• Full Year Revenue: $92.1 million.
• Adjusted EBITDA: $11.7 million.
• Fourth Quarter Revenue: $32.3 million, up 14% from $28.4 million in Q4 2023.
• Gross Margin: Increased to 68.2% in Q4 2024 from 62.9% in Q4 2023.
• Operating Expenses: Decreased by $10.4 million year-over-year in Q4 2024.
• Net Loss: $0.1 million in Q4 2024, compared to $4.1 million in Q4 2023.
• Non-GAAP Net Income: $5.5 million or $0.30 per diluted share in Q4 2024.
• Adjusted EBITDA for Q4: $8.8 million, up from $5.8 million in Q4 2023.
• Cash and Short-term Investments: $13.4 million as of December 31, 2024.
• Debt Balance: $34.3 million after paying off $2.5 million of principal in Q4 2024.
• Average Revenue for Top 20 Pharmaceutical Manufacturers: $2.9 million, a 22% increase year-over-year.
• Net Revenue Retention Rate: 121%, up from 105% in the prior period.
• Revenue per FTE: $701,000, up from $586,000 in the prior year.

• Warning! GuruFocus has detected 3 Warning Signs with OPRX.

Release Date: March 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• OptimizeRx Corp (NASDAQ:OPRX) exceeded its 2024 financial guidance with revenue of $92.1 million and adjusted EBITDA of $11.7 million.
• The company reported a significant gross margin increase from 62.9% in Q4 2023 to 68.2% in Q4 2024, driven by a favorable solution and channel partner mix.
• OptimizeRx Corp (NASDAQ:OPRX) is transitioning to a subscription-based revenue model, which is expected to improve revenue predictability and margins.
• The company has a strong competitive edge with its large EHR prescription network and omnichannel technology platform, enhancing its ability to connect doctors and patients effectively.
• OptimizeRx Corp (NASDAQ:OPRX) has seen a 25% average script lift in its 6-month programs, demonstrating strong brand engagement and measurable success.

Negative Points

• Despite improvements, OptimizeRx Corp (NASDAQ:OPRX) reported a net loss of $0.1 million for Q4 2024, compared to a net loss of $4.1 million in Q4 2023.
• The company faces challenges with script abandonment, as approximately 50% of patients never fill their prescriptions at the pharmacy.
• OptimizeRx Corp (NASDAQ:OPRX) is still in the early stages of transitioning to a Rule of 40 company, which is expected to take three to five years.
• The gross margin achieved in Q4 2024 is not expected to be sustainable throughout the year due to seasonal factors.
• The company is navigating a competitive environment, particularly with the integration of its DTC and HCP business models.

Q & A Highlights

Q: Can you elaborate on the focus on customer centricity and how it might change your strategy with clients? A: Stephen Silvestro, CEO, emphasized increasing customer centricity by ensuring the company is easy to do business with and delivers strong results, making it easier for clients to renew and expand their footprint with OptimizeRx.

Q: How will transitioning to a subscription-based revenue model impact the business? A: Stephen Silvestro explained that the transition to a subscription model, particularly for the data component of their DAAP solution, will make revenue more predictable and recurring. CFO Edward Stelmakh added that this shift will enhance contract renewals and extend contract values.

Q: What drove the significant gross margin expansion in the quarter, and will it continue? A: CFO Edward Stelmakh attributed the margin expansion to a favorable product mix, particularly from DAAP-related revenues. He noted that while the high margins seen in Q4 are seasonal, the company aims to maintain higher margins through strategic efforts.

Q: What is the timeline for becoming a Rule of 40 company, and how will it be achieved? A: CFO Edward Stelmakh indicated that achieving the Rule of 40 is a three to five-year journey, primarily driven by EBITDA expansion and top-line growth. The company aims to leverage its highly scalable business model to reach this goal.

Q: How does the competitive environment look, especially with the integration of HCP and DTC capabilities? A: Stephen Silvestro stated that OptimizeRx remains the only company capable of integrating HCP and DTC at scale with a proprietary network. He expressed confidence in their competitive advantage and ability to scale, supported by their Chief Product and Technology Officer's efforts in audience integration.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.