Q4 2022 OPTIMIZERx Corp Earnings Call
Speaker 1: All.
Speaker 2: Good afternoon, everyone, and thank you for joining OptimizeRx's fourth quarter fiscal 2022 earnings discussion.
Speaker 2: With us today is the Chief Executive Officer of OptimizeRx, Bill Fable. He is joined by company Chief Financial and Operating Officer Ed Stelmach.
Speaker 2: Chief Commercial Officer Steve Silvestro, General Counsel and Chief Compliance Officer Marion Odense Ford and Senior Vice President of Corporate Finance Andrew DeSilva.
Speaker 2: 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 only. Instructions are included in today's press release.
Speaker 2: and in the investors section of the company's website. In addition, management will discuss certain non-GAAP financial measures today that they believe aid in the understanding of the company's financial results. Our reconciliation to comparable GAAP financial measures can be found in today's press release.
Speaker 3: Now with that, I'd like to turn the call over to OptimizeRx CEO William Febo. Sir, please go ahead. Thank you, operator. Good afternoon, everyone. Thank you for joining us today for our Fiscal 2022 earnings call. 2022 has been a year of great challenges and new opportunities for much of our industry and OptimizeRx.
Speaker 3: as the pharmaceutical industry continued to accelerate its digital evolution. This created unprecedented interest in our company from clients, partners, and multiple strategic parties aligning with the opportunity and OptimizeRx's platform.
Speaker 3: I believe this is directly correlated to the tectonic shift in the adoption toward the use of digital health technologies by clients, doctors, and patients.
Speaker 3: 2022's revenue of $62.5 million fell within our revenue guidance range.
Speaker 3: Our gross margin of 62.4% surpassed the high end of our guidance, and we were able to generate nearly $11 million in operating cash flow during the year.
Speaker 3: Ed will go into more of the financial details shortly, but I maintain we are well positioned for growth given the health of the business, the team, and the limited number of players who can scale, measure, and report in our industry.
Speaker 3: More importantly, despite the macro headwinds that we've outlined in previous calls, we were still able to win six deals that utilize our AI-driven real-world data for RWD AI offerings. We expect to have additional RWD AI wins this year and continue to believe revenue from this solution will increase at least 100% year-over-year.
Speaker 3: end. While we are optimistic that the macro headwinds will begin to subside this year, and there have been positive trends since the mid-2022 draw, we are taking a more conservative approach to guidance this year given the macroeconomic backdrop, despite having a higher revenue backlog at the start of the year as compared to previous years.
Speaker 3: in acquisitions have created a robust single stop omni-channel offering that's driving a superior ROI for the grants that we serve.
Speaker 3: We've also made tremendous progress in building on our industry reputation and expanding awareness of our solutions.
Speaker 3: Part of what makes our business model special is the fact that we continue to manage the largest in-workflow point of care network in the US.
Speaker 3: and are able to deliver digital solutions via this connectivity to prescribers.
Speaker 3: To complement this, we have been expanding service offerings outside of the EHR, which we believe will result in us capturing a greater portion of the available industry white space over the next 3-5 years. With total industry digital spend at more than $10 billion and growing, the white space in which we sell and to remain vast.
Speaker 3: even for the brands with which we are currently working.
Speaker 3: From a competitive intelligence perspective, we are well aware of new entrants.
Speaker 3: And what we have witnessed has been brand managers being willing to test out the functionality of new vendors.
Speaker 3: While this did create a longer sales cycle in 2022.
Speaker 3: The end result is that after a short trial period, newer entrants are being quickly weeded out from the ecosystem in which we compete.
Speaker 3: Initial solution evaluations of new entrants have been less than stellar due to offerings lacking meaningful connectivity and interoperability, which is really the foundation of our platform and enables us to address fundamental prescription issues facing HCPs and patients.
Speaker 3: As market demands continue to grow in complexity, along with continuous adoption of point-of-care solutions,
Speaker 3: Coupled with actionable insights, our investment priorities shifted to provide our clients with enhanced reporting capabilities.
