Q4 2021 OPTIMIZERx Corp Earnings Call
Good afternoon, and thank you for joining optimize our exit fourth quarter fiscal 2021 earnings discussion with US today is the chief Executive officer of optimize Rx William table. He was joined by company Chief Financial Officer, Ed Stelmach, Chief Commercial Officer Stephen.
So that's from executive Vice President of Finance and accounting, Doug Baker General Counsel, and Chief compliance Officer, Marianne on sport and senior Vice President of corporate Finance Andrew to silver.
At the conclusion of today's earnings call I will provide some important cautions regarding the forward looking statements made by management during today's call.
We'd like to remind everyone that today's call is being recorded and will be made available for replay via webcast. Only instructions are included in today's press release in the investors section of the company's website.
Now I'd like to turn the call over to optimize our ex CEO William table. Sir. Please go ahead.
Thank you operator, hi, everyone I want to begin by thanking all of you for joining us today, while the last 12 months have been an exciting period of operational and commercial growth.
For optimize Rx.
Even more excited for the year ahead as we move forward with continued momentum as a company.
The investments we've made over the last year has centered around setting up the organization for future scalable growth.
We've completed the strategic build out of optimizer exits leadership team.
On the solutions in digital enablement front, we launched several AI and data centric solutions, expanding our strategic capabilities.
Joining us well to focus more on the key markets, including specialty medications and lastly, we made huge progress in building out additional reach to doctors and patients in essence, we've invested in our three primary growth drivers to continue our organic growth trajectory.
To illustrate this point and how we build customer stickiness as a technology partner to life Sciences. Early this week, we announced the launch of a large scale therapy initiation program with a top 10 pharma clients.
The program accelerates patients' access to a new specialty drugs that can reduce inflammation for a chronic condition and significantly improve the quality of life for this previously underserved patient population.
Pharma client is leveraging optimize our <unk> suite of digital solutions to streamline therapy initiation for these patients by ensuring that physicians have immediate electronic access to the appropriate enrollment forms needed to prescribe the medication.
This is our largest enterprise scale therapy initiation program launch to date.
As a new specialty therapies continue entering a crowded market with complex requirements and sometimes limited pharmacy distribution networks Optimizer AXT is well positioned to help life sciences get patients on therapy quickly and more efficiently.
We are very confident in our suite of solutions and we continue to receive overwhelmingly positive client feedback.
2021 was the last year that enterprise deals remains a measure of our success in the proxy for execution as an organization. We feel that we have surpassed this metric both at deal count as well as in the overall demand for bundled solution sets.
We have put forward a new set of performance metrics against which to measure our success.
Ed and Andy's leadership have been key as they hit the ground running since joining our team.
And led the development of relevant key performance indicators kpis.
Best represent our land and expand strategy within key customer accounts.
As the proxy for execution the Kpis that we introduced in advance of this call include the company's penetration within the top 20 largest pharmaceutical manufacturers.
Net revenue retention and revenue per employee, which Ed will go into more detail later.
From a customer capture perspective, we now serve nearly all of the top 20 large pharma manufacturers, who represent the largest portion of the industry's marketing spend.
Our kpis are important from this perspective as the pharmaceutical industry is dominated by large companies with multiple brands. So our revenue is naturally going to be concentrated within these larger entities. For example, more than three quarters of our net revenue for last year was generated through these industry bellwethers as we deepened our.
<unk> shipped with large pharma and their brands.
We're also starting to generate more revenue per employee, which is a testament to our operational efficiency and ability to scale.
And to give you an idea of the market opportunity our footprint in the top 20 pharma is positioning us to compete and win our share of the largest categories of addressable commercial spend which in turn will be communicated in a transparent and measurable fashion.
This focus on penetration and capturing a large share of wallet within pharma is going to be a strategic imperative for 2022.
And a core to our ability to grow revenues, while meeting or exceeding our financial targets.
As a baseline we believe that our total addressable market.
