OptimizeRx Corporation: OptimizeRx Reports First Quarter 2023 Financial Results

• Total revenue of $13.0 million
• GAAP net loss per share of $(0.37)
• Non-GAAP net loss per share of $(0.09)
  

ROCHESTER, Mich., May 10, 2023 (GLOBE NEWSWIRE) -- OptimizeRx Corp. (the "Company") (Nasdaq: OPRX), a leading provider of point-of-care technology solutions helping patients start and stay on therapy, reported results for the three months ended March 31, 2023. Quarterly comparisons are to the same year-ago period.

Financial Highlights

• Revenue in the first quarter of 2023 decreased 5% to $13.0 million, as compared to $13.7 million in the same year ago period.
• Gross profit in the first quarter of 2023 decreased 8% year-over-year to $7.4 million, from $8.1 million during the first quarter of 2022.
• GAAP net loss totaled $(6.4) million or $(0.37) per basic and diluted shares outstanding in the first quarter, as compared to $(3.8) million or $(0.21) during the first quarter of 2022.
• Non-GAAP net loss in the first quarter totaled $(1.6) million or $(0.09) per fully diluted shares outstanding, as compared to $(0.1) million or $(0.01) per fully diluted shares outstanding during the first quarter of 2022 (see definition of this non-GAAP measure and reconciliation to GAAP, below).
• Cash, cash equivalents and short-term investments totaled $73.7 million as of March 31, 2023 as compared to $74.1 million as of December 31, 2022.
  

Will Febbo, OptimizeRx CEO commented, "We've had a solid start to the new year and our execution remains on pace to meeting our 2023 financial and operational objectives. These goals are 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 our growing network. Our full offering is highly differentiated and we believe our reach, proprietary Real-World Data Artificial Intelligence (RWD.AI) solution set, focus on accessing physicians across multiple landing pads, and ability to efficiently scale while being able to report back data, provides us with a significant competitive edge. We look forward to transforming the marketplace and making a positive impact across our pharma, prescriber and patient stakeholder base."

	Rolling Twelve Months Ended March 31,
Key Performance Indicators (KPIs)*		2023				2022
Average revenue per top 20 pharmaceutical manufacturer	$	1,993,755			$	2,614,054
Percent of top 20 pharmaceutical manufacturers that are customers		90	%			90	%
Percent of total revenue attributable to top 20 pharmaceutical manufacturers		58	%			74	%
Net revenue retention		86	%			124	%
Revenue per average full-time employee	$	605,113			$	733,275

2023 Financial Outlook
The Company is reaffirming its full year financial outlook for fiscal 2023 for net revenue to increase at least 10% year-over-year, and gross margins to be between 58% and 62%.

Conference Call
OptimizeRx management will host the presentation, followed by a question-and-answer period.

Date: Wednesday, May 10, 2023
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-888-886-7786
International dial-in number: 1-416-764-8658
Conference ID: 54210852
Call Me Link: https://emportal.ink/41EWFJO
Webcast Link: https://viavid.webcasts.com/starthere.jsp?ei=1612255&tp_key=f4c15a1272

Please call the conference telephone number five minutes prior to the start time.

A replay of the call will remain available for 12 months via the Investors section of the OptimizeRx website at www.optimizerx.com/investors.

Definition and Use of Non-GAAP Financial Measures
This earnings release includes a presentation of non-GAAP net loss and non-GAAP net loss per diluted share or non-GAAP EPS, both of which are non-GAAP financial measures.

The Company defines non-GAAP net loss as GAAP net loss with an adjustment to add back depreciation, amortization, stock-based compensation, acquisition expenses, income or loss related to the fair value of contingent consideration, and deferred income taxes. Non-GAAP EPS is defined as non-GAAP net loss divided by the number of weighted average shares outstanding on a diluted basis. The Company has provided non-GAAP financial measures to aid investors in better understanding its performance. Management believes that these non-GAAP financial measures provide additional insight into the operations and cash flow of the Company.

Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a Company's non-cash operating expenses, management believes that providing non-GAAP financial measures that exclude non-cash expenses allows for meaningful comparisons between the Company's core business operating results and those of other companies, as well as provides an important tool for financial and operational decision making and for evaluating the Company's own core business operating results over different periods of time.

The Company's non-GAAP net loss and non-GAAP EPS measures may not provide information that is directly comparable to that provided by other companies in the Company's industry, as other companies in the industry may calculate such non-GAAP financial results differently. The Company's non-GAAP net loss and non-GAAP EPS are not measurements of financial performance under GAAP and should not be considered as an alternative to operating income or as an indication of operating performance or any other measure of performance derived in accordance with GAAP. The Company does not consider these non-GAAP measures to be substitutes for or superior to the information provided by its GAAP financial results.

The table, "Reconciliation of non-GAAP to GAAP Financial Measures," included below, provides a reconciliation of non-GAAP net loss and non-GAAP EPS for the three months ended March 31, 2023 and 2022.

Definition of Key Performance Indicators*
Top 20 pharmaceutical manufacturers: We have updated the definition of "top 20 pharmaceutical manufacturers" in our key performance indicators to be based upon Fierce Pharma's most updated list of "The top 20 pharma companies by 2022 revenue". We previously used "The top 20 pharma companies by 2020 revenue". As a result of this change, prior periods have been restated for comparative purposes.

Net revenue retention: Net revenue retention is a comparison of revenue generated from all clients in the previous period to total revenue generated from the same clients in the following year (i.e., excludes new client relationships for the most recent year).

Revenue per average Full Time Employee: We define revenue per average full-time employee (FTE) as total revenue over the last 12 months (LTM) divided by the average number of employees over the LTM, which is calculated by taking our total number of FTEs at the end of the prior year period by our total FTE headcount at the end of the most recent.

About OptimizeRx
OptimizeRx provides best-in-class health technology that enables care-focused engagement between life sciences organizations, healthcare providers, and patients at critical junctures throughout the patient care journey. Connecting over 60% of U.S. healthcare providers and millions of their patients through an intelligent technology platform embedded within a proprietary digital point-of-care network, OptimizeRx helps patients start and stay on their medications.

For more information, follow the Company on Twitter, LinkedIn or visit www.optimizerx.com.

Important Cautions Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "anticipates", "believes", "estimates", "expects", "forecasts", "intends", "plans", "projects", "targets", "designed", "could", "may", "should", "will" or other similar words and expressions are intended to identify these forward-looking statements. All statements that reflect the Company's expectations, assumptions, projections, beliefs or opinions about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements relating to the Company's growth, business plans and future performance. These forward-looking statements are based on the Company's current expectations and assumptions regarding the Company's business, the economy, and other future conditions. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise, except as required by applicable law. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted, or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, the effect of government regulation, competition, and other risks summarized in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, its subsequent Quarterly Reports on Form 10-Q, and its other filings with the Securities and Exchange Commission.

OptimizeRx Contact
Andy D'Silva, SVP Corporate Finance
[e-mail]

Investor Relations Contact
Ashley Robinson
LifeSci Advisors, LLC
[e-mail]

OPTIMIZERX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

	March 31, 2023				December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	16,443,666			$	18,208,685
Short-term investments		57,258,234				55,931,821
Accounts receivable, net		18,164,687				22,155,301
Prepaid expenses and other		4,014,853				2,280,828
Total current assets		95,881,440				98,576,635
Property and equipment, net		143,924				137,448
Other assets
Goodwill		22,673,820				22,673,820
Technology assets, net		7,591,461				7,702,895
Patent rights, net		1,886,008				1,940,178
Right of use assets, net		213,324				235,320
Other intangible assets, net		3,302,563				3,384,889
Total other assets		35,667,176				35,937,102
TOTAL ASSETS	$	131,692,540			$	134,651,185
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable - trade	$	1,288,854			$	1,549,979
Accrued expenses		2,124,777				2,601,246
Revenue share payable		3,367,483				3,990,440
Current portion of lease liabilities		89,287				89,902
Deferred revenue		735,140				164,309
Total current liabilities		7,605,541				8,395,876
Non-current liabilities
Lease liabilities, net of current portion		123,227				144,532
Total liabilities		7,728,768				8,540,408
Commitments and contingencies (See note 9)
Stockholders' equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding at March 31, 2023 or December 31, 2022		-				-
Common stock, $0.001 par value, 166,666,667 shares authorized, 18,331,511 and 18,288,571 shares issued at March 31, 2023 and December 31, 2022, respectively		18,332				18,289
Treasury stock, $0.001 par value, 1,214,398 shares held at March 31, 2023 and December 31, 2022		(1,214	)			(1,214	)
Additional paid-in-capital		177,036,466				172,785,800
Accumulated deficit		(53,089,812	)			(46,692,098	)
Total stockholders' equity	$	123,963,772			$	126,110,777
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	131,692,540			$	134,651,185

