Q3 2022 OPTIMIZERx Corp Earnings Call
Okay.
Good afternoon, everyone and thank you for joining optimize our axis third quarter Chris.
Fiscal 2022 earnings discussion.
With us today is the chief Executive officer of optimize Rx will several.
He is joined by company, Chief financial and operating Officer.
Mark.
Chief commercial officer, Steve for restaurants.
General Counsel and Chief compliance Officer Mary <unk>.
And senior Vice President of corporate Finance, Andrew This 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.
I would like to remind everyone that today's call is being recorded and will be made available for replay via webcast.
Instructions are included in today's press release.
And in the investors section of the company's website.
Now with that I'd like to turn the call over to optimize Rx CEO .
William Farber.
Sir Please go ahead.
Thank you operator, good afternoon, everyone and thank you for joining our third quarter fiscal 2022 earnings call.
Third quarter results were in line with our expectations and as a result, we are maintaining our guidance for the year.
We are optimistic that the macro headwinds outlined on our last call. We will begin to subside in 2023 and are seeing several positive signs for example, the bandwidth issues at the FDA, which impacted novel new drug approvals. This year appear to be improving with the majority of vacant positions having been backfill in the ft.
Increasing the rate of approvals over the last two months.
Furthermore, while the great resignation increased average employee turnover across the life science industry, which resulted in substantial changes with key decision makers the rate of turnover appears to be slowing and should eventually return to normalized levels.
Finally, you mentioned longer sales cycles tied to our shift towards participating in larger more complex programs with our pharma clients.
As a reminder, these AI enabled real world evidence deals represent multi million dollar per brand opportunities and offer <unk> significant scalability.
The closing of these deals naturally takes longer to complete given the increased number of stakeholders involved at the customer level.
These factors, we are seeing significant momentum after mid year trough and we believe should materially benefit the company in 2023.
For example, we recently won two new real World evidence contracts with top 20 pharma clients during the fourth quarter and have multibillion dollar annual contract values. In addition, we renewed one of the first two are WB contracts, we launched in 2021 and.
And that client expanded its scope to an additional indication and is interested in further expanding across multiple oncology brands.
We are in late stage discussions to renew the second RWD contracts from last year and also have numerous additional opportunities in our pipeline with multimillion dollar atvs.
We are confident that we are gaining traction with this very important growth driver and believe it aligns extremely well with the digital trends across the life Sciences industry.
With pharma manufacturers moving a greater percentage of their commercial spend toward Omnichannel digital solutions, while looking for those solutions to deliver more impactful results.
Not only identifying patients known to Hcp's, but also pinpointing new patients to the therapy.
We believe smarter solutions, such as optimize our exits our WD will capture the lion's share of the pharma spend particularly with legacy commercial dollars that are reallocated to digital.
With that said, we expect we will have at least six rwd's deals running during the first half of 2023 with many more in the Hopper and believe just executing on the <unk> opportunity. We have in front of us today would position us to grow our top line by over 20% through 2023.
Meanwhile, on the product side, we continue to drive significant value creation on behalf of our customers, helping them increase the ROI is seen by their commercial teams by providing unique physician and consumer platforms and strategies will help patients afford adhere to their treatment regimens with.
We recently highlighted one of those implementations with a top 20 pharma customer.
The analysis detailed the success of our real world evidence solution and identifying hcp's with patients at risk of non adherence due to an unexpected costs.
<unk> solution was a key in assisting doctors and patients navigating coverage gaps.
Through the application of machine learning and artificial intelligence to real World data, our WEX solution was able to accurately predict hcp's with at risk patients in real time.
And the results speak for themselves as the program drove more than 200% growth over the manufacturers initial number of hcp's identified with at risk patients.
Over 46000 incremental scripts, among hcp's, receiving affordability information and financial resources for their patients.
And more than six to one ROI on the manufacturers investment in the program.
While 27% of the Hcp's identified and targeted for the affordability information program enrolled the patient for the first time.
In a different case study for another top 20 manufacturer, which analyzed results over a 12 month period, we demonstrated the effectiveness of our <unk> solution and identifying patients that require specialty therapy within a very narrow timeframe from diagnosis.
With our proprietary technology, we are able to collect sort it makes sense of information to directly identify providers, who would likely have a patient suitable for this therapy and notify those providers of those patients in a timely and efficient way.