For digital enabled solution is in the billions of dollars based on that we estimate that we captured less than 5% of this rapidly emerging market, making us confident our growth will continue.
This year, we've been even more focused on helping life science companies leveraged the power and reach of our platform technology.
We are helping them bring therapeutic awareness to both patients and providers and just as importantly, assisting patients to start and stay.
On life impacting therapies.
As a health care technology company, we are thrilled at the opportunity to positively affect therapeutic outcomes through the application of modern data practices and AI driven solutions throughout the patient journey at the point of care.
In that spirit. The fact is that there is a vast industry white space standing before us that is yet to be chartered.
As we progress through 2022, we will continue leveraging our team's domain expertise and our capabilities as a leading health technology company, enabling engagement between life science organizations health care providers and patients during critical junctures throughout the patient journey.
What this translates to is doing a great job on behalf of our clients digitally bridging the gap between life science organizations patients and providers all while staying in strict compliance of all regulatory requirements.
Like many other industries health care is undergoing a digital evolution striving to adapt to the constant pressure of Digitization and.
The prevailing use of mobile and digital devices and other technologies, we are facilitating the digital evolution for life science organizations.
Being the technology solutions that our clients require to move forward in this arena so that they won't have to go it alone.
Evolution is one of the reasons, we view our platform adoption is still very early on the S curve. Despite the strong growth we've been able to demonstrate since our rebounding in 2016.
Our product demand and brand penetration it will also rising among our customers as they see the value of the platform's ability to meet their digital engagement needs. The fact that our enterprise engagements provide a precise measurable return on investment.
Against their marketing spend is key this performance measurement will continue to be a key theme for the remainder of 2022 before we talk about this further I just wanted to mention again that we have spent the last several years configuring our platform for scalability.
Including establishing a technology center of excellence in Croatia.
As scalability can be a major impediment for growth we made the decision to take care of this early on so we are now able to focus our attention solely on efficient and rapid market expansion and the growing digitization of the healthcare industry at large.
In 2021, we brought together a terrific group of data scientists to help with the Buildout of our innovative digital solutions that set of solutions. Now includes a full suite focused specifically on the deployment of AI artificial intelligence and data analytics lives at the point of care to provide.
With real time information and support while they're making critical treatment decisions with their patients providing.
Providing key information in real time at the point of care can help get a patient initiated on therapy a lot sooner.
This capabilities unbelievably valuable to life science companies, particularly those specialty brands, where early intervention can be the deciding factor in whether a patient will have a positive therapeutic outcomes.
Financially as noted in our press release, we had yet another record year.
Revenues grew 42% year over year to $61 3 billion.
Our business is really fitting example of the whole being greater than the sum of its parts.
Our solutions span the entire patient journey, beginning at the initial point of care to drive better engagement and revenue growth.
We do this through a single platform approach delivering everything from physician and pharma sales engagement to personalized patient support in order to improve therapeutic outcomes.
Like with many industries right now the data tools.
We are deploying have only started to come into the fold of mainstream customer digital engagement in the last several years.
In terms of our new set of Kpis and outlook and given our position in the market. We're really excited to take this meaningful step. We're looking forward to another strong year of growth, while helping patients start and stay on life improving therapies.
Finally, before we go through our financial review with Ed I want to remind everyone on the call that even with our focus on growth and being in the early innings from market penetration standpoint, we generated positive cash flow from operations in 2021, and lastly, while not an official API our clients remain extremely.
Really pleased as we are delivering an average ROI of 13 to one.
And as another reporting quarters, some clients are experiencing much higher rois.
With that I'd like to turn the call over to our CFO and COO, Ed Stelmach, who will walk us through the financial details for Q4.
Thanks will and good afternoon, everyone.
As with all our calls a press release was issued with the results for our fourth quarter ended December 31 2021.
Copies are available for viewing and may be downloaded from the Investor Relations section of our website.
Additional information can be obtained.
Our forthcoming 10-K, which will be filed in the coming days.
