Q4 2023 OptimizeRx Corp Earnings Call

Operator: Good morning, everyone, and thank you for joining OPTIMIZERx's fourth quarter fiscal 2023 conference. With us today is the Chief Executive Officer of OPTIMIZERx, William Febbo. He is joined by Chief Financial Officer Ed Stelmakh, President Steve Silvestro, General Counsel Marion Odens-Ford, and Senior Vice President of Corporate Finance Andrew De Silva.

Good morning, everyone and thank you for joining optimize our exit fourth quarter fiscal 2023 conference call.

Speaker Change: With us today is the Chief Executive officer of optimize Rx Williams pedal. He is joined by Chief Financial Officer and del Mar.

None: So that's true general counsel Maryann owed on sport and senior Vice President of corporate finance and you're just elbow.

Operator: At the conclusion of today's 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, and a transcript and a link to the audio recording of this conference call will be provided in the Investors section of the company's website. Now, I would like to turn the call over to OPTIMIZERx CEO, William Febbo. Sir, please go ahead.

None: At the conclusion of today's call I will provide some important cautions regarding the forward looking statements made by management management during today's call.

None: I would like to remind everyone that today's call is being recorded and will be made available for replay via webcast and a transcript and a link to the audio recording of this conference call will be provided on the investors section of the company's website.

Speaker Change: Now I would like to turn the call over to optimize our S. T E. L. Williams pedal Sir Please go ahead.

Speaker Change: Yeah.

William J. Febbo: Good morning, and thank you for joining our conference call to discuss fourth quarter 2023 preliminary unaudited financials. As already communicated, our audit is taking longer than previous years due to the October 2023 acquisition of Healthy Offers, Inc., which does business under the name of Medix Health, the November 2023 solutions portfolio streamlining around core business lines, and the validation and testing of certain third-party vendors' internal processes that are part of our previously disclosed material weakness remediation plan. The audit is in the final stages, and we are confident that we will be in a position to file our 10-K and audited financials no later than April 15.

Speaker Change: Good morning, and thank you for joining our conference call to discuss fourth quarter 2023 preliminary unaudited financials.

Speaker Change: Already communicated our audit is taking longer than previous years due to the October 2023 acquisition of healthy offers Inc, which does business under the name <unk> health.

Speaker Change: Remember 2023 solutions portfolio streamlining around core business lines and the <unk>.

Speaker Change: Validation and testing of certain third party vendors internal processes that are part of our previously disclosed material weakness remediation.

Speaker Change: The audit is in the final stages and we are confident that we will be in a position to file our 10-K and audited financials. No later than April 15th.

William J. Febbo: I'm pleased to note that Q4 represented a strong end to 2023 and has favorably positioned us to start 2024. The quarter's financial results came in better than our initial expectations and topped analyst estimates, with Q4 revenue growing 44% year-over-year to $28.4 million. The improvement was driven by strong organic growth in messaging, led by our Dynamic Audience Activation Platform, or DAP for short, as well as from approximately two months of contribution from our acquisition of Medix Health. Notably, our legacy core HCP business grew over 30% when compared to the fourth quarter of 2022. We are excited about the many business highlights from the fourth quarter. We continue to validate our thesis on DAP as we increase the number of deals in 2023 to 24 deals, providing us with a significant revenue launchpad this year.

Speaker Change: I'm pleased to note that Q4 represented a strong end to 2023 and has favorably positioned us to start 2020 for the quarters financial results came in better than our initial expectations and topped an all staff with Q4 revenue growing 44% year over year to $28 4 million.

Speaker Change: The improvement was driven by strong organic growth in messaging led by our dynamic audience activation platform or <unk> for short.

Speaker Change: As well as from approximately two months of contribution from our acquisition of <unk>.

Speaker Change: Notably our legacy core HCP business grew over 30% when compared to the fourth quarter of 2022.

Speaker Change: We are excited about the many business highlights from the fourth quarter, we continued to validate our thesis on that as we increase the number of deals in 2023 to 24 do you provide.

Speaker Change: Providing us with a significant revenue launch pad this year.

William J. Febbo: Progress coming in ahead of what we had anticipated is very favorable as, by their nature, these DAP deals are larger, stickier, and more strategically targeted, making us a more relevant partner with our clients. We also acquired Medix Health, resulting in a combination of a leading direct-to-consumer audience activation and messaging execution business with our HCP-focused, omni-channel digital point-of-care marketing. This acquisition unlocks a significant adjacent market with an extremely large whitespace and cross-sell opportunity. The integration of Medix Health is tracking ahead of schedule, and the majority of integration activities have been completed.

Speaker Change: Progress coming in ahead of what we had anticipated is very favorable as by their nature. These deals are larger stickier and more strategically targeted making us more relevant partner.

Speaker Change: Our client base.

Speaker Change: We also acquired excel, resulting in the combination of our leading direct to consumer audience activation and messaging execution business with our HCP focused omni channel digital point of care marketing business.

Speaker Change: This acquisition unlocks a significant adjacent market with an extremely large white space and cross sell opportunity. The integration of medics health is tracking ahead of schedule and the majority of integration activities have been completed.