We delivered extraordinary results for our manufacturing partner, while reducing the complexity and the care delivery system for health care providers and their patients.
Results included a 28% increase in patients commencing the therapy for healthcare provider with 33% of the new patients from the targeted hcp's, having been identified by the model.
Meanwhile, we continue to strengthen our channel network and recently renewed our exclusive partnership with new crop, which is now a subsidiary of therapy brands.
And a leading electronic prescribing service trusted by hundreds of Ehr's nationwide.
New crop offers hep's, a seamless E prescribing experience within the EHR workflow.
Expansion of this alliance showcases our leadership and contextual point of care HCP messaging as we consistently leveraged an increasing number of touch points throughout the patient journey with our best in class platform.
Finally, I would like to reiterate that we continue to be at the Nexus of a significant systemic shift within the life science industry.
A substantial portion of farmer's existing commercial spend is expected to rapidly migrate to sophisticated strong ROI solutions.
And I believe our platform technologies and best in class team are poised to capture significant market share in the coming years that positions us for strong profitable growth.
And with that I'd like to turn the call over to our CFO and COO.
Mark.
Who will walk us through the financial details for Q3 Ed.
Thanks will and good afternoon, everyone.
All of our calls.
Breath or use was issued but theres always some of our third quarter ended September 30.
2022.
A copy is available for viewing and may be downloaded from the Investor Relations section of our website.
Additional information can be obtained through our forthcoming 10-Q.
Which will be filed in the coming days.
Turning to our financial results for the third quarter of 2022.
Our reported revenue for the period was $15 1 million.
A decrease of 6% over the $16 1 million from the same period in 2021.
The decreased revenue was tied to the macro factors.
We will discuss.
We continue to believe are temporary in nature.
Gross margin for the quarter increased from 56, 3% in the year ago period.
62, 4% in the quarter ending September 32022.
Due to a favorable solution and network partner mix.
As we have highlighted in the previous earning calls we have seen an increase in the percentage of activity.
Following through channel with more favorable economics compared to a year ago.
Given our performance in the third quarter of 2022, we are reiterating our guidance, which called for revenue.
Look I mean between 62 and $58 million for the year.
And gross margin between 59% and 52%.
Our operating expenses increased to approximately $13 2 million for the third quarter of 2022.
Compared to approximately $9 million in the same year ago period.
Increase in expense is primarily interest and investment in the expansion of.
To optimize our Rx team to enable future growth, which also includes our April acquisition of event Smith.
Providing more color around our year over year increase in Opex, nearly three quarters of the $4 $1 million total increase.
With banks and non cash expenses with remaining amount gain primarily related to the advancement of positions.
We expect that our cash based opex run rate for the fourth quarter of the year.
To stay relatively consistent with Q3 2022.
And a GAAP net loss of $3 5 million in the third quarter of fiscal 2022.
As compared to net income of point of 4 million during the same period in 2021.
For further details please refer to the MD&A section.
Of our forthcoming.
<unk>.
On a non-GAAP basis net income for the third quarter of 2022.
Approximately $1 3 million or seven per fully diluted share.
non-GAAP net income of approximately $1 6 million.
Nine cents per fully diluted share in the same year ago period.
We also generated $7 9 million in cash flow from operations for the first nine months.
Two and $3 5 million during the third quarter.
Our balance sheet remains strong with cash cash equivalents and short term investments totaling $78 8 million.
Timber is 2022.
Compared to <unk> 4 million as of June 32022.
The sequential decline in our cash cash equivalents and short term investments with types of our buyback.
As a reminder, we announced the $20 million share repurchase program during the second quarter.
And during the third quarter, we have bought back 293000 shares for $12 2 million at an average price of $17 56.
Okay.
In total we have purchased one 1 million shares year to date at an average price of $16 70 per share.
One 5 million remaining for repurchase under the buyback program.
This amounts to a nearly 6% reduction in our shares outstanding.
Which now stands at $17 2 million, which we view as a positive outcome for our shareholders.
We believe our strong balance sheet and cash flow favorably position us to further expand our business solutions offerings and drive profitable growth.
We do not anticipate the need to raise additional capital in the short or long term for operating purposes.