Turning to our financial results for the fourth quarter ended December 31.
2021.
Our reported revenue for the period was $23 million in.
An increase of 24% over the $16 $4 million from the same period in 2020.
The increased revenue resulted from growth in sales across our access adherence and affordability solutions.
Gross margin for the quarter increased from 52% in a year ago period to 61%.
Current reporting period.
The gross margin increase is the result of solution and channel partner mix.
As we highlighted in our earnings release, we expect our gross margin to remain relatively constant in the 57% to 60% range for the full year 2022.
Operating expenses increased to approximately $11 8 million in the fourth quarter of fiscal year 2021.
As compared to approximately $7 $2 million in the same year ago period.
The increase in operating expenses was primarily related to salaries wages and benefits and other human related costs as we invested in the expansion of our team.
Fortunately for growth by expanding our promotional activities and enhancing and growing our solutions offerings.
We delivered net income of $623000.
In the fourth quarter of fiscal 'twenty, one as compared to a net income of approximately $1 $4 million during the same period in 2020.
For further details you can refer to our MD&A section of our upcoming 10-K.
On a non-GAAP basis net income for the fourth quarter of 2021.
Proximity of $4 million or.
For 'twenty and.
And 22 cents per basic and fully diluted share respectively.
As compared to non-GAAP net income of approximately $2 $7 million.
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Fixed intense when the basic and fully diluted basis in the same year both period.
Now turning to our balance sheet.
Gasoline cash equivalents totaled $84 $7 million as of December 31, 2021.
Compared to $85 1 million as of September 32021.
In terms of our revenue outlook for the full year 2022.
Company expects net revenues of $80 million to $85 million, representing year over year growth of 31% to 39%.
Separately.
This wraps up the discussion of our financial results for 2021.
Before I turn the call back to will I also wanted to briefly talk about the Kpis that we introduced on February 15 2022.
We get that a lot of positive feedback from many of our investors regarding increased transparency as well as quantifiable metrics that can be used to continue to communicate our story as our business grows and matures.
Our average revenue per top 20 pharmaceutical manufacturers.
Year on year.
30% to $2 $5 million in 2021.
As we supported additional brands and our extended stay business that continues to gain ground with now 19 without 20 largest pharma companies in the world.
Which represents the bulk of the industries commercial spend.
In addition, our ability to create tangible value for our clients as well as growing demand for solution sets.
Correct within the high net revenue retention rate of 127% in.
<unk> 2021.
And last but certainly Matthews our.
Our operating model continues to demonstrate significant capability for leverage able growth with.
With revenues per FTE at $730000 in 2021, and almost 20% year over year improvement.
Our plan is to continue to report these kpis on a regular basis throughout the year.
To ensure open and transparent communication with our shareholders.
And with that I'd like to turn the call back over to will.
Will.
Thanks, Ed on behalf of the team at optimize Rx I want to thank everyone for joining us on the call today the industry tail winds that are driving the evolution and reinvention of how technology is getting broadly applied in the healthcare industry are going to remain a big part of our success for years to come.
We've assembled an incredible team in order to help with our execution and we have a solid strategic roadmap in play for 2022 and beyond.
So far as execution and Kpis go we believe that we have set a pace of achievement that is not only obtainable, but meaningful fee transparency for our investors to track in the days ahead.
It continues to be an honor to be at the helm of the optimize Rx company, which to date has been a wonderful blend of financial performance centered around improved patient care delivery.
Looking forward to the next call and a wonderful 2022. Thank you.
Operator.
Thank you.
If you would like to ask a question. Please signal by pressing star one on your telephone keypad and if you are using speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again press star one to ask a question.
And we'll pause just a moment so that everyone has an opportunity to signal for questions.
Yeah.
And we will go to our first question from Ryan Daniels of William Blair.
Congrats on the strong end to the year and thanks for all the additional Kpis I'll add my kudos or <unk>.
Visibility so we appreciate that.