Speaker 3: as supported by recently established exclusive partnership with MMFI, an industry leading data enabled agency.
Speaker 3: Meanwhile, PhRMA is moving a greater portion of their commercial spend toward omnichannel digital solutions.
Speaker 3: while looking for these solutions to deliver more impactful results by not only identifying patients known to HCPs, but also pinpointing new patients for the therapies.
Speaker 3: We believe smarter solutions such as our RWD AI offering
Speaker 3: will capture the lion's share of the pharma spend, particularly with legacy commercial dollars that are reallocated to digital.
Speaker 3: We believe early proof of this trend is clearly highlighted by our ability to win six RWD AI deals during a time when pharma was tightening its purse strings to preserve their year-end bottom line.
Speaker 3: RWDAI has the added benefit of moving us from being a tactical player with pharma to a bigger strategic partner.
Speaker 3: where we can benefit from a top-down push by decision-makers while obtaining stickier revenue streams with stronger margins and a greater overall growth potential.
Speaker 3: That is why I've never been more excited about our strategic positioning than I am today. I expect the combined impact of what I've outlined today to pay significant dividends over the next three to five years and result in our revenue increasing to multiples of where it currently sits.
Speaker 3: For now, we are following through with our Land and Expand strategy. We continue to benefit from our delivery of superior return on investment, which continues to stand at well over a ratio of 10 to 1.
Speaker 3: This is significant considering pharma has traditionally sought out ROIs of the two to three times spent.
Speaker 3: With that, I'd like to turn the call over to our CFO and COO Ed Stalmach, who will walk us through the financial details for Q4. Ed?
Speaker 4: Thanks, Will, and good afternoon, everyone.
Speaker 4: Thanks, Will, and good afternoon, everyone. As with all our calls, we are here to help you get through this pandemic.
Speaker 4: The press release was issued with results of our fourth quarter and the December 31st, 2022.
Speaker 4: A copy is available for viewing and may be downloaded from the investor relations section of our website. Keep watching.
Speaker 4: Additional information can be obtained to a forthcoming 10K, which will be filed in the coming days.
Speaker 4: Turning to our financial results for the fourth quarter and the December 31st, 2022.
Speaker 4: Our reported revenue for the period was 19.7 million, a decrease of 3%.
Speaker 4: its birthstrings around end-of-year biops.
Speaker 4: Cross margin for the quarter increased from 61% in the year-ago period to 63% in the current reporting period.
Speaker 4: The gross margin increase is the result of a favorable solution and channel partner mix.
Speaker 4: We continue to expect solid gross margins in 2023.
Speaker 4: and our guidance calls for our full year 2020 P gross margin.
Speaker 4: Come in between 58 and 52 percent. Operating expenses increased to approximately 13.3 million in the fourth quarter of fiscal year 2022.
Speaker 4: as compared to approximately 11.8 million in the same year-ago period.
Speaker 4: This increase in expense is primarily due to the investment in the optimized Rx team.
Speaker 4: to enable future growth which also includes our April acquisition of EventsMed.
Speaker 4: Providing more color around our year-over-year increase of OpEx.
Speaker 4: 1.4 million of the 1.5 million year-over-year increase.
Speaker 4: was tied to stock-based compensation and non-cash expense.
Speaker 4: with the remaining amount being primarily related to the InvenMed acquisition.
Speaker 4: We had a net loss of $325,000 in the fourth quarter of fiscal 2022.
Speaker 4: as compared to a net income of approximately $623,000.
Speaker 4: During the same period in 2021.
Speaker 4: For further details on our fiscal 2022 results, you can refer to the MD&E section of our upcoming 10K.
Speaker 4: On a non-GAAP basis, net income for the fourth quarter of 2022.
Speaker 4: was approximately 4.4 million or 25 cents per fully diluted share.
Speaker 4: as compared to non-GAAP net income of approximately $4 million, or 22 cents, on a fully diluted basis in the same year-ago period.