Or to fund our organic growth plans.
We are focused on growing our revenue and partner network. However, as a company in a market that is active with merger and acquisition activity.
We may have opportunities such as for acquisitions or strategic partner relationships with may require additional capital.
We will assess these opportunities as they arise with a view of maximizing shareholder value.
Now I'd like to turn to the company's Kpis there'll be introduced.
February .
To provide 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 staff 20 pharmaceutical manufacturer.
Came in at $2 2 million at the end of the third quarter of 2022 versus $2 5 million in the year ago period.
This is largely due to a delay in the renewal of one of our initial <unk> contracts that we will reference in his prepared remarks.
And the addition of <unk> top 20 manufacturer over the last 12 months, which is still.
They are in their lifecycle with us.
We continue to maintain a meaningful presence with 19 of the top 20 largest pharma companies, which represents the better part of the industry is commercial spend.
Our third quarter of 2022, our net revenue retention came in at 96% the reduction versus the second quarter of 2022.
By this year's slower revenue growth.
Meanwhile, our operating model continues to demonstrate significant.
<unk>.
For leverage of growth with revenue per full time employee at $619000 for the third quarter of 2022.
We continue to stay ahead of the technology industry back average of approximately 500000 per FTE.
Further demonstrating the strength of our operating model.
Okay.
Illustrated the state of our business in an effective interest bearing fashion.
And we plan on continuing to communicate them as a way of keeping our stakeholders informed.
And connected to the underlying trends and dynamics of our business.
This wraps up the discussion of our financial results.
And now I'd like to turn the call back over to will.
Will.
Thank you Ed operator, now, let's move to Q&A.
If you'd like to ask a question. Please press star one on your telephone keypad now.
You will be placed into the queue in the order received.
Please be prepared to ask a question when prompted.
Once again, if you have a question. Please press star one on your telephone keypad now.
And our first question comes from Ryan Daniels.
Your line is open.
Yeah, Hey, guys. Good afternoon. Thanks for taking the questions. This is Jared haase in for Ryan.
Just one from US just curious if you could talk a little bit just how things are going with their channel partners. I think you mentioned a little bit of this during the prepared remarks and potentially seeing that is kind of a driver of gross margin favorability. So just would love to hear any update there as it relates to some of the recent wins and what that means for your overall opportunity and how we should think about that.
And the income statement.
Yeah, Hey, Thanks. Good question, Yes channel is a big piece of our business obviously.
Done a lot of work on this over the years.
I think one of the things I always like to hear from our partners is we're an innovative partner with them we're not just.
Commercial partner and I think if you put the two together you've got real staying power because we all know there's lots of them.
Friction and fragmentation in this market for our clients for doctors and patients. So very focused really starting two years ago.
We're looking at the specialty therapeutic areas because the marketing spend is clearly shifting that way done a great job, reaching the major pockets.
We also realize that as pharma is looking for partners that are market are both technology and strategy. We also are looking outside the EHR.
And looking at what we're calling omni channel and you've seen recent announcements, where we're reaching physicians within various touch points.
Our end goal over the next few years it should be able to get the right information to physicians to help patients anywhere they are digitally.
And that will positively impact the business that will help us grab more budget dollars.
And we will certainly continue to drive improvement in gross margin.
In the short term the mix has really been a combination of new partnerships as well as solution mix.
And that's that's given a great result, but we've got a very solid team on this and directly correlated to our clients' needs.
And just continually focused on innovating with the partners.
Okay.
Okay, Great. That's helpful color and then I guess just a quick follow up just curious how youre thinking about sort of the visibility into the rest of the year, obviously maintain the guidance range and so if I look at the midpoint of the guidance it implies a pretty decent sequential growth rate for fourth quarter.
So just curious if you could talk about kind of your confidence in the remainder of the year and specifically what you're seeing in regards to the typical seasonality around Q4 buyouts.
Yes, Ed do you want to take that.
Yes, sure Hey, Joe Great question.
So I would say if you look at the full year guidance, we gave.
We're probably at about 95% confidence level.
Assuming the midpoint at this point.
So we're not going to comment, particularly on Q4.
You know Q4 does typically have a seasonal ramp up as compared to the previous quarters.
Pretty normal for our business, so roughly speaking 95% confidence at this point.