A couple of questions in regards to some of the metrics you frequently disclose that werent in the press release can you update us on the current status of the pipeline and things like close rates and maybe average contract value that you saw in your enterprise deals and the most recent quarter.
Hey, Ryan Thanks, Yes, we are.
We're really taking the direction of sticking to the kpis, but so not specific numbers, but pipeline remain incredibly strong.
Time of year, where it is it is still building, but a lot is closing and.
So still feel good about all our all the data we shared before but we really want to focus in on these new kpis by revenue by manufacturer and.
An employee net.
Net revenue retention.
I will say that we.
Given the team we enhanced given the relationships we have just that visibility.
We get obviously made us feel confident enough back.
Backed by pipeline historical close rates and all that good stuff to give guidance for the year. So we're really excited about that and.
We look forward to tracking against that really well.
That's fair enough and then just a couple of more bigger picture questions. As you move more towards enterprise level contracts and AI driven solutions real world evidence is there a need to.
Develop any areas of your technology more or look to M&A activity to fill any gaps or just any any thoughts about.
How the offering might develop going forward given the needs in your client base.
Yes.
Heard it in our comments our prepared remarks.
Really did a lot of investing over the last few years to a point, where we can layer in solutions at a fraction of the cost get really immediate ROI just because of the access we have to the clients.
So no need for extreme investment going forward, it's really about focusing on our growth drivers, which is the land and expand within the client keep that net revenue retention solid.
It's also about just continuing to get additional reach.
<unk> had some really good progress over the last 12 months.
And anticipate being able to reach other channels as well wherever doctors and patients are.
And then as you said.
New solutions.
It really makes the relationship really I think we are proud of all of it but the layering in of additional solutions through a time, where.
Teammates are not together, it's all virtual.
We really spent.
A lot of time, innovating and rolling it out and getting to commercial success pretty quickly. So.
I would anticipate.
It will always be an innovator in the space and feel like we by focusing on that patient journey for our clients we've been able to.
Innovate and leverage and get to get to market very quickly.
Steve do you want to add anything to that.
I think that was great Hey, Brian how are you doing it's good to hear your voice I would just add one more thing which is diversification of therapeutic areas in specialties as we expand our reach to physicians and Ron I think you and I have talked about that before but.
Part of our focus on the channels <unk> been reaching more specialists, whether its oncologists dermatologists et cetera. When we succeeded in that largely cycled that also supports this edition of the AI and real World evidence efforts that we've had is we're looking for sort of.
More difficult patients to find harder.
Harvest positions to support because of the complexity of the diagnosis of the patients.
Okay. Good.
Good stuff going on there.
That makes a lot of sense and then.
Given your ability to work with.
Providers to give patients an appropriate therapy quicker, which I know is a big burden for them a lot of times, especially with prior authorization, which can impact clinical outcomes, because they might not get patients on quick enough I am curious if there is an opportunity for you also to work with healthcare payers.
Or at risk provider groups to help enable that more rapidly because it should drive cost savings for the system longer term by getting these patients on medications, especially specialty medications on a more rapid basis.
Yes, Ryan. Thanks, So we really made a decision to stay focused on our clients, which is which are the manufacturers.
But you can see why this platform is so attractive right. What we built our our rails right rails into the point of care today, we use that 100% for the manufacturers to reach physicians and patients for all the reasons people know, but mostly focus on access affordability.
<unk>.
But if you're an investor listening to this it's important to note that that is valuable to multiple other industries.
But the team we have now is really 100% focused on the pharmaceutical manufacturers.
And as we mature we will assess those other segments.
Okay, Great fair enough I'll hop in the queue. Thanks again, guys I appreciate it.
Thanks, Brian .
And we'll go next to Sean Dodge of RBC capital markets.
Yes, Thanks, Todd and.
Good afternoon, and I'll add my congratulations on the progress.
This past year.
I guess, where I wanted to just maybe thinking about the EBITDA trajectory.
