OptimizeRx Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 10, 2023

There are 12 speakers on the call.

Operator

Afternoon, everyone, and thank you for joining OptimizeRx's First Quarter Fiscal 2023 Earnings Discussion. With us today is the Chief Executive of OptimizeRx, Will Febbo. He is joined by company Chief Financial and Operating Officer, Ed Stelmack Chief Commercial Officer, Steve Silvestro General Counsel and Chief Compliance Officer, Marion Odins Ford and Senior Vice President Corporate Finance, Andrew D'Silva. At the conclusion of today's earnings call, some important cautions regarding the Forward looking statements made by management during today's call will be provided. I would like to remind everyone that today's call is being recorded and will be made available for replay via webcast only.

Operator

Instructions are included in today's press release 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. A reconciliation to comparable GAAP financial measures can be found in today's press release. Now I'd like to turn the call over to OptimizeRx's CEO, Will Febbo. Sir, please go ahead.

Speaker 1

Thank you, operator. Good afternoon, everyone, and thank you for joining our Q1 fiscal 2023 earnings call. Our first quarter results were in line with our expectations and revenue came in at $13,000,000 which was at the top end of our Q1 revenue guidance range of $11,500,000 to $13,000,000 As a result, we are maintaining our full year revenue outlook, which calls for our top line to increase at least 10% year over year. We believe executing against our guidance will also result in year over year improvements to our KPIs by the end of 2023. While the macro environment hasn't fully normalized, The industry trough appears to be behind us now and we continue to return to normalcy.

Speaker 1

This is the case despite the banking crisis that began to emerge at the end of Q1. And while there were some short term disruption with our customer base as top down focus moved towards understanding the potential macro overhang that was short lived. And by early in the second quarter, Pharma gained comfort by the resolutions that were implemented to address the fallout. We are seeing modest improvements to tactical sales, which if you recall was the portion of our business that was most impacted by the transitory macro headwinds we've discussed. We expect this part of our business continue to improve as the macros work themselves out and believe our reach 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.

Speaker 1

More importantly, our AI driven world load data or RWD AI offering continues to gain momentum and we are in late stage discussions for multiple deals and continue to believe revenue from this solution will increase at least 100% year over year and approached 20% of our total revenue for 2023. Our RWDAI pipeline is comprised of dozens of deals with a significant focus on top 200 brands. We view the progress and the types of discussions we're in as extremely positive for our growth, not just in 2023, but in the coming years as well. We believe this momentum is keeping us ahead of the pack as there are no other AI driven in workflow messaging solutions in the market. I'm extremely proud of our RWDAI solutions as it truly showcases our ability to innovate and effectively differentiate ourselves while driving actionable insights and better outcomes for pharma, HCPs and patients.

Speaker 1

We are now in our 2nd full year of having RWDAI solution in the market and have seen several examples of significant expansion and growth. For example, one client scaled from pilot to now several live programs representing our largest multiyear expansion to date of over $5,000,000 This expansion was unique and that it represented extending our solutions in 3 dimensions: Office of Disease, Channel Reach and Message Type, very exciting. Operationally, our technology investments, Partnerships and tuck in acquisitions have created a robust single shop omni channel offering, which has the ability to drive communications across multiple landing pads and is resulting in superior ROIs for the brands that we serve. We've also made tremendous progress in building on our industry reputation and expanding awareness of our solutions. Recall, 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 United States and are able to deliver digital solutions via the connectivity to prescribers.

Speaker 1

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 in the coming quarters years. Pharma is moving a greater portion of their more than $10,000,000,000 digital commercial spend towards omni channel 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 believe this bodes well for RWDAI as smarter solutions are what pharma is looking for as they continue to reallocate legacy commercial dollars to digital. We believe early proof of this trend is clearly highlighted by the momentum we are seeing with RWDAI despite this being a newer offering with a higher price tag.