William J. Febbo: Furthermore, we have optimized our operation by trimming our legacy OPTIMIZERx costs by over 10% and simultaneously realigning our focus on core business lines and moving away from non-core business. As noted in our March 11, 2024 press release, we are reiterating our guidance for 2024 but revising our original 2024 revenue target. This revision is due to a change in the revenue accounting treatment for certain revenue streams for messaging executed through Medix Health's channel partners that were historically recognized on a gross basis but now will be recognized on a net basis. As a consequence of this gross to net accounting treatment, we adjusted our revenue target and anticipate revenue to reach at least $100 million in 2024. Importantly, this adjustment maintains our bottom line and, in fact, enhances our margin profile. Therefore, our adjusted EBITDA guidance remains unchanged, standing at at least $11 million for 2024.

Speaker Change: Furthermore.

Speaker Change: We have optimized our operations by trimming our legacy optimize our ex cost by over 10% and simultaneously realigning our focus on core business lines and moving away from non core business.

Speaker Change: As noted in our March 11, 2024 press release, we are reiterating our guidance for 2024, but revising our original 2024 revenue target. This revision is due to the change in revenue accounting treatment for certain revenue streams or messaging executed through met itself.

Speaker Change: Channel partners that were historically recognized on a gross basis, but now will be recognized on a net basis as a consequence of this gross to net accounting treatment, we adjusted our revenue target and anticipate revenue to reach at least $100 million for 2024.

Speaker Change: Importantly, this suggests that maintains our bottom line and in fact enhances our margin profile. Therefore, our adjusted EBITDA guidance remains unchanged standing at at least 11 million for 2024.

William J. Febbo: We believe the macroeconomic and competitive challenges we identified in 2022 and 2023 are returning to normal. In particular, we're witnessing encouraging momentum as our clients that have initiated pilot programs with newly established entrants in our field over the past two years are concluding the assessments of these programs and, as anticipated, are finding that these perceived competitive solutions lack scalability and the ability to adequately report information back to customers, ultimately driving spending back towards our offer. Before proceeding, I'd like to express my sincere gratitude to the OPTIMIZERx team for their unwavering dedication and relentless pursuit of our mission. Over the past few years, our collective efforts have led to the development of one of the most scalable solutions in the industry, tailored specifically for pharmaceutical marketers. We've recently expanded this initiative to include a highly impactful BTC component. This journey hasn't been without its challenges.

Speaker Change: We believe the macroeconomic and competitive challenges we identified in 2022 and 2023 are returning to normal in particular, we're witnessing encouraging momentum as our clients that have initiated pilot programs with newly established entrance in our field over the past two years are concluding the assessments.

Speaker Change: These programs stand anticipated are finding that these perceived competitive solutions lack scalability and the ability to adequately report information back to customers ultimately driving spending back towards our offerings.

None: Before proceeding I'd like to express my sincere gratitude to the optimize our X gene for their unwavering dedication and relentless pursuit of our mission over the past few years, our collective efforts have led to the development with one of the most scalable solutions in the industry tailored specifically for pharmaceutical marketers.

None: We've recently expanded this initiative to include a highly impactful DTC component.

None: This journey hasn't been without its challenges navigating through the dynamic landscape as the industry shifts and embracing early digital advancements has been no small task, yes, optimizer access achievements stand as a testament to our resilience enforce it fundamentally reshaping the dynamics of engagement between pharma pace.

William J. Febbo: Navigating through the dynamic landscape of industry shifts and embracing early digital advancements has been no small task, yet OPTIMIZERx's achievements stand as a testament to our resilience and foresight, fundamentally reshaping the dynamics of engagement between pharma, patients, and prescribers. As previously mentioned, in September of last year, we introduced a significant enhancement to our omni-channel healthcare engagement platform, known as DAPT. This pioneering AI-driven capability seamlessly integrates point-of-care and traditional digital media, offering a holistic solution for pharmaceutical markets.

None: And prescribers.

None: As previously mentioned in September of last year, we introduced a significant enhancement to our omni channel health care engagement platform known to staff.

None: This pioneering AI driven capabilities seamlessly integrates point of care and traditional digital media offering a holistic solution for pharmaceutical market.

William J. Febbo: The unveiling marked the culmination of years dedicated to the understanding of how AI can augment OPTIMIZERx's customer use cases, resulting in a transformative journey for our HCP engagement platform. Building upon our existing technology, we have extended the AI-driven platform reach to compass social media, web display channels, and CRM alerts, which fosters greater efficiency in collaboration with our customers' Salesforce. Since then, we've expanded these capabilities to now also encompass the DTC channels utilized by MedEx Health, which include streaming and connected TV, as well as various digital channels such as display, audio, online video, and mobile, among others.

None: The unveiling marks the culmination of years dedicated to the understanding of how <unk>.

None: I can augment optimize our axis customer use cases, resulting in a transformative journey for our HCP engagement platform.

None: Building upon our existing technology, we have extended the AI driven platform reach corpus social media web display channels, and CRM alerts, which fosters greater efficiency to collaboration with our customer sales forces.

None: Since then we've expanded these capabilities to now also encompass the DTC channels utilized by excel that includes streaming connected TV as well as various digital channels, such as display audio online video and mobile among others.