We have seen I'll, just a little more qualitative color on that as the conversations are terrific I think our differentiator in inside of Q4, which sets us up really nice for 'twenty. Three is this <unk> solution because it's it's something that has proven itself.
A measurement.
Finding additional hcp's patients.
And so we didn't we had that it was really early last year and we had as your debt so having that in the mix, we're seeing it as a great differentiator as ware.
Finishing the quarter, but also building up for 'twenty three.
Awesome, that's great to hear I will go ahead and leave it there and hop back in the queue. Thanks.
Thanks.
And our next question comes from Sean Dodge.
Your line is open.
Yes, Thanks, Todd and good afternoon.
Well on the R. W E offerings.
Two deals signed already in Q4, it sounds like there was another two likely.
Here in the near term.
When we think about contribution from those the original two you mentioned renewing now.
They were very large dollar amounts.
Are these incremental for similarly sized or the smaller bigger I guess, just any any help you can kind of provide there as we think about sizing.
And contribution to.
The 2023.
Yeah sure Yeah. It was I think we said they are all multibillion dollar.
And we view those in six month increments so.
Multi million times too.
The really encouraging thing there is the measurement came out really strong on both of the ones. We won last year.
Obviously, the headwinds got in our way a little bit this year on just keeping one of those flowing through the second half of the year, which obviously, we're seeing the revenue, but the good news is that kicks right back up in January .
They are all up in terms of size of revenue and the new ones, while theyre not quite as big as those others. They are still very significant and when you put the two together.
It certainly helps gross margin given.
Given the architectural fees and such that are part of that solution.
No.
Not giving you a specific range, but they're all significant and what really is helpful. In our shift business away from completely tactical, which obviously gives you less site.
Long term site of revenue is it just stickier and programmatic.
It's really at a much higher level within the client base and so you put all that together and it is going to help us continually get more mature as ed likes to say as a business when we're getting predictability of revenue, but also inside the relationship with the client.
Really it's taken us up many notches.
Okay, Alright, that's great to hear and then.
You previously mentioned non scalable competition entering the market and slowing the sales process or sales processes.
Any update you can share.
That dynamic how the industry is working through it.
Yes, let me, let me toss it over to Steve <unk> in the frontline there and then I can fill.
Operator.
Yes, Thanks, Paul Hey, Sean Thanks for the question.
Yes, I mean in the.
Really in the second half of the year, we seen last year beginning of this year, we've seen several smaller kind of adjacent competitors coming in with small pieces of networks.
Really limited reach but over promising what's encouraging is that we are now in the second half of this year all of those impact analyses are coming due and so we are seeing an influx of clients basically coming back, saying, Hey, we ran a program with filling the blank did not deliver what we anticipated and what they promised us.
We'd like to flip it back to you guys just flip it over to you guys.
<unk> program, so more activity around that but basically all of those smaller over promising under delivery delivering competitors that have claimed to have network access are now being somewhat outage in the market, which I think is good for us because we've got a really strong bed rock based network with a.
<unk> mode around it as you know and we just continue to deliver as will stated and you heard him just say it again really solid return on investment for our clients and still feeling really confident in that.
In terms of competitive landscape.
Okay.
That's encouraging to hear.
Thanks, again and congrats on the progress this quarter.
Thanks, Joe.
Thank you.
Our next question comes from David Grossman.
Your line is open.
Thank you. Good afternoon I was wondering if I could just follow up on some of your comments about the our WB activity it sounds like.
Sure.
If you expect to have six contracts in place from the beginning of next year.
And that gives you confidence that you could I want to make sure I understood. Your comments right. So does that mean that you feel confident with that activity alone you can grow 20% in <unk>.
Im understanding that right that you could maybe talk about just the mechanics mechanics, and cadence of how those contracts work because I know there is a front end kind.
Kind of implementation phase and then it goes into the kind of the more.
<unk> borrowed.
Kind of.
<unk> type of revenue Rec. So just if you could clarify those things that'd be great.
Yes, Hey, David.
For sure so.
Our business even next year, we will still have a healthy degree of tactical.
And media purchasing so it does not imply that that alone will drive growth but.
Yes, definitely the tactical part we have a pretty good handle on and again, we have a closed network, which no one else has and its proprietary in advance of really strong CPM and I will say, we've taken the second half of this year to really reinvigorate our focus on.