Talked about doing the work to build an infrastructure that's at scale.
Did some investing you kind of ramped investing in latter part of last year that pretty much done now or is there still some head count you think you need to add.
Here in near term and I'm, just trying to understand.
How much of this incremental revenue you are guiding to we should be expecting a drop through to EBITDA.
Yeah, Great question. Thanks, John .
So, yes, we win and heavy last year.
I will say just a reminder of last year that was all organic growth with investing for growth forward. Okay sorry.
I think when people dissect Q4, theyre going to be pretty encouraged by what we can do as a company and I think they should expect it going forward we are.
We're proud that we're a technology company, we're proud of our new API around revenue per.
Her team member.
And we really want to stay there and we feel like we can and if you think about our client set.
They are digesting. This this massive shift in sort of methodology around commercialization.
To incorporate more digital.
They are looking for partners, who can take and scale and not have to.
And do it at speed.
And I think we meet all of those criteria that we are compliant.
Be transparent.
And we're nowhere near add capacity against our network.
Either by solution or by reach so.
Lots of lots of room ahead on that I think you can expect.
Limited investment, although I will caveat all of this.
We're still an early stage public company with a lot of opportunity and I think we've built the credibility of that when we want to invest.
It usually pays off for everybody.
Okay, great and maybe on the opportunity you've talked before about.
The ROI your solutions are generating right now I think you said in the prepared remarks 13 to one is where you are at currently.
And then the pricing power that should afford you.
Some point how far away do you think we are from.
You've been able to get more aggressive with pricing and then maybe what are your thoughts around.
Are you actually.
Operationalize that how you actually do that.
Yeah, I'll start and then I'll ask Steve to kick in.
But.
Our clients are very sophisticated and procurement.
Not like it's a resident and you can just increase it a percent or two these are these are technologies and <unk>.
Digital services that are new.
And what you really need to do is prove your value with your ROI and then keep adding value right. Just because you were great last year doesn't mean.
You just do the same thing over and over you have to continue to innovate and add value. So our goal.
As we saw with adding our WD to what was a preexisting type of message is we could bring that at a higher value to the client and therefore, it's not deemed a price increase it's just an additional service. So we're really focused on that how do you innovate and get away from a transaction menthol.
<unk> reached a lot of.
I think the market has.
Want to stay more on that high value high touch.
High ROI, but Steve maybe you can chip in a little there.
I think you nailed it.
In addition to that Shawn I think.
As we as we continue to migrate into that specialty area and looking at harder to find patients and trying to trying to access those and communicate with those physicians that are treating those cohorts of patients the value volume discussion comes into play.
So where volume of patients maybe lower the capture rate is much more valuable and so we've got additional pricing power in those areas.
That one two punch of commercialization of new technologies that allow us some margin expansion in that regard and looking for very hard to find patients that now the technology stack that we built that underpins all of these efforts.
Gives us the luxury of being able to say hey, we can find patients and the health care deserts Midwest. We can we can plan. The physicians that are treating and we communicated relevant points of time when the patient is with the with the physician.
Okay. That's.
That's helpful. Thanks again.
Yeah.
Thanks Chuck.
And we'll move to our next question from Mark Weisenberg of B Riley Securities.
Thank you good afternoon, I'm wondering if you could talk about the buy up activity in the fourth quarter relative to the fourth quarter of 2020, and you get a sense going forward that the 2020 was an anomaly in this past fourth quarter will be more representative.
Future period.
And then also given that we understand your contracts are usually structured on an annual basis.
What percentage of your customers last year made intra year changes to contracts, either up or down and I guess as your offerings evolve is that something we should expect to see move around more.
Hey, Mark good question so.
I believe well, we talked about this a little bit back.
Back at the Q3 call, but obviously going into 2020, our clients had no idea what was comment right. So you had massive disruption spend and therefore outsized potential buy up probably probably unprecedented.
Bye.
For Q4 of 2020 coming into 'twenty, one they knew the disruption and assumed it would be all year just given.