William J. Febbo: We're encouraged by this timely enhancement as we've already witnessed early initial cross-selling success with DAP in the short time since we consummated the acquisition. We will update everyone regarding our DAP cross-selling efforts in our Q1 earnings call early. DAF advances our land and expand strategy, enabling clients to gain maximum market penetration through the scaling of outreach in real time across the company's network of over 2 million HCPs and 240 million U.S. adults across multiple major digital media channels and at the point of care via EHRs, e-prescribing, and telehealth platforms. With this, OPTIMIZERx has evolved into one of the most comprehensive digital healthcare marketing platforms in the nation.

None: We're encouraged by this timely enhancement as we've already witnessed early initial cross selling success with that in the short time since we consummated the acquisition.

None: We will update everyone regarding our DAP cross selling efforts in our Q1 earnings call in Raleigh.

None: Death advances, our land and expand strategy, enabling clients to gain maximum market penetration through the scaling of outreach in real time across the company's network of over 2 million H C. PS 240 million U S. Adults across multiple major digital media channels and at point of care.

None: Chars E prescribing and telehealth platforms.

None: With this optimizer acts as a volatile too one of the most comprehensive digital health care marketing platforms in the nation.

William J. Febbo: This evolution firmly aligns with current pharma trends as the industry is moving a greater portion of its commercial spend towards omnichannel digital solutions while looking for these solutions to deliver more impactful results by not only identifying patients known to HCPs but also pinpointing new patients for their therapy. We continue to believe smarter solutions such as our DAP offering will capture the lion's share of the pharma spend, particularly with legacy commercial dollars that are reallocated to digital. We believe early proof of this trend is clearly highlighted by the 4x year-over-year increase in DAP deals seen in 2023. DAPR represents a transformative leap for us, transitioning us from being a mere tactical player within the pharmaceutical industry to a formidable strategic partner.

None: This evolution firmly aligns with current pharma trends as the industry is moving to a greater portion of their commercial spend towards omni channel digital solutions.

None: Looking for these solutions to deliver more impactful results by not only identifying patients known to Hcp's, but also pinpointing new patients for their therapies.

None: We continue to believe smarter solutions, such as our DAP offering captured.

None: Capture the lion's share of the pharma spend particularly with legacy commercial dollars that are reallocated to digital we believe early proof of this trend is clearly highlighted by the forex year over year increase in that <unk> seen in 2023.

None: That represents a transformative leap for us transitioning us from being a mere tactical player within the pharmaceutical industry to a formidable strategic partner.

William J. Febbo: This shift affords us the invaluable advantage of garnering top-down support from decision-makers while also securing revenue streams with greater durability, enhanced margins, and amplified growth prospects. These pivotal developments are reinforcing my level of excitement regarding our strategic position. I anticipate that the collective impact of our initiatives outlined today could yield substantial dividends over the next three to five years, catapulting our revenue to multiples of its current standing. As we diligently pursue our land and expand strategy, we continue to reap the rewards of delivering superior return on investment, maintaining our impressive ROIs of over 10 to 1 for HCP messengers. This achievement holds particular significance in the pharmaceutical landscape, where achieving ROIs of two to three times spent has traditionally been the benchmark.

None: This shift affords us the invaluable advantage of garnering top down support from decision makers, while also securing revenue streams with greater durability enhanced margin and amplified growth prospects.

These pivotal developments are reinforcing my level of excitement regarding our strategic positioning.

None: I anticipate that the collective impact of our initiatives outlined today good yield substantial dividends over the next three to five years catapulting, our revenue to multiples of its current standing as we diligently pursue our land and expand strategy. We continue to reap the rewards of delivering superior return on investment maintained.

None: Our impressive rois of over 10 to one for HCP messaging.

None: This achievement holds particular significance with the pharmaceutical landscape, we're achieving rois of two to three times spend has traditionally been the benchmark.

None: We believe we turned a significant corner in recent months and have incredible momentum going into 2024 and with that I'd like to turn the call over to our CFO, Ed <unk>, who will walk us through our financial details.

Edward Stelmakh: We believe we have turned a significant corner in recent months and have incredible momentum going into 2024. And with that, I'd like to turn the call over to our CFO, Ed Stelmakh, who will walk us through our financial details. Thanks, Will, and good morning, everyone.

Ed: Thanks will and good morning, everyone.

Edward Stelmakh: As noted previously, a transcript and a link to an audio recording of this conference call will be provided on the investors section of the company's website. Fourth quarter revenue came in at $28.4 million, an increase of 44% from the $19.7 million we recognized during the same period in 2022. This included revenues from our legacy core and non-core business lines, as well as from approximately two months of Medix Health-related revenue streams. Going forward, we will be reporting both OPTIMIZERx and MedixHealth as one consolidated business.

Ed: As noted previously a transcript and a link to an audio recording of this conference call.

Ed: Will be provided on the investors section of the company's website.

Ed: Fourth quarter revenue came in at 28 4 million in <unk>.

Ed: Greece, a 44% from the.

Ed: In 19.7 million recognized during the same period in 2022.

This included revenues from our legacy core and noncore business lines as well as from approximately two months of medics calix related revenue streams.