The agencies agencies as clients.
They have been terrific partners and while we certainly focused on the Msas with big pharma, which we have.
Pharma uses agencies right. So there's a clear connection between the two we view them all as clients and we think that will that will secure and grow the tactical part and then the <unk> on top of that.
Is it as beef year, its more consistent and again, it's at a higher level in the organization such as more predictable and the contracts are pretty solid so.
But we're still we're still building still developing David it's not.
Mostly that yet but just.
Just having it gives us a lot of confidence that.
We'll get back to the growth that people expect from us and frankly that the white space in the market allows.
As well as these headwinds getting out of our way.
And just in terms of cadence will how do we think about that if you've got these new contracts were up ramping.
Many of them on that.
That front end piece.
Does that skew revenue at all to the first half versus second half or vice versa. Just how should we think about just the mechanics of the Rev. Rec on those new deals that will be ramping next year because it sounds like you have several that you expect to be ramping in the first half of the year.
Yes, so we expect some of the setup and architecture to actually be done in Q4.
That's a positive and to get to and then the remaining in the first quarter and then the distribution of those messages throughout the first half. So it is going to give us much better visibility on the first half.
With a type of revenue that is it just builds more confidence and so when we report Q4, we'll be able to get into a little bit more specifics on that David at this stage, it's still relatively early in the quarter.
In a quarter, where every day is pretty active.
<unk>.
We can get more specific about that cadence on the next call.
And just one last one just on the retention so it sounds like in your prepared remarks that that's.
Being negatively impacted by the renewal of that R. W.
Is there a natural point in which we kind of have we hit bottom for retention do you think or if there is a retention bottom in the fourth quarter and then start building from there assuming a somewhat stable.
The macro environment, if you will.
Yes, Ed do you want to take that one yes.
Yeah, Yeah sure Yeah, David Great question, I would say, we're probably getting close to the bottom I think the biggest variable here is how quickly the recovery will come.
Obviously, you have got four quarters looking back right now captured in that number and that's really driving that number what are you seeing now.
My hope is.
Our projections come true.
You'll start to see that number recover.
Sometime next year.
Great. Thanks.
Thanks Neil.
Yes, Thanks, I would just add to that David that I think we are going to see follow on effect from the client base. I think this approach is going to really be differentiated.
The more and more we have conversations we mentioned two new clients getting in on this.
Pipeline is very healthy so.
Yeah, but to your specific question, yes, the bottoms up from here.
Alright, great. Thanks again.
Thank you.
Okay.
Okay.
And our next question comes from.
Joy Zhang.
Your line is open.
Yes.
Well congrats on look, Florida, and thanks for taking my question.
My first question is a follow up on <unk>.
There are smaller agency clients can.
Can you just talk to you we are right now with your answer farm that burst is working with agencies.
And also how that should evolve over time.
Sure. Yes, so you might want to hit me because I can hear you on the floor.
So the.
All our businesses with pharma right at 100% of it and so.
So the investors are clear you need msas to do that but pharma relies heavily on agencies.
Three ways.
Media content and strategy.
And so we have relationships with over 50 agencies, because ultimately once the clients decided to work with US. We then worked directly with the agencies to make it all work to make sure the content.
Is compliant and works.
The strategy when it comes to things like <unk> and other areas of challenge for our clients and then obviously media spend which is more tactical and also plays really nicely into our Omnichannel approach now so.
They are a part of the universe and an essential almost like advisor to pharma, we don't really break out what percentage of revenues from where because it could be as simple as they're just paying the bill but ultimately our sales force is directly focused on the clients and then working with those agencies that facilitate that.
Relationship.
That's super helpful.
As a follow up.
Any chance, we can get as a percentage of revenue for the <unk> business.
And maybe remind us how the contract economics are structured specifically you mentioned.
They are happening in <unk>. So does that mean, you can potentially benefit from bias inform to you specific envy our WPS business.
We're not just taking the last one first.
Not really talking to buy ups, we think.
It's just still too early to get into that however, it is a good time to get those newer clients setup for 23. So we will see some of that set up economics, we don't break out the percentage, but just.
That's a range that can be anywhere from half a million to a $1.
Five in terms of the set up when we generally get that down over a three months period of time.