Speaker 1

RWDAI has the added benefit of moving us from a tactical player with Pharma to a bigger strategic partner 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. As we mentioned in our last call, activity and outcome transparency requirements are continuing to gain importance at a rapid clip and is an area in which we will be investing this year. We view Pharma's focus on relevant insights very positively as it shows they are getting more serious within our space and are looking to quickly weed out vendors with limited scale as well as spray and pray campaigns. In fact, we believe these capabilities will increase our market and Tam, as we are the only platform that has integrated physician level engagement data across EHRs, display and social media, which provides a significant advantage over guiding engagement programs across multiple landing pads. By our estimates, the deeper insights that come from physician level data reporting will be the new normal for our space.

Speaker 1

Moreover, the level of insights that can be derived from digital campaigns today is something that was previously unattainable, which is why Pharma is embracing reporting in order to quickly catch up with the transformational best practices. And every day, we are witnessing the influence of insights from physician level data reporting affect additional investment spend of our customers. This new motivation to invest in a clear sign that pharma is taking digital health more and more seriously and is looking to establish standards as they continue to scale up investments in this space. Officer. Later this year, we expect to have completed an enhancement of our platform that allows for smart targeting through the use of AI on all programs, of the company's ability to effectively and efficiently utilize more landing pads and generate stronger ROIs.

Speaker 1

Of the company. This will further strengthen our platform, which when coupled with our reach, capabilities and the over 10:one ROI our customers obtain against their marketing spend creates a significant moat for our business. Finally, during the quarter, we closed a multimillion dollar 3 year agreement with a leading hub service company. Thus far, this is the largest deal of its kind for us and is tied to last year's acquisition of Eventsnet. The engagement is focused on determining drug eligibility and affordability and will help accelerate access to coverage and affordability information for pharma sponsored patient support program.

Speaker 1

And with that, I'd like to turn the call over to our CFO and COO, Ed Stalmark, who will walk us through the financial details for Q1. Ed?

Speaker 2

Thanks, Will, and good afternoon, everyone. As with all our calls, a press release was issued with the results of our Q1 ended March 31, of 2023. A copy is available for viewing and may be downloaded from the Investor Relations section of our website and additional information can be obtained through our forthcoming 10 Q, which will be filed in the coming days. Turning to our financial results for the period. Our revenue for the quarter was $13,000,000 a slight decrease from $13,700,000 recognized during the same period in 2022.

Speaker 2

The decrease in Q1 year on year revenues was due to the macro headwinds we have been communicating since they started the day hold in Q2 2022. Meanwhile, our gross margin decreased slightly from 59% in the quarter ended March 31, 2022 to 57.2% in quarter ended March 31, 2023, slightly below the lower end of our annual gross margin range. The decrease was due to solution and channel partner mix. We continue to expect gross margin to come in between 58% 62% in 2023. Our operating expenses increased from $11,900,000 for the 3 months ended March 31, 2022, of $14,500,000 for the same period in 2023, an increase of 22%.

Speaker 2

Nearly 50% of the increase was tied to higher stock based compensation and the remaining increase was primarily due to the full year impact of a few 2022 hires and the InventMed acquisition combined with annual merit increases and normalized bonus payouts for the year. We had a net loss of $6,400,000 or $0.37 per basic and fully diluted share of the 3 months ended March 31, 2023, as compared to a net loss of 3,800,000 during the same period in 2022. On a non GAAP basis, net loss for the Q1 of 2023 was 1,600,000 or $0.09 per basic and fully diluted shares outstanding as compared to a non GAAP net loss of 0 point 1 1,000,000 or $0.01 per basic and fully diluted share in the same year ago period. Operating cash flow was virtually breakeven at an immaterial loss of $86,000 during the quarter, which was largely due to the timing of upfront payments to fund investments in our growing capabilities and expanded access. Our balance sheet remains strong with cash, of cash equivalents and short term investments totaling $73,700,000 on March 31, 2023, compared to $74,100,000 in December 31, 2022.

