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

·15 min read
OptimizeRx Corporation
OptimizeRx Corporation
  • 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 loss 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 loss 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
Relations Contact

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

 

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