Ed: Going forward, we will be reporting both asking my direct and medics health.

Ed: Once consolidated business.

Edward Stelmakh: Meanwhile, our previous non-core business lines, which we have called access and patient engagement, will no longer be revenue streams for the company, and we have eliminated associated costs. On a pro-forma basis, when stripping out these non-core business lines from our 20, 23-year-old, and accounting for the full year benefit of Medix Health's financial results in our 2023 Actuals, our revenue for calendar year 2023 would have been approximately $91.8 million, which we are utilizing as our comparison point to chart progress going forward. Meanwhile, our net loss came in at $7.2 million for the fourth quarter of 2023, compared to a loss of $0.3 million during the fourth quarter of 2022.

Ed: Meanwhile, our previous non core business lines.

Ed: You have call it access and patient engagement.

Ed: Well no longer be a revenue stream for the company.

Ed: And we have eliminated associated costs these business lines.

Ed: On a pro forma basis, when stripping out these noncore business lines for March 20th when you see the results.

Ed: Accounting for the full year benefit of Mexico financial results 2020 to be actual is.

Ed: Our revenue for calendar year 2023.

Ed: It's been approximately a 91.8 million, which we are utilizing as a comparison point Chuck progress going forward.

Ed: Meanwhile, our net loss came in at 7.2 million for the fourth quarter of 2023.

Ed: To a loss of <unk> 3 million during the fourth quarter of 2022.

Edward Stelmakh: Our adjusted EBITDA came in at $5.8 million for the fourth quarter of 2023, compared to $3.9 million during the fourth quarter of 2022. The GAP to non-GAP reconciliation table has been included in the Investor Relations section of our website, at investors.optimizerx.com, in the events and presentations folder. We ended the year with cash and short-term investments totaling $13.9 million as of December 31st, 2023, as compared to $74.1 million on December 31st, 2022. The majority of the year-over-year decline was due to our acquisition of Medix Health and Share Repurchase Program, through which we bought back $526,999 shares of common stock for $7.5 million during 2023. Our current debt balance currently stands at $38.3 million.

Ed: Our adjusted EBITDA came in at 5.8 million for the fourth quarter of 'twenty to 'twenty three.

Ed: <unk>.

Ed: Comparison viewpoint 9 million during the fourth quarter of 'twenty to 'twenty two.

Ed: The GAAP to non-GAAP reconciliation table that had been included in the Investor Relations section of our website.

Ed: There's that optimizer X dot com in the events and presentations folder.

Ed: We ended the year with cash and short term investments totaling 13.9 billion as of December.

Ed: 31st 'twenty to 'twenty, three that's going to be.

Ed: Just how many of $4 1 million on December 31st.

Ed: The majority of the year over year decline was due to our acquisition of medics Coke.

Ed: Share repurchase program.

Ed: So wished we bought back 526999 shares of common stock for $7 5 million during 2020.

Ed: Great.

Ed: Our current debt balance currently stands at $38 3 million.

William J. Febbo: Recall, to help fund the $83.9 million cash portion of the Medixcals transaction, the company took on $40 million in debt financing, and we paid off $1.7 million of principal during the fourth quarter. We continue to believe we're well-funded to execute against their operational goals. And with that, I would like to turn the poll back over to Will. Will?

Ed: Recall to help fund the $83 9 million cash portion of.

Ed: The medic Scott transaction.

Ed: The company took on $40 million in debt financing and we paid off one 7 million of principal.

Ed: During the fourth quarter.

Ed: We continue to believe we are well funded to execute against their operational goals.

Will: And with that I would like to turn the call back over to will well.

Operator: Thanks, Ed. Operator, now we'll move to Q&A. Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your questions from the queue.

William J. Febbo: Thanks, Ed operator, now, let's move to Q&A.

William J. Febbo: Okay.

William J. Febbo: Well now be conducting a question and answer session.

William J. Febbo: To ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.

William J. Febbo: Star two if you'd like to remove your questions in the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star.

Sean Wilfred Dodge: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star 2. One moment, please, while we poll for questions. Thank you. Our first question is from Sean Dodge with RBC Capital Markets. Thanks, good morning, and congratulations on the strong finish to the year. You signed, Will, you said 24 death deals in 23.

William J. Febbo: One moment, please while we poll for questions.

William J. Febbo: Thank you. Our first question is from Sean Dodge with RBC capital markets. Please proceed with your question.

Sean Wilfred Dodge: Yes. Thanks.

Sean Wilfred Dodge: Good morning, and congratulations on the strong finish to the year.

Sean Wilfred Dodge: You signed a well you said 24 DAP deals in in 'twenty three that was up.

William J. Febbo: That was up 4x, four times versus the previous year. So lots of momentum there. I guess anything you can share on how demand or activity around those has carried into this year? You had mentioned some macro headwinds before. Have those continued to dissipate?

Sean Wilfred Dodge: Forex are four times versus the previous year, so lots of momentum there I guess anything you can share on how.

Sean Wilfred Dodge: Demand or activity around those have carried into this year you had mentioned some macro headwinds before those continued to dissipate.

William J. Febbo: Hey, Sean. Yeah, thanks. So yeah, on macro, for sure.

