OptimizeRx Reports Strong Fourth Quarter and Full Year 2023 Financial Results - Form 8-K

OptimizeRx Reports Strong Fourth Quarter and Full Year 2023 Financial Results

-	Q4 revenue of $28.4 million, increasing 44% year-over-year

-	Q4 gross profit increased 43% year-over-year to $17.8 million with gross margins coming in at 63% for both periods

-	Acquired Healthy Offers, Inc. (dba Medicx Health), a leading healthcare consumer-focused omnichannel marketing and analytics company that significantly expands our footprint with consumers and patients

-	Meaningfully increased our DAAP footprint: 24 DAAP deals in 2023 compared to six deals in 2022

Waltham, MA. - April 16, 2024 - OptimizeRx Corp. (the "Company") (Nasdaq: OPRX), a leading provider of healthcare technology solutions helping life sciences companies reach and engage healthcare professionals (HCPs) and patients, reported results for the fourth quarter and full year ended December 31, 2023.

		Twelve Months Ended December 31,
Key Performance Indicators (KPIs)*		2023			2022
Average revenue per top 20 pharmaceutical manufacturer		$	2,566,832			$	2,136,746
Percent of top 20 pharmaceutical manufacturers that are customers			90	%			90	%
Percent of total revenue attributable to top 20 pharmaceutical manufacturers			65	%			62	%
Net revenue retention			105	%			90	%
Revenue per average full-time employee		$	586,242			$	606,312

Will Febbo, OptimizeRx CEO commented, "Q4 of 2023 ended strongly, setting the Company up well for 2024. Our revenue for the quarter exceeded expectations, reaching $28.4 million, a 44% increase year-over-year. This was fueled by organic growth through our Dynamic Audience Activation Platform (DAAP) and a two-month contribution from the Medicx Health acquisition. Notably, our core HCP business saw an over 30% growth compared to Q4 2022.

I'm extremely proud of everything we accomplished last year. DAAP deals quadrupled to 24, aligning with our strategic goals and providing a solid revenue base and momentum for 2024. Meanwhile, the acquisition of Medicx Health merged a leading Direct-to-Consumer (DTC) audience activation and messaging execution business with our HCP-focused, omnichannel, digital point-of-care pharma marketing business, unlocking new markets and cross-selling opportunities.

Additionally, we successfully completed our operational realignment to focus on core business lines and streamlining our operations to align with our profitable growth strategy."

Financial Highlights

●	Revenue in the fourth quarter of 2023 increased 44% to $28.4 million, from $19.7 million in the same period of 2022, with the full year revenue coming in at $71.5 million, a 15% increase when compared to the same year-ago period.

●	Gross profit in the fourth quarter of 2023 increased 43% year-over-year to $17.8 million. Gross profit for the full year came in at $42.9 million.

●	GAAP net loss totaled $(4.1) million or $(0.23) per basic and diluted share in the fourth quarter and totaled $(17.6) million or $(1.03) per basic and diluted share for the full year.

●	Non-GAAP net income in the fourth quarter totaled $4.6 million or $0.26 per fully diluted shares outstanding and came in at $4.4 million or $0.26 per fully diluted shares outstanding for the full year (see definition of this non-GAAP measure and reconciliation to GAAP, below).

●	Adjusted EBITDA for the fourth quarter came in at $5.8 million a 50% increase from the $3.9 million we recognized during the same year-ago period. Adjusted EBITDA for the full year came in at $3.6 million.

Financial Outlook

For the full year 2024, the Company is reiterating its 2024 guidance and expects revenue to be at least $100 million with an Adjusted EBITDA of at least $11 million.

Definition and Use of Non-GAAP Financial Measures

This earnings release includes a presentation of non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share or non-GAAP EPS, Adjusted EBITDA, all 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, amortization of debt issuance costs, stock-based compensation, acquisition expenses, severance expense related to a reduction in force, income or loss related to the fair value of contingent consideration, gain or loss from the disposal of a business, asset impairment charges, other income (loss), 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 diluted basis. Adjusted EBITDA is defined as GAAP net income (loss) with an adjustment to add back depreciation, amortization, interest, stock-based compensation, acquisition expenses, severance expense related to a reduction in force, income or loss related to the fair value of contingent consideration, gain or loss from the disposal of a business, asset impairment charges, other income (loss), and deferred income taxes. 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 exclude non-cash expenses allows for meaningful comparisons between the Company's 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 business operating results over different periods of time.

The Company's non-GAAP financial 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), non-GAAP EPS and Adjusted EBITDA 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, Non-GAAP EPS and Adjusted EBITDA for the fourth quarter and full year ended December 31, 2023 and 2022. Although the Company provides guidance for Adjusted EBITDA, it is not able to provide guidance to the most directly comparable GAAP measures. Reconciliations for forward-looking figures would require unreasonable efforts at this time because of the uncertainty and variability of the nature and amount of certain components of various necessary GAAP components, including, for example, those related to compensation, acquisition expenses, amortization or others that may arise during the year, and the Company's management believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. For the same reasons, the Company is unable to address the probable significance of the unavailable information.