Given that we are in the health care space.
We are closely monitoring hospitals and patients and doctors so.
Yes, I would say that was the main reason.
And frankly, we don't we don't budget or plan around buy up some said that to.
A couple of times.
It can happen if it does.
If you're a company like ours, you can execute on those buyout dollars.
That being said, we obviously saw that net revenue retention grow we saw really steady climb through the year end.
We anticipate that in 'twenty, two as well but.
But I do think the digital shift makes the spend more efficient.
They really do get more for their money.
I'd like to maybe have Ed comment a little bit on that because he came over from one of our.
One of the pharmaceutical companies just from his perspective, but I would see it just smoothing out over time, just because of the efficiency around digital spend.
Yes, Thanks will.
Thanks for the question just kind of round off with what we're seeing.
Q4 of 2020, our buy apps amount it probably to about $4 billion and we certainly saw that drop quite a bit in Q4 of this year.
Back to what Bill said.
I think pharma companies were much better prepared for.
In front of them in 2021.
As far as what that means for 'twenty, two and beyond I think this new model is really now starting to solidify itself as the new normal.
Kind of a hybrid model using digital and using technologies.
To supplement the <unk>.
Traditional amount of sales force engagement with UBS.
It seems to be sort of.
The new normal.
And that's basically what we're bidding on.
Hopefully that helps you.
It does I appreciate it but if you could also just.
Specifically touch on kind of the intra year changes to contracts.
Is that something that maybe could.
Flex up based on the efficiency and speed and how digital can can be allocated.
Yes.
Obviously, we saw a big increase in <unk>.
Brand count last year, which was people, we maybe haven't worked with before coming into testing and as we've said our client as they.
Trust, but verify and build the relationship there not an all in kind of entrants so.
We do see.
Six months contracts, we see 12 month contracts.
Really it depends on the ROI, that's going to be driving whether there is an increased inter year I cant give you percentages of a breakdown on mid year versus 12, but obviously, our net revenue retention speaks to the growth within our current client base, So and I would I would.
Expect we would anticipate that to continue as a matter of fact, there might be a chance for upside given so many people came into the platform last year and a lot of that measurement is now happened so.
I'm pretty encouraged by by the last year momentum into this year, thus far.
Very helpful. I know that you are providing total.
But could you talk about that for your top five and top 10 customers.
Sure Ed do you want to cover that one.
Yes, sure, yes, so as you know I'm sure Marc.
Large pharma companies have lots of affiliates so the way we look at.
<unk>.
In our case is to really hone in on.
The parent company is if you look at the top five but the guarantee level.
That's 127% number that you saw for the total top 20 becomes about 142.
And if you spend it out too.
Plus affiliate where in the 160 <unk>.
But our plan is to really stay consistent too.
The parent company level is just basically on an apples to apples basis going forward.
Understood.
Can you talk about or quantify I guess the percent of revenue that comes directly from pharma relationships versus through agencies and I guess as your engagement with the <unk>.
Direct pharma kind of.
Increases moves up the food chain do you have a sense of how much your customers current digital marketing spend is allocated towards <unk>.
Point of care initiatives, and I guess, maybe ultimately where that percentage could move over time.
Steve you want to start with that one.
Yes happy to.
It's a fantastic question in terms of what the percentages.
The actual budget, that's moving towards digital I think it's a little bit of a moving target I mean, you've seen several announcements throughout the last sort of quarter of last year and even the first quarter of this year.
By large manufacturers that are scaling back on.
Post the phase commercial resources are salespeople that are in the office.
And some of those dollars a lot of those dollars are being redeployed repositioned into digital and digital ways. A good portion of that is point of care I think that will continue to be the case, because you need to be able to communicate with a physician with a prescribing decision is being contemplated.
Still early to tell how much of it will be deployed against point of care, but I would say, it's probably a good portion of it so.
Sort of more to come on that.
Yes.