Hey, Sean Yes, thanks, yes on macro for sure we're seeing sort of a return to what we saw in in 'twenty. One in terms of our clients, making decisions flow seasonality all of that good stuff FDA approvals all tracking towards previous dip.

William J. Febbo: We're seeing sort of a return to what we saw in 21 in terms of our clients making decisions flow, seasonality, all that good stuff, FDA approvals, all you know, tracking towards the previous dip. And yeah, we'll obviously talk about Q1 in May. Yeah, it's really resonating with the clients, I think they've talked a lot about it. Clients are really the adoption of digital has also forced the adoption of Accuracy Reporting, data-driven outreach, less is more if it's effective. And we're in the right place at the right time there with this innovative approach. So yeah, continued adoption.

Sean Wilfred Dodge: And yes, the well, we'll obviously talk to Q1 in May but yes.

Sean Wilfred Dodge: Yes.

Sean Wilfred Dodge: It's really resonating with the clients I think we talked a lot about it after the Q3.

Sean Wilfred Dodge: Port that.

Sean Wilfred Dodge: Clients are really the adoption of digital has also forced the adoption of accuracy reporting.

Sean Wilfred Dodge: Data driven outreach less is more if it's effective.

Sean Wilfred Dodge: And.

Sean Wilfred Dodge: We're in the right place at the right time there.

Sean Wilfred Dodge: Native approach so yeah.

None: Yes continued continued adoption and Steve just to say a couple of top level words on sale.

Stephen L. Silvestro: And Steve, just to say a couple of top level words on sales training and such, but very positive momentum and really encouraged by the team's ability to deliver in a way that the clients respond to and in a way that's efficient around digital. Yeah, happy to. Hey, Sean, good to hear from you.

None: Sales training and such but.

None: Very positive momentum and are really encouraged by the team's ability to deliver in a way that the clients respond to the discussion around digital Steve you want to just chime in a little bit.

Steve: Yeah happy to Hey, Sean good to hear you.

Stephen L. Silvestro: I think one of the other things that's been really encouraging is that the initial set of gap deals that we did previously have renewed, and those same set of clients have expanded. So I think that's also a positive confirmation of value proposition and what we're delivering to those clients, Sean. So that lend and expand strategy that we talked about previously is really coming to fruition. And I think, as Will highlighted, the team's ability to get a little bit more technical and approach the client in a different way makes the sales slightly different, right? It's more of a much more strategic sale in that you're having a conversation around patient profiles and strategies, a little bit more mature than we would have had in times past. So, really encouraged by that. And I think that makes it significantly more sticky.

Steve: I think one of the other things that's been really encouraging is that the initial set of GAAP deals that we did previously have renewed and those same set of clients have expanded so I think that's also a positive contribution on value prop and what we're delivering to those client Sean so that land and expand strategy that we've talked about previously is really key.

Steve: [noise] fruition and.

Steve: And I think as well highlighted the team's ability to get a little bit more technical and approach the client in a different way that the sales slightly different right. It's more of a much more of a strategic sale and that you're having a conversation around patient profiles and strategies.

Steve: A little bit more mature.

We would have had in times past, so really encouraged by that and I think that makes it significantly more sticky and as Bill said, we will have more positive news to share during Q1, but.

William J. Febbo: As Will said, we'll have more positive news to share during Q1, but I'm really encouraged by what we're seeing on the gap. And that's a good segue into my follow-up. Will, you in your prepared remarks talked about the omnichannel and kind of trends within big pharma. You've done the medic acquisition that adds a lot of, you know, nice breadth for you when we think about the kind of omni channel. Do you have everything you need there now?

Steve: Really encouraged by what we're seeing on the DAP front.

None: And that's a that's a good segue into my follow up will you you in your prepared remarks talked about omni channel and kind of trends within big pharma.

None: You've done the medic acquisition that adds a lot of <unk>.

None: Nice breadth for you when we think about kind of Omnichannel did you have everything you need there now or are there other areas or capabilities do you think could make sense to bolt on in the future.

William J. Febbo: Are there other areas or capabilities you think could make sense to bolt on in the future? So yeah, I would say, look, we have no major CapEx. We've got the technology that can enable what we're doing, and we're constantly looking at different types of channel partners. And I think, Sean, that'll be an evolution pretty much every year because there's just so much changing so fast about the way doctors and patients interact with their own medical records, with their own doctors and caregivers.

None: So yeah I would say look we have no major capex you know we've got the tech that can enable what we're doing we're constantly looking at different types of channel partners and I think John that it'll be an evolution pretty much every year.

None: Because there's just so much changing so fast the way doctors and patients interact with their own medical records with their own doctors with their caregivers and so.

William J. Febbo: And so, luckily for us, we have a team, and that was enhanced with part of the medics team as well, that's completely focused on the channel. And, you know, omni-channel is really something that shifts with the needs, right? It's not a stagnant thing. You don't sort of get there, and you're done; it constantly evolves.

None: Luckily for US we have a team and that was enhanced with part of the <unk> team as well that is completely focused on channel and omni channel is really something.

None: That shifts with the needs right. It's not a stagnant thing you don't sort of get there and you're done it's it's constantly evolving.