And then it moves to just distributions switches like most of our business but.
But at a higher CPM.
So.
And then on the relative to the <unk> pipeline, we don't break it out we don't think we don't really talk about pipeline anymore.
But I think where we're leaning on a pretty heavy to make sure. The message is out there that that will be a growth driver on top of the tactical work, Steve you want to add anything to that.
No I think you've covered it.
All your comments of Covenant will it will be more predictive revenue.
Less transactional.
<unk>.
Q4 will reflect some of that so.
Thank you Kevin.
Okay great.
Thank you very much very helpful.
Thank you.
And as a reminder, if you would like to ask a question. Please press star one on your telephone keypad now.
And our next question comes from Eric Martin Newsy.
Your line is open.
Yes, I wanted to ask about the guidance for Q4, it looks like a pretty wide range.
19 million to $25 million roughly.
Just curious so you talked about 95% kind of.
Got it there already.
Is it just by ups.
I think so.
Wide band or is there.
Is it <unk>.
Setups.
What's behind that wide band.
Well I think hey, Eric how are you doing as well.
We feel that the headwinds we expressed in Q2 Q3, we obviously were saying they are subsiding, but theyre still around so.
We don't want to get ahead of it we'd rather be conservative on the approach towards the end of the year.
That range is smart for our size company.
It's really about managing expectations and so we feel really good that we'll be able to do that range as Ed said, we have 90% viewed today.
And it's very early in November so I think that should give people confidence that.
We should be able to do that and.
Fully focused on it as a team.
If we hit the high end of it will be because the fill in the blank.
Yes, it would be decisions by the clients moving a little faster.
By ups coming in that we don't know about yet.
That kind of thing.
Okay.
And then you talked about the.
One of the bigger issues back 90 days ago on the reset for the year was the <unk>.
Low new drug approvals.
As well as increased turnover rates.
Client companies.
You talked about an increased rate of approvals over the past two months, what exactly do you mean by increased rate of approvals.
You're just seeing the FDA be more active in.
Proving specialty medications.
If you just look at the logs youll see that.
Clearly they have stepped back in.
Backlog is getting worked through.
And thats good for us, let's just to remind everyone that that means that those <unk>.
<unk>, which are probably in areas that we're focused in.
We'll.
Get approved and have to go to market and therefore, we will kick into gear, helping those clients. So it's all kind of what's the lag. There is there I mean drug gets approved then how many months before the spin off.
Once it's approved they are building the awareness immediately.
Okay.
Got it.
Okay. Thanks for taking my questions.
Thanks, Sir.
And our last question comes from Mark Wilson Burger.
Your line is open.
Thank you Rob.
Revenue from customers outside of the farmers top 20 was the best level. It looks like in at least the last seven quarters could you highlight some of the dynamics impacting some of your smaller customers relative to the larger pharma customers.
And do you want to take that one.
Yes, absolutely.
Absolutely. So I think really what youre seeing is just a factor of the cadence that we'll highlight it on the prepared remarks, so basically one of our.
The larger customers with the <unk> renewal.
It resulted in just the numbers kind of looking at a little weird in the third quarter, so effectively because they werent there.
From a percentage of revenue standpoint, it makes some of the smaller customers seem higher.
And so that that's really what's supporting that being a bigger percentage of the overall business.
Okay and then that's why we feel that that's the.
That's why we feel like it's the bottom.
Once those kick in it should bring back come back nicely.
Sure understood and then you mentioned.
Smart digital technology is taking the lion share of commercial dollars that had transitioned from legacy to digital solutions I'm wondering if you could elaborate a little more on that.
Well, if you just think of.
The dollars that are out there for sales reps conferences speaking bureaus, all that good stuff.
Pharma, obviously pulled back through the pandemic.
There's a lot there.
We'll have perhaps the size of smaller there's enough out there to see that that is the shrinking community, but the needs are greater in terms of communications with doctors and patients on the pharma side, and frankly things are more complex and more expensive and so.
This is where we think this this education of the market as awareness that this resources fully available for them and compliant and measurable.
It's starting to be seen.
We saw a little bit of noise with everyone rushing into grab digital dollars that really confuse the market and I think it's lifting now based on what Steve said around measurement and.