Speaker 4: We also generated $10.7 million in cash flow from operations.
Speaker 4: cash, cash equivalents and short term investments totaling $74.1 million as of December 31, 2022 as compared to $78.8 million as of September 30, 2022.
Speaker 4: The sequential decline in our cash, cash equivalent and short-term investments was tied to our buyback.
Speaker 4: As a reminder, we announced a $20 million yearly purchase program.
Speaker 4: during the second quarter and during the fourth quarter we bought back five hundred and eight thousand shares for seven point five million an average price of fourteen dollars and sixty-eight cents
Speaker 4: In total, we repurchased 1.2 million shares.
Speaker 4: an average price of $16.49 per share.
Speaker 4: This amounts to a nearly 7% reduction in our total outstanding shares.
Speaker 4: from 18.3 million to 17.1 million, a net positive for our shareholders.
Speaker 4: In terms of our revenue outlook for the full year of 2023, the company expects revenue to increase at least 10% year over year.
Speaker 4: We expect first quarter revenue to come in between $11.5 million.
Speaker 4: first quarter revenue to come in between 11.5 million 13 million dollars.
Speaker 4: Now, let's turn to our KPIs for 2022.
Speaker 4: Our average revenue per top 20 pharmaceutical manufacturer declined year over year by nearly 14% to $2.1 million as a result of extended due closing timelines.
Speaker 4: as well as the high turnover rate.
Speaker 4: as well as the high turnover rates and pharma decision maker ranks in the post-pandemic world.
Speaker 4: Our adoption within the most meaningful pool of global commercial pharma.
Speaker 4: remain strong with 18 of the top 20 pharma companies continuing to be our clients.
Speaker 4: net revenue retention rate also declined 90%.
Speaker 4: due to the macroeconomic factors already mentioned, and the resulting impact on several client programs.
Speaker 4: Our operating model has remained resilient in the face of 2022's challenges with the revenue per FTE coming in at $606,000.
Speaker 4: Our KPIs continue to capture and communicate the results of OP-Rx's lend and expand strategy in a consistently transparent manner.
Speaker 4: We intend to continue to report our progress to our stakeholders in a similar fashion as 2023. And now with that, I would like to turn the floor back over to Will.
Speaker 4: forward their progress to our stakeholders in a similar fashion as 2023. And now with that, I would like to turn the floor back over to Will. Will?
Speaker 3: Thanks Ed. Operator, now let's move to Q&A.
Speaker 2: Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a three-tone prompt acknowledging your request.
Speaker 2: and your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any key.
Speaker 2: One moment please for your first question.
Speaker 2: Your first question comes from Ryan Daniels with William Blair. Please go ahead. We'll be right back after this.
Speaker 5: Ed, I'll start with a question for you on the revenue outlook. It looks like based on the Q1 guidance in the full year, you expect a drop in revenue of about 11% year over year in Q1, but still looking for 10% year over year growth. Can you speak a little bit to the cadence of revenue throughout the year in the ramp and then...
Speaker 5: The level of conviction you have in getting that 10% plus growth, given the slower start to the year, and maybe some commentary on backlog getting you there, what's signed to be implemented, or any visibility to help us triangulate in there. Thanks. Thanks, Ryan. Great question. As far as the cadence is concerned, as you know, we have a lot of questions.
Speaker 4: The vast majority of our revenue comes in in the second half of the year. So, yes, Q1 is definitely a little bit weaker than we hoped for. But we're coming out of the RFP season with a back a little bit stronger than we had in the back, as Will had mentioned. Thanks for watching!
Speaker 4: So our plan and our desire right now is to really continue to build on that backlog. We do have a line of sight to opportunities that we feel will get us to a decent percent growth rate this year, but it will definitely see more towards the back end of the year.
Speaker 5: if the market on a macro basis worsens. I'm just trying to get a deal for how much is really contracted.