Speaker 2

We are well capitalized to executing against our organic growth strategy and believe our balance sheet positions us to further expand our business solution offerings and drive profitable growth. Officer. We're also continuously evaluating M and A opportunities that fit within our strategic priorities at more attractive valuations when compared to last year. In terms of our revenue outlook for the full year 2023, the company continues to expect revenue to increase at least 10% of

Speaker 3

the company's business, and we

Speaker 2

are very pleased with the progress we made in the Q1 of 2023. Our average revenue per top 20 pharmaceutical manufacturer now stands at $2,000,000 as of the Q1 of 2023. And we are working with 18 of the top 20 largest pharma companies in the world and 100% of the top 20 that don't have the majority of their sales tied to COVID-nineteen vaccines. As a former Pharma executive, I believe that this segment of the industry represents the largest opportunity for commercial and digital solutions, and we continue to have a solid presence in this space. Our net revenue retention rate declined to 86% due to the macroeconomic factors and the resulting impact to several client programs that we discussed in our prior calls.

Speaker 2

Revenues per FTE held steady at $605,000 and in line with what we reported last quarter. As a reminder, our KPIs are calculated on a 12 month rolling basis and are impacted by the dynamics of the headwinds from the previous year. Officer. As these headwinds subside, we expect our KPIs to show improvement. And now with that, I would like to turn the call back over to Will.

Speaker 2

Will?

Speaker 1

Thanks, Ed. Operator, now let's move to Q and A.

Operator

Thank you. Ladies and gentlemen, we will now begin the question and answer If you are using a speakerphone, please lift your hands up before pressing any keys. One moment please for your first question. Your first question comes from Ryan Daniels William Blair. Please go ahead.

Speaker 4

Hey, good afternoon. This is Jared Haas in for Ryan. Thanks for taking our questions. First one from us, we were just hoping to get some color regarding the state of financial assistance programs in pharma. There was a recent report highlighting some of the tension between pharma and payers and maybe some manufacturers starting to pull back these programs, which obviously can have an impact on patient access.

Speaker 4

So just curious if you could speak a little bit to what you're seeing in the market overall? And then I guess just as a related point, could you maybe tie in sort of what percentage of your revenue comes from these programs today.

Speaker 1

Yes. Hey, Jared, it's Will. Good to hear your voice and I'll hand it over to Ed in We don't break out revenue by solution because we're really moving towards that enterprise approach where it's multiple

Speaker 3

solutions and multiple pieces and they all have a

Speaker 1

relevant play in the patient journey. Of pieces and they all have a relevant play in the patient journey. So not going to break that out, It's not a material percentage of our business. It hasn't been. We've spoken to that over the last few years.

Speaker 1

It's just a piece of the business that's important and basically making affordability accessible will always be important. I think where it's heading is it's going to become more specific to specialty medications where it really has the largest impact for the patient and the HCP to have a patient who's adherent. But let me hand it over to Ed and then maybe Steve can of Guginta.

Speaker 2

Yes. Thanks, Will. Jerry, great question. Yes, so I would agree with what Will just said. Officer.

Speaker 2

Financial messaging has been a declining slice of the overall pie for us for a while. But I think these trends driven by pharma trying to be much more targeted in financial messaging specifically due to the fact that COFA programs just need to be a lot more Again, a lot more targeted. It really bodes well for our RWE and AI solution mix That really kind of helps us identify the right types of patients at the right time at the point of care. I don't know if you have anything else you want to add to that.

Speaker 5

Yes. I mean, I would just say, Jared, it's consistent also with the shift from sort of small molecule drugs in the marketplace, so sort of those massive name brands, household brands to the shift to specialty. You've got that exchange from volume to value occurring and consistent with that the financial assistance programs need to evolve. So whether or not there was friction between payers and pharma, that friction has always existed, But just the general dynamics in the marketplace and the ecosystem changing from small molecule to more biologics and specific as Ed highlighted Would necessitate the change in co pay programs or financial assistance anyway. So it's, as Ed said, I think it's a net benefit to us given our focus on our technology with RWDAI, we're positioned really well to capitalize on that.

Speaker 5

So great question though. Thank you.

Speaker 4

Got it. Yes, that makes sense. And yes, I can appreciate the ability to target is certainly a differentiator. So I guess just as a follow-up here. Will, I think you alluded to the sort of tactical sales that being kind of the area of the business that's been most impacted by these transitory headwinds.