Sean Wilfred Dodge: But the good news is we've got a lot of reach today that is highly relevant. It gives us growth, and we've got the team to keep their eye on the ball on what's next, enablement for communication. Okay, that's great color.

None: But the good news is we've got a lot of reach today that is highly relevant that gives us growth and and we've got the team to be keeping our eye on the ball on on what's next in terms of enablement.

None: For communication, but those hcp's and patients' and consumers' health.

None: Okay, that's great color.

None: And congrats again.

None: Thanks, Sean.

None: Thank you. Our next question is from Stephanie Davis with Barclays. Please proceed with your question.

Stephanie July Davis: Thanks and congrats again. Thanks, Sean. Thank you. The next question is from Stephanie Davis with Barclays. Please proceed with your question. Hey guys, thanks for taking my questions. Um, you're talking about trimming costs further, but you're also talking about a few different initiatives that wouldn't normally require some headcount investments, such as the Daplins and the Walmart partnership. Can you just walk us through how to think about that? Yeah, sure. Hey Stephanie.

Stephanie July Davis: Hi, guys. Thanks for taking my questions.

Stephanie July Davis: You're talking about trimming costs further, but you're you're talking about the failure of a few different initiatives I wouldn't normally require some head count investments such as that.

Stephanie July Davis: And then the Walmart partnership can you just walk us through how to think about that.

Yeah, sure Hey, Stephanie good to hear your voice.

None: So no there's not.

None: Yeah, I know right Greg.

None: Great conference by the way thank you.

None: So.

None: No we're not looking at additional cost or if that was just all message last year and we're just reminding everyone that we completed it.

None: The beauty of this model Stephanie is where it's a technology platform right. We don't we're not an agency we don't generate content.

William J. Febbo: Good to hear your voice. It's been a long time since we talked. We help our clients get the content that they've already generated to the right people at the right time, whether that's a doctor or patient. So we are, additional people this year will be commercially focused. And also, just as a public company, you know, having more heft as we get over $100 million in revenue. And then, as we've discussed before, on the reporting side, that's a key piece now that... Adopted, Point of Care, Digitally as a Channel. All the standards go up, and need to go with it, as well as measurement. So now this is a very scalable model.

None: Help our clients get the content that they've already generated to the right people at the right time when does that's a doctor of patients. So where we are additional people this year will be commercially focused.

None: And also just as a public company, having more heft as we get over $100 million in revenue.

None: And then as we've messaged before on the reporting side, that's a key piece now.

None: Pharmaceutical companies have adopted point of care digitally as a channel.

All of the standards go up and transparency needs to go with it as well as measurement so.

None: This is a very scalable model, we've shown it before in past years, even as a smaller company that investors go back and look and I think well see that as we progress through the year.

William J. Febbo: We've shown it before in past years, even as a smaller company, if investors go back and look. I think they'll see that as we progress. Awesome. I do have to ask because we have seen a public peer go through some issues when delaying their reporting.

None: Awesome I do have to ask because we have seen a public peer go through some issues from the rain that recording.

Stephanie July Davis: How should we think about the cost associated with that? Because there usually is a little bit more accounting cost and, you know, some management attention, if you will, when that happens. Yeah, no problem.

None: How should we think about the cost associated with that because they usually get a little bit more.

None: Accounting costs and you know some some management attention, okay, well when that happens.

None: Yeah No problem. Yeah. We you know we did a lot last year.

William J. Febbo: Yeah, we did a lot last year. And again, as I said in my prepared remarks, I'm super proud of the team because, for a small company, it's no small feat to buy one, out-license some tech, and simultaneously see your core starting to grow, which, you know, you believe, but when it happens, it happens fast. And as we've said, all that, coupled with reviewing material weaknesses, we have a remediation plan for 2024. Everything's just taking longer.

None: And again as I said in my prepared remarks, I'm Super proud of the team because for a small company.

None: It's no small feat to buy one out license in tact and and simultaneously see your core starting to grow which you know your beliefs, but it's when it happens it happens fast.

None:

None: And as we said all of that.

None: Coupled with reviewing material weakness that we have a remediation plan for 2024 and everything is just taking longer so yes, there'll be some incremental costs.

William J. Febbo: So yeah, there'll be some incremental costs for third-party assistance on the acquisition stuff. But a lot of the cost was already rolled into the acquisition cost. And once we actually file, people will see that. So I wouldn't anticipate a ton, but there will be some additions. Good to hear. Good luck with the sprint. Thank you. Talk to you soon, Stephanie. As a reminder, if you'd like to ask a question, please press star 1.

For third party assistance on the acquisition stuff a lot of the cost is already rolled into the acquisition.

None: And once we once we actually file.

None: We'll see that so I wouldn't anticipate a ton.

None: But there will be some additional.

None: Good to hear good luck with this brand.

None: Thank you Dr <unk>.

None: As a reminder, if you'd like to ask a question. Please press star one.

William J. Febbo: Our next question is from William Wood with B Riley Securities. Please proceed with your question. Thanks so much, and congratulations on a nice fourth quarter.

None: Our next question is from William <unk> with B Riley Securities. Please proceed with your question.

William: Thanks, so much and congratulations on a nice fourth quarter.