Speaker 4: Yeah, so we don't disclose specific numbers. Typically, where we sit every year, looking forward in Q1 of every year, is between, I would call it, between 40 and 60% range of the line of sight for the rest of the year.
Speaker 5: So somewhere within that range is our line of sight for 10% growth rate going into this year. Okay, thank you. And then on the KPIs, as one of the partners dropped out, is that an actual lost partnership or is it just the timing where you know they're still a partner but they weren't actively engaged during this period?
Speaker 4: That's just part of the normal cycle. Sometimes a client will come in, sometimes they'll come out, but there's no real dropping of our services and solutions within any device.
Speaker 5: Okay, maybe a macro question for will just you know what are you seeing the market in regards to pharma's view on?
Speaker 5: engaging providers at the point of care with digital solutions. You mentioned the 10 to 1 ROI. I know farmers shrinking their own sales force, but what's the view broadly on care marketing?
Speaker 3: You know, hey Ryan, thanks for the questions. You know, whenever you start to see people use the term legal review, MLR in pharma services or marketing, that means that, you know, whatever you are selling is being taken very seriously.
Speaker 3: It just means the infrastructure within pharma. And I think you've heard it from other companies as well, that that can sometimes delay sales cycle or launch. But I would say that is a very positive sign. That's one. Two, it funders on lock point goes toHy cling.com.
Speaker 3: There's just been so much awareness built over the last 18 months a lot of piloting a lot of trying and You know pharma is very good at getting to the companies that can scale and leaning in heavy there. So Just based on the conversations we have based on the relationships. We have the trust we built. Well, yes We said it got cluttered for the last
Speaker 3: I would say net net, those conversations are all going really well and anything we've done at that table to date is performed. And you know, they're back, they're back with us for more. So net net, good macro. Still have the headwinds internally, their turnover is slowing.
Speaker 3: FDA is still getting back on their feet and obviously the macro world is still dealing with interest rate hikes.
Speaker 5: Final question, you mentioned the competitive front increasing and elongating the vision cycle. I'm curious if there was any specific product you offer or solution that was impacted. And then as a follow up, you mentioned the competitive front increasing and elongating
Speaker 5: If we think of your 10 to 1 ROI, have you heard anything anecdotally about the competitive environment and what they've been able to produce? It sounds like perhaps they haven't been able to validate that level of savings so that could flip back to you in the future. I don't know if that's a fair statement, but I'd love to hear on those two. Thanks.
Speaker 3: Yeah, sure. Thanks, Ryan. Yeah, on the competitive front, you know, most of the competition, other than the ones that we've talked about, have come in by connecting to various different pieces, but really don't have the reach of the whole network like we do. They're not directly integrated. It's always a tier two relationship.
Speaker 3: And that's going to do two things. That's going to, to your second question, that's going to really limit them on measurement. Just because when you're going through someone who's going through someone, you're going to lose some of that data and, or you may not get it at all. So I think that's, that's what we've seen. That's been the noise. And you have to remember that pharma relies pretty heavily on it.
Speaker 3: pretty clear path to being a unique data set especially since we've layered on RWDAI which none of the others can do and and that's response from the client has just been tremendous so I think that will that will help us on our ROI and
Speaker 3: Those that do have scale, some of the other companies that you cover, they generally have a pretty strong ROI and they can actually measure it. And how we are integrated, it's very straightforward for us to do.
Okay, perfect. Thank you for the comments. Thanks, Ryan. Your next question comes from Sean Dodge with RBC Capital Markets. Please go ahead.
Yep, thanks. Good afternoon. Just going back to the guidance, maybe he should give us some help reconciling the statements from the Q3 call. Will you said then just executing on the RWE opportunity to position you to grow over 20% in 2023. It appears
based on what you've announced you're executing on, if it's been guiding to less than 20%. So is the difference, is this just the conservatism you mentioned? Is it kind of the ongoing, challenging macro situation, or is there cannibalization or attrition that's happening else that's offsetting?
some of the kind of the positivity on the RWE front.