Yes got actually support what you said and that's getting harder for smaller companies.
Whereas ROI at year over year, just goes up given the solutions that we have around helping patients start and stay on therapy. So I think I think youre going to see that continue.
But the dollars are going to be efficiently spent.
And the ROI is going to be strong enough that I think the CAGR of spend will continue to be really attractive in this space.
Despite the economy and sort of some macro headwinds.
Got it and then just a final one for me in the release you talked about the Ardebili could drive 20% growth next year.
Could parse that a little bit in terms is that just kind of upsells to existing brands, winning new brand what type of conversion rate would that equate to and then kind of how does how do you think about the growth rate.
In other parts of the business relative to you previously had talked about kind of 30% growth was achievable kind of at the end of last year. Early this year, how would that all factor into potentially getting you back to those levels. Thank you.
Yes, sure Mike well, there's a lot of pieces to that question, but I think ultimately.
As we said tactical we feel like we've set the wheels in motion to grab that business and grow it our WD is going to be a very large growth compared to last year.
Put those two together and Youre just more relevant to your clients, which means you will capture more shares because the budgets are all bigger on the digital side. So we feel like we've got all those lined up we've got the team to execute network to reach and the tap to be secure and compliant so.
Yes, we havent given any clear direction on 'twenty three we just referenced that we feel like we've got the pieces to get us back to that 20% growth.
Yeah, we have no further questions in queue at this time.
Okay.
Thanks, operator once again, thank you everyone for joining us on our update call. This afternoon, we continue to work through the opportunities before us with the expectation that more projects will come online in the coming quarters. We are maintaining our focus on product execution to continue to deliver superior rois in behalf of our customer.
Which has and will continue to pay dividends as we execute against the opportunity within the vast white space that we continue to sell into.
Our core strategic imperatives, and operating strategies have not changed and we will expand upon our innovative solutions.
Which address the needs of our customers, while improving care for Hcp's patients. We are fully confident in our best in class platform offerings, while our growing point of care network remains unrivaled, creating a significant competitive moat around our business.
As a result.
<unk> expertise in bridging the digital communication gap in health care in order to improve medication awareness access and adherence and affordability remains unsurpassed.
Finally, we built a business that is capable of driving across various economic backdrops, we generate positive free cash flow and have a sizable war chest that positions us to be highly opportunistic on the strategic front.
Meanwhile, large pharma our largest customer base is very well throughout the pandemic and their balance sheets remain extremely healthy and are continuing to move more and more spend to digital solutions.
Outside the three factors that I highlighted earlier, we should be more insulated from broader macro factors than most industries, particularly as the FDA and pharma workforce turnover issues work themselves out.
We wanted to lastly, thank our employees shareholders customers and partners alike. As we continue to build out our solution on one unified Omnichannel platform.
Look forward to the next update call and fully expect to see positive momentum carrying us into fiscal 2023.
All the best.
Thank you Sir.
Before we conclude today's call.
I would 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 a.
And the Securities Act of 1933.
As amended.
And section 21 E.
The Securities Act of $19 34 as amended.
These forward looking statements should not be used to make investment decisions.
The words anticipate.
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And similar expressions identify forward looking statements.
They may speak only to the date.
Our statements are made.
Such forward looking statements in this call include statements regarding estimation of total addressable market size market penetration.
Revenue growth.
Gross margin.
Operating expenses profitability.
Cash flow.
Technology.
Investments.
Growth opportunity.
Acquisition.
Upcoming announcements.
The need for raising additional capital.
They also include the management's expectation 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.
Forward looking statements are inherently subject to risks and uncertainties, some of which tend not 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 are.
Uncertainties to which forward looking statements are subject to include but are not limited to.
The effects of government regulation competition and other material risks.
Risks and uncertainties with forward looking statements are subject.
Sue could affect business.
And if the results are included in the company's annual report on the Form 10-K for the quarter ended December 31 2021.
This form is available on the company's website.
On the as well.
Website.
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Before we end today's conference I would like to remind everyone that this call will be available for replay via webcast.
Only starting later this evening and running through for year.
Please refer to today's press release for replay instructions available via the company's website at www dot optimize our dot com.
Thank you for joining us today.
This concludes today's conference call you.
You may now disconnect your lines.
Yes.
The host has ended this call goodbye.