William J. Febbo: Just a couple from us. I was just kind of curious, wanted to dig in a little bit more to the DAP expectations, the DAP growth expectations for this year. You obviously noted 24 at the close of next year. You know, should we be thinking about this growth for this year in terms of the number of deals, as well as, you know, maybe potentially commenting on pharma partners that you already sort of have in the queue to sign up for this year? Yeah, we don't want to get sick, it's good to hear your voice.

William: Just a couple from US we've just kind of curious wanted to dig in a little bit more to the DAP expectations the debt growth expectations for this year. You. Obviously noted 24 at the close of the next year you know should we how should we be thinking about this growth for this year in terms of the number of deals.

William: As well as you know maybe potentially commenting on.

William: Pharma partners that you already sort of have been in the Q2 to sign up for the year.

None: Yeah, we don't want to get well, it's good to hear your voice, we don't want to get too far ahead, because we're going to report.

Basically a month or so in Q1, but very positive momentum, we'll give an update on the you know the close as we've seen in Q1.

William J. Febbo: We don't want to get too far ahead because we're going to report, www.youtube.com or www.facebook.com, 100% of which renewed from the 2, 2 went into the 6, and the 6 went into the 24. And we're really seeing cases across multiple therapeutic areas and also different needs by the client. And I think what's going to be most encouraging when we talk about it is just seeing how this can now apply to the DTC part of it. Because their method is spectacular around creating micro-neighborhoods, but when you can layer in that with the algorithm, it really, the two together, first of all, simplify life for our clients, we think increase the quality of outreach and will certainly drive better. Prescription Lift

None: But we don't want to get ahead of that.

None: But I, just I think what's telling and what Steve mentioned as we went from 2% to 6% to 24.

None: 100% of which renewed from the two two and into the six six went into the 'twenty four.

And now we're really seeing cases across multiple therapeutic areas and also different needs by the client.

None: And I think what's gonna be most encouraging when we talk about it as just seeing how this can now apply to the D. T C part of our business.

None: Because theyre method was is spectacular around creating micro neighborhoods, but when you can layer in.

None: That was.

None: With the algorithm it really the two together.

None: First of all simplifies life for our clients, we think increases quality of outreach and will certainly drive better prescription lift so.

William J. Febbo: So stay tuned; I can't give you any hard numbers but really positive momentum year-over-year and certainly... Appreciate that, that's very helpful. In terms of your medics, you mentioned that they were almost complete or near completion. I'm just curious when we should be expecting for that to complete. You know, is it a month timeline or is it six, you know, longer, slightly longer term?

None: Stay tuned can't give you any hard numbers, but.

None: It's really positive momentum year over year, and certainly what we're seeing initially.

None: I appreciate that that's very helpful. In terms of your your medicine.

None: Medics.

None: You mentioned that it was almost complete or near completion I was just curious when we should be expecting for that to complete.

None: Is it months timeline or is it six you know longer slightly longer term and then how should we think about that actually.

William J. Febbo: And then how should we think about that as actually, you know, as adding to the growth and the expectations for 2024? Yeah, so we've got a pretty seasoned team with Ed, Steve, Marion, and myself. Below us, a lot of us have done acquisitions; we tend to be pretty conservative in the first year. And I will say the process of integration was really well run at Stelmakh; our CFO set up a particular office to do that. And all the major stuff is done, and now it's just fine-tuning, and then it's just operations. I think the part that, on the commercial side, which is where the growth can come from, to your question, we did a great training session in January with both teams together. I was there as well.

None: Adding to the growth.

And the expectations for 2020 for coming.

None: Yeah, So we've got a pretty seasoned team.

Ed, Steve Marriott and myself and the whole team allow us a lot of us have done acquisitions, we tend to be pretty conservative on the first year.

None: And I will say the process of integration it was really well run ads at stomach, our CFO and CMO setup, a particular office to do that.

None: And all of the major stuff is done and now it's fine tuning and then it's just operations.

None: I think the part that on the commercial side, which is where the growth can come from to your question. We did a great training in January and both teams together.

William J. Febbo: The entire senior team was there. And I think that was really brilliant. It just brought together, first of all, people that already work together. They've gone through the knife fight of digital spend before. It was cool. And then they also got their heads around what DAP is.

None: There as well with the entire senior team was there.

None: And I think that was really brilliant it just brought together first of all people that already work together.

None: I've gone through the knife fight of digital spend before it was cool.

None: And then also got their head around what the gap is so.

William J. Febbo: So we're really excited about that. And in Q1, we can give a little bit more color in terms of DAP's contribution to growth, and percentage of overall revenue. Got it. Appreciate that. And one last quick one.

None: We're really excited about that and in Q1, we can give a little bit more color.

None: In terms of gaps contribution growth percentage of overall revenue is that kind of thing, but we'll be there soon enough.

None: Got it appreciate that and then one last quick one.

William J. Febbo: Could you remind me what MEDx gross margins were and or historically have been and then how you would expect those to sort of integrate into OPTIMIZERx and, you know, what the outlook for the future is on how we should expect those to integrate? Thank you. Do you want to?

None: Could you remind me what the what our medics gross margins were and or historically have been and then how you would expect those to sort of integrate in and to optimize our axes and how.