Just to add I can chip in on the.
Question or of agency versus direct.
Mark as you've heard from others, who sell to pharma.
Pharma relies pretty heavily on agencies for a couple of things. One is just screening new entrants with really great solutions that just haven't proven themselves yet.
They also do a lot of the content generation, which we do not do any of.
And so they really act as a service or consulting businesses to the pharma so.
It doesn't matter, if you have a direct or indirect.
You absolutely we will deal with agencies if you are.
Doing anything on marketing.
Side of pharma that being said what we've found.
Since last year, and clearly a top down lean into digital enablement to reach doctors and patients.
There's just a higher level of involvement which generally means you'll get more direct relationships and.
You have to remember the optimizer X is not a website.
Not a place doctors have to go to.
It's where they work it's their day to day six hours, a day and and so it's a it's a business in and I think you just get a different level of seriousness from the client when it's that way now that that's good and bad good in that it is serious and you get more exposure.
That just takes a little longer to make sure everyone's okay with it because it's so serious and so I would say, we will trend towards more direct relationships, but we will always work with the agencies just like partners because they are essential to the ecosphere.
Very helpful color there and then just the final question from me I think it's been long understood that certain EHR platforms have different interoperability standards relative to others and with the recent Oracle Cerner deal.
How do you expect the policies to change if at all and what impact could that have on your business in the near and medium term. Thank you.
Sure. Thanks Mark.
That is a big question.
And we are not an EHR, so probably not the best qualified to opine on it but I would say.
If I think of it from the doctors patients perspective, you've got a lot of pressure.
On having a good user interface today.
And I think the companies that employ the tools with doctors and patients want in a digital way.
Where it's not painful to look at.
And it doesn't take too many clicks or all this user interface, where we're getting used to I think those are going to be real winners.
What happens with the Cerner Oracle that's hard for me to know, but I do think it's positive I think it puts puts more tech energy into the ecosystem.
And I do think consumerism is going to drive the need to have access to.
Everything all your data whenever you want it so we shall see.
Great. Thank you very much.
Thanks Mark.
I'll move onto our next question from Eric <unk> of Lake Street.
Hey, guys.
Question really wanted to focus a couple of questions on the profitability of the business I know you didn't give guidance for adjusted EBITDA, but you kind of look.
Lean that way a little bit in one of your prior responses will talking about the profitability of Q4 and I believe that that's repeatable my mind immediately goes into something simple like Q4 $20 million revenue $4 million adjusted EBITDA.
Guidance for $80 million for this year, 20% EBITDA margins on that is that an over simplification.
Is that.
Is that what you were implying by the comment regarding Q4 profitability.
And so I Love you, Eric you hold us accountable actually it goes back further if you Eric <unk> been with US a long time.
The first analyst to cover on Us I'll call out so.
You remember, Eric when we were talking and trying to tell everyone about our story the aspirational.
$100 million run rate with 25% to 35% EBITDA.
That hasnt changed and I think we're just building more and more credibility towards right. So.
The reason why we don't include such granular guidance is because we also are early stage and I know the investors Trust us to invest if we see we need to and.
And we get that back, but now I still feel very good about our profile its very important.
It's interesting obviously the market is valuing it very highly right now and we.
We've always valued at Haile so.
Having those two come together is going to be I think good for us as a company.
Okay.
And I realize the danger of getting into the guidance game is you give a mouse a cookie they want a glass of milk.
Certainly I appreciate the transparency here.
As we look out to.
As we look at the cash on the balance sheet and I'm setting aside kind of opportunistic M&A, but what is the thinking on where that cash is by year end would you go down a path of.
Potentially using it for share repurchases would you double up on product investment again aside from opportunistic M&A.
Yes.
Really ruled out we're not at the stage of buying back equity I don't think our investors want to do that they want us to invest.
If you could talk about a big Tam and a lot of white space that means you keep investing forward.
Maybe we'll get there someday, but.