Yeah, no, it's mostly conservatism. We report late enough that we can listen to enough other executives and across the board people are being conservative. And I think that's wise in the macro economy we have. And also, as we said, the headwinds aren't completely gone. So you put the two together and I think it's a lot better to be concerned.
Are these largely existing clients looking to upgrade to RWE or are these
I guess net new prospects.
had done two projects in 20, we were measuring in 21 largely, and had those players come back and then generated another four. And this pipeline we talk about is all either existing clients getting into the ROI or new clients doing RWDAI. But Steve, you want to give a little bit more color to that?
Yeah, happy to. Hey, Sean. I think one of the things that's driving this for us is, you know, we've got a really solid team of clinicians, people who've got clinical experience and have practiced, two of which are MDs that are driving the patient architecture. So that's a really unique differentiator. And so these are people that are involved with existing clients. So most of this work is being done in the top 20.
And so they're taking work that we're doing and then adding onto it. So it is it is enhancing the land and expand strategy that we implemented early on and driving it. The same sort of logos on the clients, maybe some different brands, but much larger opportunities and no cannibalization, right? This is completely additive.
To the portfolio solutions that are already implemented.
Okay, that's great. And then just last one maybe for Ed, the RWA deals you've signed and I presume are in the process of implementing now, was there any revenue associated with those, maybe like architecture fees that were captured in Q4 or is all of this kind of net new or incremental beginning in Q1?
this year.
Okay, great. Thanks again.
Your next question comes from Stephanie Davis with SVB. Please go ahead.
Hey guys, thank you for taking my question. Well, last quarter you pointed to 20% revenue growth fueled by that RWDAI wins alone. So.
Obviously, we're a little surprised by the 2023 outlook. So talk to me about the drivers of this implied kind of decline in its core. Is that decline in attrition? Is that pricing and market wallet shrinkage? Or is that something else?
And you also you call that a conservative approach to guidance. Can we kind of just walk through what you think being assumptions was?
Sure, Stephanie, good to hear your voice. Yeah, in Q3. Right? Should I leave? No way. No way. Bring it. We're on a great year together. No, we, look, with Q3, we said we could get up to 20% growth if everything went our way. You know, we've seen...
continued headwinds, which we've talked about, and frankly, we're not the only ones talking about it. So it's not like it's a new thing. And so that's going to make us more conservative, right? We're not losing clients. We're closing new deals on better solutions, which basically pull in the other solutions, which...
the younger brother that's more agile, a little smarter, maybe a little faster. And I think it's true, actually, from what I'm learning when I'm with the clients, these years, you know, the pain points still exist for our clients. They have a hard time reaching HCPs.
They have a hard time enabling patient support programs, and we have a network that can do that. So no drama here, being conservative, want to be able to build up the year in a good way, and we have a lot of confidence that we can.
could do that. All right understood. Let me put this a different way. You did a massive buyback ahead of this guidance.
Should we read that as a more hopeful view on the macro than what's implied in the guidance? Or is there something else we should consider in that move?
Yeah, I think we did not only a buyback with the company's money, but most of the senior team did a buyback too. So we obviously believe in the business. Look, I should highlight everyone has choice in this market with unemployment where it is and the amount of new solutions that meet good leaders. And we've had no turnover in our company.
So, not that doesn't mean that everyone's hitting on everyone, which they share with us, but I think that's a telltale, Stephanie, that we've got a lot of conviction and we're being smart in a market that requires you to be a lot smarter and a lot more careful with what you tell the world you're going to do.
So we're going to focus on our growth drivers through the year. We're going to keep everyone updated on that. I think that's a thing to watch as an investor. You're going to see the growth in other solutions because we're getting some good traction there around helping different types of client sets.
And, you know, we don't, we're in no financial trouble at all generating cash at this size business. I mean, if you look back at any of my peers, none of them are doing that.