Speaker 4

I'm wondering how quickly can those sales come back? I mean, do you feel like these budgets are largely set for the year at this point? Do you think if we get maybe a little bit more stability that those types of things can maybe swing back in the second half of the year?

Speaker 1

Yes, absolutely. So on the tactical side, it is the one that can be dialed up and down the fastest, right there. They're largely going through media companies who are managing those budgets for pharma. Good news is we've worked with over 50 agencies. We've worked with obviously a lot of brands over the last year.

Speaker 1

So as the macro does get better, that's the one they will dial up the fastest. So yes, we're not calling that ball yet, but that is the one that would be dialed up in the second half. The good news is we're just seeing improvement in the first half. And I think that's largely due to some efforts we made mid last year to really double down on marketing and education of what we're doing with the agencies and really being a partner that helps them differentiate with pharma. And We're seeing very good early signs of that.

Speaker 1

So and still hopeful in the second half.

Speaker 4

Okay, great. Appreciate all the color. Thanks.

Speaker 1

Thank you.

Operator

Your next question comes from Sean Dodge with RBC. Please go ahead.

Speaker 6

Thanks. Maybe we'll just stay on tactical for a moment. Your comments there around that improving it. Is there anything you can share to give us a sense of the magnitude of change there, maybe like pipeline for tactical, I guess, compared to Q4, how much is that,

Speaker 3

I don't know, progressed or grown.

Speaker 1

Well, Ed would get mad at me if I stray from our KPIs, so I'm not going to give you pipeline numbers, he's stronger than I am. But we are seeing mark to mark year over year year to date over year to year, just more active business already. And Sean, we've talked about this. We really doubled down probably August, September last year around training, marketing, holding events, speaking at conferences and that brought a lot of awareness up for within the agency sector. So I think net net, they're all catching up, pharma is catching up to digital and I think we've supplied a really clear message of what we can enable and in helping our clients find patients through HCP access and drive script lift and ROI.

Speaker 6

Okay, great. And then on the guidance, it continues to imply a pretty steep revenue ramp into the back half of the year. Maybe is there any update you can share on visibility you have into that? I guess as we progress Deeper into the year, I'd imagine a greater proportion of that's now visible kind of via being under contract. Anything you can kind of share or quantify for us there?

Speaker 1

Sure. Ed, do you want to start? Yes.

Speaker 2

I can take that. Yes, sure. Yes. So, Eitan, how are you? So right now basically, we typically see between, I would say, 55% to 70% of our backlog already signed and committed, And we're tracking well within that range.

Speaker 2

So that gives us a nice kind of view on the back half of the year from what we said today. So we really feel like it's a pretty healthy backlog and looks pretty solid to at least meet our current guidance.

Speaker 6

Okay. The 6 RWD deals you all signed as far, are those all up and running now? Or is there some expectation and that those will begin to flow in Q2 and beyond that kind of help when we think about like the incremental kind of revenue cadence over the year?

Speaker 1

Yes, they are all active now. And I think a key piece of the second half being heavier or at least reliant on growth there. As this time last year, we didn't really have a pipeline for RWDAI. And we have a very robust pipeline right now in that. So that's a we've talked about it as a growth driver, but that's what gives us even more confidence on the second half.

Speaker 1

And then the seasonality, Sean, as you know, that's it's typical that second half is higher anyway. But yes, this Thanks, John. See you next week.

Operator

Your next question comes from Stephanie Davis with SVB. Please go ahead.

Speaker 7

Hey guys, thanks for taking my question. First, I just I know we've asked a lot of questions about the market, but one of your peers has called out some pipeline elongation across large pharma clients. So I was hoping we can get your view and your take on why some of this is happening beyond the macro?

Speaker 1

Sure. Well, Steve is in the thick of it. I'll let him talk to sales cycle and elongation.

