 customers, and what is the current activity level among top 20 customers excluding the disrupted client? / A: Capital allocation will prioritize debt paydown first, with outstanding principal now at $16.7 million. After debt reduction, the company has a $10 million approved buyback program with an existing 10b5-1 plan in place to trigger share repurchases if the share price remains depressed. Current contracted revenue visibility aligns with historical seasonality, so management is reiterating existing guidance rather than raising it. Positive momentum is building as the back half approaches, with any incremental contracted revenue above the current guide to be updated in future earnings calls. Mid-sized and long-tail customers are growing at an accelerated rate, and are the company's fastest-growing segment, as they have not been targeted by U.S. government pricing reforms and have capitalized on the opportunity to compete more effectively with top 20 firms. Activity levels and strategic engagement among top 20 customers (excluding the disrupted client) have increased significantly after early-year uncertainty around MFN pricing, with positive buying signals emerging for the back half of the year.

Q: Is the adjusted gross margin outlook of high 60% to low 70% sustainable, or is it a 2026-specific result? What drove Q2 margin upside, and what is the margin profile for the new DSP programmatic business compared to traditional engagements? Is the Rule of 40 still a core company objective? / A: The new high 60% to low 70% gross margin range is a sustainable long-term baseline for the business, not an episodic 2026 result, and will be maintained as the DSP business scales. Q2 margin upside was driven by favorable channel mix, as the company no longer has low-margin DTC managed service revenue, and new channel partner arrangements that have improved gross margin despite top-line disruption from the large client. The Rule of 40 remains a core objective. FY26 is an anomaly for top-line growth, but the company has already proven it can deliver strong profitability even in a soft growth year. When top-line growth returns in 2027, the company will quickly return to meeting Rule of 40 targets.