Your next question comes from David Grossman with Stifel. Please go ahead. Good afternoon. Thank you very much. So I think this has been coming out on a few other questions, so sorry just to revisit this. I was hoping maybe just to get a better sense of just the architecture of…
in terms of why there was such a big drop in retention, what were the underlying drivers? And then as you kind of roll that forward, you know, if you apply that to your base, you know, it looks like you got to add about $15 million or so to hit your revenue guide for at least 10%. And how do you want us to think about, you know, how much of that, you know, how much of that?
would fall in kind of to the ordinary cadence of the business in terms of new bookings and fees that you're going to get from architecture fees from the RWDAI deals that you've already signed, etc. Okay, a couple questions in there. Ed, do you want to tackle the retention one first? Yeah. Yeah. Yeah, great question, David. Yeah, so the KPIs, as you know, are 312 months to look back.
So obviously with the less than stellar year in 2022, we're now capturing the full year impact of that versus 2021, which is a very strong year.
So, you know, your own your comparison basically is skewed by that dynamic as the year, you know, as 2023 gets better. Obviously, you should see an impact on those metrics and you see the recovery in that in that metric. And it had just before the next one, how much of the.
The retention, you know was kind of driven by things that happened earlier than in the year Versus you know the back half of the year I don't know if you think about it in those terms at all But just wondering is because I think he had some losses right towards the beginning of the year. Just wondering if
that never changed much in your mind as you were thinking about next year as the year went on, as 22 went on.
Yeah, I don't know if we really get to that level of detail in terms of underlying root causes. There was a set of dynamics that occurred last year that we already disclosed.
It was probably just a confidence of all the factors that played a role in driving revenues down within that top 20 pool of clients. We did grow, as you can see, outside of that pool to some degree, but since that metric hits the top 20... Well, I pearl SOME Ya in the Jeffrey
you'll see the bulk of that decline driven within that portfolio clients.
Yeah, David, yeah, to your second part of the question, you know, how much of the additional revenue for growth this year is sort of ordinary. You know, it's clearly RWDAI is going to be a piece of that growth. But we also had projects last year that were pushed into this year. So that is part of that as well.
and that's already rolling. And then we've also just given the differentiation of our WDI and we did some pretty aggressive marketing among the agencies that advise pharma as well as direct to pharma. We're just seeing, as we said, a big pipeline there building.
We don't talk about the number, but we didn't have one last year. So that gives us more confidence in year of closing on this kind of offering because we now have measurements put against it. It's not just a shiny object. It's actually part of the tool shed now.
So, those things combined should give us that additional revenue needed for the at least 10% growth. So that being said, all the content that I'll do today is executed across Lake Mission Master Suchi,
Just one last one. I cannot remember if you provide this information, but just a qualitative look at whether we have year-over-year patents, drugs coming off, patents that may impact your business at all. Either favorably or unfavorably. They will bechild CG Cherry Creek Pres withheld Detroit Triple Gfuck <expletive> rights in California.
Yeah, this year we do not have one we're dealing with that is material to our revenue. Steve, do you have any other comment on that? But I know it's not something we, it's not a headwind this year.
Yeah, nothing this year to impact us negatively on current programs at all. Couple next year, but they're sort of latter part of next year and not larger programs. And we're expecting several launches that will be more significant than the patent expertise. So great question though, something we're always looking at. Great. All right, guys. Thanks very much. Thank you.
Thank you. Your next question comes from Neil Chatterjee with B. Riley. Please go ahead. Hi, guys. Good afternoon and thanks for taking our questions. I guess you've already fielded a lot of questions on the guidance, but maybe just...
There's one more here just as we think about the you know, just the cadence of potential kind of incremental RWE deals, you know, I guess either to the first half or into the second half.
