OptimizeRx Corp (OPRX) Q1 2025 Earnings Call Highlights: Strong Revenue Growth and Strategic Shifts

Yahoo

13-05-2025

Revenue: $21.9 million, an increase of 11% year over year.
Gross Margin: 60.9%, down from 62% in the previous year.
Net Loss: $2.2 million or $0.12 per share, compared to a net loss of $6.9 million or $0.38 per share in the previous year.
Non-GAAP Net Loss: $1.5 million or $0.08 per share, compared to $2 million or $0.11 per share in the previous year.
Adjusted EBITDA: $1.5 million, compared to a $0.3 million loss in the previous year.
Operating Cash Flow: $3.9 million for the first quarter.
Cash Balance: $16.6 million at the end of the quarter.
Debt Balance: $33.8 million, with $6.2 million of principal paid off in the first quarter.
Committed Contracted Revenue: Exceeded $70 million, a greater-than-25% improvement year over year.
Average Revenue per Top 20 Pharmaceutical Manufacturer: Approximately $3 million.
Net Revenue Retention Rate: 114%.
Revenue per FTE: $710,000, up from $641,000 in the previous year.
Warning! GuruFocus has detected 2 Warning Sign with OPRX.
Release Date: May 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
OptimizeRx Corp (NASDAQ:OPRX) reported Q1 2025 revenues of $21.9 million, an 11% increase year over year, surpassing both consensus estimates and internal expectations.
The company improved its adjusted EBITDA to $1.5 million, a significant increase from a loss of $0.3 million in Q1 2024.
Contracted revenue increased by more than 20% year over year, providing strong visibility and positioning for the remainder of the year.
The company raised its full-year revenue guidance to between $101 million and $106 million, with adjusted EBITDA expected between $13 million and $15 million.
Early momentum in transitioning to a subscription-based model, with over 5% of projected annual revenue already converted to subscription contracts for 2025.
Gross margin decreased from 62% in Q1 2024 to 60.9% in Q1 2025, primarily due to product and channel partner mix.
The company reported a net loss of $2.2 million for Q1 2025, although this was an improvement from a $6.9 million loss in Q1 2024.
Despite improvements, the company still faces challenges in achieving multi-year subscription contracts due to the annual budgeting nature of the pharma industry.
The transition to a subscription-based model may impact revenue recognition, spreading revenue over a 12-month period.
The company has a debt balance of $33.8 million, although it has paid off $6.2 million of principal in Q1 2025.
Q: With the current market noise, including tariffs and price negotiations, have you seen any hesitation from your customers? A: Stephen Silvestro, President and Chief Commercial Officer, stated that they have not seen any pull-back from clients. They are receiving real-time updates and have observed clients leaning in more to drive market efforts, particularly leveraging digital channels.
Q: How does the transition to a subscription-based revenue model impact revenue recognition and margins? A: Edward Stelmakh, Chief Financial Officer, explained that subscription revenue is spread over a 12-month period, which is accretive due to the revenue share perspective. The cost of sales for subscription revenue is relatively low, benefiting margins.
Q: Can you provide clarity on the gross margin profile, given the increase in direct-to-consumer managed services? A: Edward Stelmakh noted that while some solutions have lower margins, the company is diversified enough to maintain a stable gross margin profile. They aim to increase margins above the low 60% range, but currently, they are comfortable with the existing range.
Q: What is the visibility on committed revenue for the year, and how does it compare to last year? A: Stephen Silvestro confirmed that committed revenue is north of 80%, showing a 25% improvement over the previous year. This increased visibility gives them confidence in their guidance.
Q: Regarding the pipeline, how are win rates and average deal sizes evolving? A: Stephen Silvestro mentioned that the pipeline continues to grow steadily, with improved conversion rates, particularly in data and subscription components. However, they did not disclose specific average deal sizes for competitive reasons.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.