None: The outlook for the future on how we should expect those to integrate.

<unk>.

None: Sure Ed do you want to take that.

Edward Stelmakh: Yes. Hey, William. Yeah, so the margins for medics, I think they were just closed for Q1, Q2, so you can look at those filings. As far as full-year margins are concerned, as we said before, we're not going to be squinting at their numbers.

None: Yes.

None: William.

William: So the margins for medics.

Ed: During this lower for Q1 Q2, we're taking a look at those filings as far as full year margin is concerned as we.

I said before we're not going to risk weighting out their numbers were pretty much now a fully integrated business.

Edward Stelmakh: We're pretty much now a fully integrated business. So the margins are all baked into our current guidance, which is one company. Understandable. Thank you for taking our questions. Yep, no problem.

Ed: So the margins are all baked into our current guidance.

Ed: As one company.

None: Understood. Thank you for taking my questions.

None: Yeah no problem.

Operator: Thank you. There are no further questions at this time. I'd like to hand the floor back over to William Febbo for any closing comments. All right, thank you, operator. And thank you everyone for joining us today.

None: Thank you there are no further questions at this time I'd like to hand, the floor back over to William Cabo for any closing comments.

William J. Febbo: Alright, Thank you operator, and thank you everyone for joining US today I Trust you share in our excitement and can proceed the positive momentum we built throughout the second half of 2023.

William J. Febbo: I trust you share in our excitement and can perceive the positive momentum we've built throughout the second half of 2023 and now into year 24. As we embark on our financial and operational journey for the year ahead, I'm pleased to say that we are stepping into this new chapter on solid ground. Our reach with healthcare professionals and patients has undergone a remarkable expansion thanks to our proprietary AI models.

William J. Febbo: And now into 'twenty four.

William J. Febbo: As we embark on our financial and operational journey for the year ahead I am pleased to say that we are stepping into this new chapter on solid ground.

William J. Febbo: Our reach with health care professionals and patients has undergone a remarkable expansion. Thanks to our proprietary AI models. This has allowed us to overcome many of the challenges. We faced previously today, we proudly offer a comprehensive solution.

William J. Febbo: This has allowed us to overcome many of the challenges we faced previously. Today, we proudly offer a comprehensive solution that seamlessly integrates various elements into a powerful agile strategy. These strategies address critical challenges, such as brand awareness and education affordability.

William J. Febbo: Seamlessly integrates the various elements into the powerful agile strategies. These strategies address critical challenges such as brand awareness and education affordability and the recruitment of hard to find patients.

William J. Febbo: [inaudible] These are the very issues our clients, doctors, and patients encounter daily. We are honored to be part of this, and commitment to generally aiding doctors and patients in aligning care is what truly drives us. Thank you for your time today, and I eagerly anticipate our upcoming discussion on next quarter's... Wishing you all a fantastic remainder of the day. Thank you, operator. Thank you, sir.

William J. Febbo: These are the very issues, our clients doctors and patients encountered daily in today's health care landscape and we are honored to be part of the solution.

William J. Febbo: Our commitment to generally aging doctors and patients and aligning on care is what truly drives us as a team.

Thank you for your time today and eagerly anticipate our upcoming discussion on next quarter's earnings call wishing you all fantastic remainder of the day. Thank you operator.

Thank you Sir before we conclude today's call I would like to provide the Companys Safe Harbor statement that includes cautions regarding forward looking statements made during today's call Dave.

Operator: Before we conclude today's call, I would like to provide the company's safe harbor statement that includes 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 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 on the date that such statements are made.

None: 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 of the Securities Act of 1934 as amended these forward looking statements should not be made should not be used to make investment decisions.

None: The words anticipate estimate expect possible and seeking and similar expressions identify forward looking statements.

None: They may speak only to the date such statements are made.

Such forward-looking statements in this call include statements regarding the estimation of the total addressable market size, market penetration, revenue growth, gross margin, operating expenses, profitability, cash flow, technology, investments, growth opportunities, acquisitions, and upcoming analysis. They also include 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, 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... The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, the effects of government regulation, competition, and other material factors that could affect business and financial results are included in the company's annual report on Form 10-K for the quarter ended December 31, 2020.

None: 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 opportunities acquisitions upcoming announcements.

None: It also include managements expectations for the rest of the year.

None: Company undertakes no obligation to publicly update or revise any forward looking statements, whether because of new information future events or otherwise.

None: 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 and contemplated by or underlying these forward looking statements.

None: Risks and uncertainties to which forward looking statements are subject to include but are not limited to the effects of government regulation competition and other material.

None: Risks and uncertainties to which forward looking statements are subject could affect business and financial results are included in the company's annual report on Form 10-K 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, starting later this evening, running through for a year, and a transcript and a link to an audio recording of this conference call will be provided in the investor section of the company's website. Thank you for joining us today. This concludes today's conference call. You may now disconnect your line.

None: This form is available on the company's website and on the SEC website at SEC Gov.

None: 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 year and a transcript and a link to an audio recording of this company of this conference call will prove to provided on the investors section of the company's website.

None: Thank you for joining US today. This concludes today's conference call you may now disconnect your lines.