You know, it's any color you can provide on your expectations for that and how that's contemplated in the guidance. You know, and if that could present some top line, you know, growth acceleration or maybe upside in the back half. Yeah, I'll start and then I'll pass it to Steve. But the good news on the growth is it's not over dependent on that either, right? We're not going all in on something.
that's new and obviously showing traction. So there's some potential upside there from my view, but Steve, you wanna talk to the, sort of the cadence of it through the year? Yeah, happy to. As you've heard from Will and Ed, you know, the pipeline is pretty robust for this particular portion of our portfolio. And so the sooner we close.
will look pretty good in terms of closing out some additional, you know, some additional RWU deals. And you've heard from Ed, we already have six live. So those will continue to generate revenue throughout the remainder of the year. And of course, because they're being driven by the models, you know, the messaging will be more frequent, higher volume.
but more targeted. Hopefully that gives you a little bit more insight. Two components.
Got it. That's helpful. And maybe if just curious if you just give us an update on kind of just the, the overall platforms capacity at this time.
Yeah, no problem. You know, we obviously we've talked a lot about channel we spent the last five, six years building it out to really focus on the physician HCP that pharma finds it hardest to reach that connects and overlaps especially medications which are complicated and expensive for patients.
than utilization right now. It is underutilized still. You know it's probably less than 30% is actually used in terms of our access. So the good news on this is it's a commercial execution year. We don't have to bet any one big play on any one partner.
the other channels. So omni-channel, right? Let's not just deliver information to physicians when they're a point of care, but let's think of social, let's think of all the other places where physicians are and we can actually see them and track and measure.
Net-net is just under 30 percent capacity, or utilization rather, and lots of new channels in terms of the omnichannel approach coming to market this year.
Great, and then maybe just 1 last 1 year for me. Maybe if you just kind of give us a sense of how you're thinking. You know, or how you expect marketing and digital spend the kind of trend here in the year. I would, you know, the code had was kind of in our rear view. Mostly.
Steve, do you want to talk to that one? Yeah, happy to. Thanks, Phil. Good question, Neil. So look, I think that everybody across the board in manufacturing universally is leaning into more digital spend. I think we've seen a ratcheting back of...
than it has been in years past. I think that's largely because everyone saw it as such an attractive space. We had a lot of sort of small new entrants jumping in, trying to get on board. Now the good news for OptimizeRx and other sort of established players is that those reporting requirements are now hitting. And so the programs that are not delivering are getting turned off.
in these smaller competitors. And so that's, I think, good news for the stable companies like OptimizeRx and others. And then I think in terms of leaning in to this general point of care, I think it's expanding a lot more in terms of what point of care the definition is. We see now more companies leaning into following the doctor, which is not just in the EHR, but as Will has said, and you heard Ed say as well.
giving the doctor the information that they need where they are, wherever they are. And so that omni-channel play is something that every manufacturer's focused on. You'll probably hear the phrase, next best action used pretty frequently. And that really is a module that's looking at where manufacturers should communicate with the physician as a next action.
and it's data driven. We're in a really good place in terms of that because right now we're the only business that's got the ability to use an RWD AI model at point of care that's integrated to drive that next text action in a real way.
So it's a good position to be in but excellent question. Thank you for it Thanks, that's it for me Your next question comes from Eric Martin Uzi with Lake Street, please go ahead
I wanted to focus on the Q1 outlook here with the midpoint down about 11% for the quarter. That would be your third quarter in a row contracting. I just wanted to focus on January , February versus January , February a year ago. Anything, because I think
How we finished out the year, obviously the Q4, you guys came in pretty much what you thought you would do on the top line, but entering the year, anything different about those buyer behaviors in January and February , maybe the first year ago?
Just how we finished out the year, obviously the Q4, you guys came in pretty much what you thought you would do on the top line, but entering the year, anything different about those buyer behaviors in January and February , maybe the first year ago? Steve, do you want to start?
Yep, no problem. Hey, Eric, good to hear your voice. We did see a little bit of slowing out of the gate in terms of RFP issuance. Manufacturers were sort of aligning on where they wanted to submit RFPs. Having said that, we saw a plethora of RFPs come in, more than we've seen in years past.