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 2022 revenue." We previously used "The top 20 pharma companies by 2020 revenue". As a result of this change, prior periods have been restated for comparative purposes.

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 period.

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 two million of U.S. healthcare providers and millions of their patients through an 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 Twitter, LinkedIn 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, future performance, expected revenues, expected Adjusted EBITDA and prospects. 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, seasonal trends, our ability to maintain our contracts with electronic prescription platforms, competition, and other risks summarized in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, 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

[email protected]

Investor Relations Contact

Ashley Robinson

LifeSci Advisors, LLC

[email protected]

OPTIMIZERx CORPORATION

CONSOLIDATED BALANCE SHEETS

		December 31,
		2023			2022
ASSETS
Current Assets
Cash and cash equivalents		$	13,852,456			$	18,208,685
Short-term investments			-				55,931,821
Accounts receivable, net of allowance for credit losses of $239,172 and $352,043 at December 31 2023 and 2022, respectively			36,253,214				22,155,301
Taxes receivable			1,035,754				-
Prepaid expenses and other			3,189,468				2,280,828
Total Current Assets			54,330,892				98,576,635
Property and equipment, net			149,407				137,448
Other Assets
Goodwill			78,357,074				22,673,820
Patent rights, net			6,184,742				1,940,178
Technology assets, net			9,012,756				7,702,895
Tradename and customer relationships, net			34,198,084				3,379,838
Operating lease right-of-use assets			572,895				235,320
Security deposits and other assets			568,048				5,051
Total Other Assets			128,893,599				35,937,102
TOTAL ASSETS		$	183,373,898			$	134,651,185
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt		$	2,000,000			$	-
Accounts payable - trade			2,227,177				1,549,979
Accrued expenses			7,754,781				2,601,246
Revenue share payable			5,505,701				3,990,440
Current portion of lease liabilities			221,625				89,902
Deferred revenue			171,841				164,309
Total Current Liabilities			17,881,125				8,395,876
Non-Current Liabilities
Long-term debt, net			34,230,737				-
Lease liabilities, net of current portion			371,438				144,532
Deferred tax liabilities, net			4,337,424				-
Total Liabilities			56,820,724				8,540,408
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding at December 31, 2023 and 2022, respectively			-				-
Common stock, $0.001 par value, 166,666,667 shares authorized, 19,899,679 and 18,288,571 shares issued at December 31, 2023 and 2022, respectively			19,899				18,289
Treasury stock, $0.001 par value, 1,741,397 and 1,214,398 purchased at December 31, 2023 and 2022, respectively			(1,741	)			(1,214	)
Additional paid-in-capital			190,792,980				172,785,800
Accumulated deficit			(64,257,964	)			(46,692,098	)
Total Stockholders' Equity		$	126,553,174			$	126,110,777
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	183,373,898			$	134,651,185

OPTIMIZERx CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

		For the three months ended December 31,			For the year ended December 31,
		2023			2022			2023			2022
Net revenue		$	28,368,946			$	19,654,457			$	71,521,506			$	62,450,156
Cost of revenues, exclusive of depreciation and amortization presented separately below			10,527,640				7,200,029				28,621,589				23,483,336
Gross margin			17,841,306				12,454,428				42,899,917				38,966,820
Operating Expenses
Stock-based compensation			2,627,480				4,269,160				13,717,333				15,745,822
Loss on disposal of a business			2,142,319				-				2,142,319				-
Depreciation and amortization			1,006,228				456,545				2,401,628				2,022,029
Impairment charges			6,737,580				-				6,737,580				-
Other sales, general and administrative expenses			16,230,872				8,593,070				44,302,771				33,489,707
Total operating expenses			28,744,479				13,318,775				69,301,631				51,257,558
Loss from operations			(10,903,173	)			(864,347	)			(26,401,714	)			(12,290,738	)
Other income (expense)
Interest expense			(1,453,764	)			-				(1,453,764	)			-
Other income			500,001				-				500,001				-
Interest income			117,608				538,511				2,191,689				852,298
Total other income (expense), net			(836,155	)			538,511				1,237,926				852,298
Loss before provision for income taxes			(11,739,328	)			(325,836	)			(25,163,788	)			(11,438,440	)
Income tax benefit			7,597,922				-				7,597,922				-
Net loss		$	(4,141,406	)		$	(325,836	)		$	(17,565,866	)		$	(11,438,440	)
Weighted average number of shares outstanding - basic			17,769,670				17,159,971				17,124,801				17,783,992
Weighted average number of shares outstanding - diluted			17,769,670				17,159,971				17,124,801				17,783,992
Loss per share - basic		$	(0.23	)		$	(0.02	)		$	(1.03	)		$	(0.64	)
Loss per share - diluted		$	(0.23	)		$	(0.02	)		$	(1.03	)		$	(0.64	)