The accompanying notes are an integral part of these condensed consolidated financial statements.

OPTIMIZERX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

	For the Three Months Ended March 31,
		2023				2022
Net revenue	$	13,002,910			$	13,731,530
Cost of revenues, exclusive of depreciation and amortization presented separately below		5,569,621				5,629,858
Gross profit		7,433,289				8,101,672
Operating expenses
General and administrative expenses		14,032,542			$	11,391,233
Depreciation, amortization and noncash lease expense		463,933				471,540
Total operating expenses		14,496,475				11,862,773
Loss from operations		(7,063,186	)			(3,761,101	)
Other income
Interest income		665,472				3
Loss before provision for income taxes		(6,397,714	)			(3,761,098	)
Income tax benefit		-				-
Net loss	$	(6,397,714	)		$	(3,761,098	)
Weighted average number of shares outstanding - basic		17,094,676				17,878,068
Weighted average number of shares outstanding - diluted		17,094,676				17,878,068
Loss per share - basic	$	(0.37	)		$	(0.21	)
Loss per share - diluted	$	(0.37	)		$	(0.21	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

OPTIMIZERX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

	For the Three Months Ended March 31,
		2023				2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(6,397,714	)		$	(3,761,098	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		463,933				471,540
Stock-based compensation		4,380,503				3,174,098
Increase in bad debt reserve		128,178				21,000
Changes in:
Accounts receivable		3,862,436				5,643,761
Prepaid expenses and other assets		(1,734,024	)			1,021,166
Accounts payable		(261,125	)			(6,079	)
Revenue share payable		(622,956	)			(1,202,497	)
Accrued expenses and other liabilities		(476,392	)			(1,184,784	)
Deferred revenue		570,831				(96,863	)
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES		(86,330	)			4,080,244
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of property and equipment		(28,580	)			(14,480	)
Purchases of held-to-maturity investments		(56,926,611	)			-
Redemptions of held-to-maturity investments		55,600,198				-
Acquisition of intangible assets, including intellectual property rights		-				(51,271	)
Capitalized software development costs		(193,901	)			-
NET CASH USED IN INVESTING ACTIVITIES		(1,548,894	)			(65,751	)
CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES:
Cash paid for employee withholding taxes related to the vesting of restricted stock units		(170,400	)			-
Proceeds from exercise of stock options		40,606				258,128
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(129,794	)			258,128
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(1,765,018	)			4,272,621
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		18,208,685				84,681,770
CASH AND CASH EQUIVALENTS - END OF PERIOD	$	16,443,667			$	88,954,391
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	-			$	-
Cash paid for income taxes	$	-			$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

OPTIMIZERX CORPORATION
RECONCILIATION of NON-GAAP to GAAP FINANCIAL MEASURES
(UNAUDITED)

	For the Three Months Ended March 31,
		2023				2022
Net loss	$	(6,397,714	)		$	(3,761,098	)
Depreciation and amortization		463,933				471,539
Stock-based compensation		4,380,503				3,174,098
Acquisition expense		-				17,160
Non-GAAP net loss		(1,553,278	)			(98,301	)
Non-GAAP net loss per share
Diluted	$	(0.09	)		$	(0.01	)
Weighted average shares outstanding:
Diluted		17,094,676				17,878,068