So the initial buying signs is as you've heard on this call are very positive leading us to kind of an optimistic full year view But the clocking of that is a little bit pushed out You heard us talk about the backlog which you know I think we probably shared that's a degree of optimism that we universally feel Given where we're at
And so we're not looking at it just in terms of Q1, projected performance, but full year, and using that as our guiding beacon here on the year.
Like the January , February , is there any kind of an uptick at the end of February or beginning of March that's baked into this minus 11 percent of the quarter?
We generally go ahead. No, go ahead. No, no. We're not going to give guidance on the corridor outside of what we've already done, Eric, but I think we can say we've got two components that we're looking at, right? Recognized revenue is a form of what we report.
rushing the year, just given everything going on. But I will say they've done lean we're seeing we're seeing it through our fees, we're seeing it through what we have in backlog. We're seeing it through conversations.
and seriousness of some of our partners at the agency level, looking at much bigger engagements. So yeah, the tell-tales are there for a good year. Again, just trying to really be conservative on this one there.
Okay, and then you talked about, I think the Q4 gap operating expense was 13.3. What should we think about for operating expense for Q1?
Yes, so. Yes, I got it. Thanks. So. Obviously, we don't guide on our operating expenses, but what I can tell you is there'll be. What about probably an uptake just given the fact that, you know, we are setting our bonuses.
expecting any major investments certainly in the early part of the year.
Got it. Thanks for taking my questions. Thanks Eric. Ladies and gentlemen, as a reminder should you have a question please press star followed by the one.
questions. Thanks Eric. Ladies and gentlemen as a reminder should you have a question please press star followed by the one.
If there are no further questions at this time, please proceed. Thank you, operator. So we're in an industry that is truly entering a generational paradigm shift in the way technology enables and drives better patient care and outcomes.
I say this as a backdrop given the importance of our business's move from tactical to strategic deals, which are growing increasingly larger in value. In line with this industry change, the runway for closing deals are now longer and require additional buy-in from our stakeholders.
That said, we truly believe that we have the right platform in place to deliver on the promise of improved outcomes, utilizing our solutions, in particular, our WD AI. Moreover, our robust portfolio of omni-channel services are expanding outside of the EHR and we continue to improve patient outcomes.
while driving our strong ROIs for our customers. We've also built a team and a culture as a company, which gives us a distinct competitive advantage as we focus on our clients, partners, and investors. In 2023, we have our financial and operational goals firmly underpinned.
by our best-in-class platform and the ability to access, distribute, and use the next generation of real-world, data-enabled insights across the largest in-workflow point-of-care network in the U.S. As such, we look forward to making a positive impact across our pharma, prescriber, and patient stakeholder base.
for the years to come. We want to thank everyone, employees, shareholders, customers, and partners alike as we continue to build out our solutions on a one unified omnichannel platform and look forward to reporting on our progress on our next earnings call and several investor conferences.
Thank you. Operator. Thank you, sir. Before we conclude today's call, I would like to provide the company a safe harbor statement that includes important, cautious, and important information about the situation and the situation that's been made during today's call. Statements made by management,
During today's call, make and take forward-looking statements within the definition of Section 27A and the Securities Act of 1933 as amended and Section 21E of the Securities Act of 1934 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. They may speak only to the date that such 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, and economic tails.
profitability, cash flow technology investments, growth opportunities, acquisitions, and upcoming announcements. They also include the management's expectations for the rest of the year. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information or because of new information.
Future events or otherwise 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 these forward-looking statements
The risks and uncertainties to which forward-looking statements subject to include but are not limited to the effects of government regulation competition and other material risks risks and uncertainties to which forward-looking statements are subject to To could affect business and financial results are included in the company's annual report
on Form 10K for the quarter ended December 31, 2022. This form is available on the company's website and on the SEC website at sec.gov. 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 running through for a year Please refer to today's press release for replay instructions available via the company's website at www.optimizerx.com Thank you for joining us today. This concludes today's conference call. You may now disconnect your lines.
The conference is no longer being recorded.
Yeah.