OPTIMIZERx CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

		For the year ended December 31,
		2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(17,565,866	)		$	(11,438,440	)
Adjustments to reconcile net loss to net cash (used in) / provided by operating activities:
Depreciation and amortization			2,401,628				2,022,029
Asset impairment charges			6,737,580				-
Loss on disposal of business			2,142,319				-
Increase in bad debt expense			665,973				363,512
Stock-based compensation			13,717,333				15,745,822
Amortization of debt issuance costs			210,737				-
Change in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable			(8,712,954	)			2,281,773
Prepaid expenses and other assets			(573,333	)			2,650,951
Accounts payable			(1,320,150	)			943,171
Revenue share payable			1,515,262				(387,776	)
Accrued expenses and other liabilities			1,305,164				(301,366	)
Deferred tax liabilities			(7,695,374	)			-
Deferred revenue			(67,472	)			(1,225,598	)
NET CASH (USED IN) / PROVIDED BY OPERATING ACTIVITIES			(7,239,153	)			10,654,078
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of property and equipment			(87,073	)			(81,005	)
Proceeds from sale of property and equipment			10,000				-
Cash paid for acquisitions, net of cash acquired			(82,947,264	)			(2,000,000	)
Proceeds from sale of business			2,540,000				-
Purchase of short-term investments			(162,777,510	)			(55,931,821	)
Redemptions of short-term investments			218,709,331				-
Capitalized software development costs and other			(784,349	)			(163,560	)
NET CASH USED IN INVESTING ACTIVITIES			(25,336,865	)			(58,176,386	)
CASH FLOWS (USED IN ) / PROVIDED BY FINANCING ACTIVITIES:
Proceeds from long-term debt, net of issuance costs			37,730,000				-
Repayment of long-term debt			(1,710,000	)			-
Repurchase of common stock			(7,522,426	)			(20,024,258	)
Proceeds from exercise of stock options, net of cash paid for withholding taxes			(277,785	)			1,073,481
NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES			28,219,789				(18,950,777	)
NET DECREASE IN CASH AND CASH EQUIVALENTS			(4,356,229	)			(66,473,085	)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD			18,208,685				84,681,770
CASH AND CASH EQUIVALENTS - END OF PERIOD		$	13,852,456			$	18,208,685
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest		$	1,212,619			$	-
ROU assets obtained in exchange for lease obligations		$	459,580			$	-
Reduction of EvinceMed purchase price for amounts previously paid		$	-			$	708,334
Shares issued in connection with acquisition		$	12,091,142			$	9,374,455
Cash paid for income taxes		$	48,222			$	-

OPTIMIZERx CORPORATION

RECONCILIATION of NON-GAAP to GAAP FINANCIAL MEASURES

		For the Three Months Ended December 31,			For the Twelve Months Ended December 31,
		2023			2022			2023			2022
Net (Loss) Income		$	(4,141,406	)		$	(325,836	)		$	(17,565,866	)		$	(11,438,440	)
Valuation Allowance reversal			(7,695,374	)			-				(7,695,374	)			-
Depreciation and amortization			1,006,227				456,545				2,401,627				2,022,029
Stock-based compensation			2,627,480				4,269,160				13,717,333				15,745,822
Asset impairment charges			6,737,580				-				6,737,580				-
Loss on disposal of business			2,142,319				-				2,142,319				-
Severance charges			288,204				-				494,681				-
Other income			(500,001	)			-				(500,001	)			-
Amortization of debt issuance costs			210,737				-				210,737				-
Acquisition expense			3,901,606				-				4,482,297				19,739
Non-GAAP net income			4,577,372				4,399,869				4,425,333				6,349,150
Non-GAAP net income per share
Diluted		$	0.26			$	0.25			$	0.26			$	0.35
Weighted average shares outstanding:
Diluted			17,789,235				17,285,777				17,191,300				18,048,477

		For the Three Months Ended December 31,			For the Twelve Months Ended December 31,
		2023			2022			2023			2022
Net (Loss) Income		$	(4,141,406	)		$	(325,836	)		$	(17,565,866	)		$	(11,438,440	)
Depreciation and amortization			1,006,227				456,545				2,401,627				2,022,029
Stock-based compensation			2,627,480				4,269,160				13,717,333				15,745,822
Asset impairment charges			6,737,580				-				6,737,580				-
Loss on disposal of business			2,142,319				-				2,142,319				-
Severance charges			288,204				-				494,681				-
Acquisition expense			3,901,606				-				4,482,297				19,739
Other income			(500,001	)			-				(500,001	)			-
Net interest (income) expense			1,336,155				(538,511	)			(737,926	)			(852,298	)
Income tax benefit			(7,597,922	)			-				(7,597,922	)			-
Adjusted EBITDA			5,800,242				3,861,358				3,574,122				5,496,852

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