We actually last year set out a pretty aggressive plan to invest in ourselves for this year, particularly with our channel partners were.
Part of the.
It's part of what the pandemic did for physicians and patients just enabled them digitally to look at tools to your physician run in your practice.
Deliver care and if you're a patient just everything from savings to adherence to telehealth and.
We're really going to work hard with our partners to make sure all of our tools get to every doctor and.
And so that's where we would be investing if we do obviously M&A is as you said it's opportunistic.
And that is that more of a people or is that more of an incentive.
Valor.
Yes, no it's more tech and incentive.
Got you okay.
Okay.
Taking my questions.
Thanks, Eric.
We will go to our next question from Harvey Coppola pop Tech capital LLP.
Yes.
Well another sensational quarter.
I sound like a broken record.
Very positive broken record I'd like to keep sounding like that.
The question I have is to focus on.
The channels channel of delivery is primarily through EHR as it always has been.
I.
I don't hear too much mentioned you did answer one of the questions about Oracle.
Acquisition sooner, but.
But when you talk about the.
AHRI and specialty.
Are you at.
At all constrained as you move into these specialties I know some of them are very fragmented with a lot of tiny tiny ehr's and no dominant ehr's do you run into that as a gating factor in your ability to generate more revenue, even if you have the brands and the farmer and everything else.
Yes, Thanks, Harvey keeps a record broken it's good.
So we have about two years ago, we really set out as our initiative to increase our access to the <unk>. So as we've said, mostly oncology and cardiology.
Really happy to report we've.
Increased both by extra manageable amount and to your point they are fragmented, but there are ways to get to them.
And I can tell you we figured it out and we do it in a way that's incredibly smooth to the to the HCP and.
So no we do not have any bottlenecks in any therapeutic areas today.
And.
We do still anticipate half of our attention to be focused on those specialty medications.
We had the biggest increase last year was just access to oncology sensational the team did a great job.
I want to call them out because that's material for this company.
So to date.
No no bottlenecks.
Great. That's it for me Thanks, a lot.
Thanks Ari.
And with no other questions in the queue I will now turn the call back to will Slabaugh for final comments.
Terrific. Thank you Hey, we're really proud of the quarter.
Questions were terrific, we look forward to talking to the investors over the next couple of weeks really focusing in on the Kpis. What we've found so far is having those kpis really allows us to talk more about the business then the numbers because we've given guidance for the year, so hats off to the team for being able to do.
It and have that kind of visibility with our clients.
<unk>.
Culture is a big deal at optimize Rx and.
We continue to just create a great place to work.
A lot of value to the clients and ultimately the investors. So thanks, everyone for your time and we look forward to talking to you again next quarter.
Alright, Thank you, Sir and before we conclude today's call I'd like to provide the company's safe Harbor statement that includes important cautions regarding forward looking statements made during today's call statements made by management. During today's call may contain forward looking statements within the definition of section 27 eight.
And the Securities Act of 1933 and section 21 E. At the Securities Act of 934 as amended.
These forward looking statements should not be used to make investment decisions. The words anticipate estimate expect possible and seeking and similar expressions identify forward looking statements may speak only to the date such statements are made such forward looking statements. In this call will include statements regarding estimation of total addressable market size market penetration.
<unk> revenue growth gross margin operating expenses profitability cash flow technology.
<unk> growth opportunities acquisitions upcoming announcements and the need for raising additional capital.
They also include the management's expectations for the rest of the year and adoption of the company's digital health platform. The company undertakes no obligation to publicly update or revise any forward looking statements, whether because of new information future events or otherwise.
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 and contemplated by or underlying these forward looking statements the risks and uncertainties, which forward looking statements are subject to include but are not limited to the effects of government regulation competition and other material.
Risks and uncertainties to which forward looking statements are subject to could affect business and financial results are included in the company's annual report on Form 10-Q for the quarter ended March 31, 2021. This form is available on the company's website and on the SEC website at SEC <unk>.
Okay.
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Yes.
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