Speaker 8

Hey, Stephanie. Good to hear from you. Thanks for the question. So I mean, I

Speaker 5

think what we saw there was a little bit of this sort of pause with the Financial situation that went on a little bit in the Q1 frankly, sort of waiting to see what was going on. And what we've seen post that is actually an acceleration on the pipeline. So we're seeing close times shrink at this point and marketing teams scrambling to try to get programs live faster, and that pause is sort of relinquished. So we're kind of thrilled to see that. We're waiting to see what the actual shakeout will look like here post Q2 in terms of sales cycles again, but We're already back in line with what our typical sales cycle looks like.

Speaker 5

And so I don't have any reason to believe at this point that there'll be disruption in that. In fact, the sales cycle in some of our more sort of sophisticated targeting products is also starting to shorten as people are kind of scrambling to catch up. Of Executive Officer of Executive

Speaker 3

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Speaker 7

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Speaker 3

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Operator

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Speaker 3

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Speaker 1

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Speaker 3

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Speaker 7

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Speaker 4

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Speaker 3

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Speaker 7

of Executive Buyback authorization intra quarter. Why are we not seeing buy shares hand over fist?

Speaker 1

Well, there are these things called blackout periods. We have to follow the rules. So, we obviously believe in our stock and we have one arrives and when we can we will. But since March, right? Yes, but we were in a blackout period when we actually announced that.

Speaker 1

So of Yes, we have 5 days a quarter, as you know, and that was announced after that.

Speaker 7

So Makes sense.

Speaker 1

Yes, I would just add, Stephanie, that I I think the sales cycle for peers, as they also are shifting to sort of bigger enterprise deals, There's just more and more decision makers. That's one aspect of it. The other thing is when you're doing something That may be close to another company that's claiming they can do it. Well, Pharma wants to see if that's true. And so sometimes that slows them down to test it.

Speaker 3

We certainly saw that last year. We talked about it,

Speaker 1

sort of cluttered market We saw that last year, we talked about it, sort of cluttered market landscape. And as Steve said, and we believe that's going to declutter pretty quickly because If you can't measure it and you can't present it transparently and show effectiveness, you're going to fade pretty quickly.

Speaker 3

Of CFO.

Speaker 7

Very helpful. Thank

Speaker 3

you. Sure.

Operator

Your next question comes from David Grossman with Stifel. Please go ahead.

Speaker 9

Thank you. I just wanted to go back to a couple of comments you made in your prepared remarks. And one of those was that you said you were beginning to expand more aggressively outside the EHR. And I'm wondering, Could you just elaborate on what you're doing and strategically what you're trying to accomplish?

Speaker 1

Absolutely. Hey, Dave, it's Will. So when you think about where we are within our client base and how we track to the patient journey and helping them stay connected to that patient journey via of HCP Access. Doctors are not just on their EHR all day, right? They're on their cell phones.

Speaker 1

They're in care team technology meetings. There's a lot of different touch points. They're using telehealth depending on the therapeutic area. So from our perspective, because we're a tech company and we know how to API really well, it makes sense to go beyond the AHR as a landing pad. And so when we sit down with our clients, we can show them a much more holistic plan around HCP Access.

Speaker 1

And the key piece to this is you have to do all that while being transparent of physician level data. So Steve, maybe you want to add to that a little bit, but I think that's the rationale and The early signs is it's pretty good strategy. Clients are responding pretty well to that.

Speaker 5

Hey, David. I I think you highlighted it, Will. I mean, it's essentially meeting the physicians where they're at. And the key differentiating point for us is the ability to report back physician level data in terms of those interactions. So unlike sort of general as endemic website advertisements, The ability to provide back PLD and show at a physician level what's going on, I think is going to be the key differentiator for us.

Speaker 5

And as you heard from Will, it's not just in the EHR that we can do that, but it's every other platform that we're looking at or making that a focal point. Officer. It's going to give us a key differentiating point from anybody in our peer set, frankly.

Speaker 9

Right. And one thing that's come up, I think in the digital ad space at least or immediate buying among those things is of the potential impact of generative AI and I know this is a big buzzword kind of media thing going on right now. But that being said, I'm just wondering how much you've thought about the impact on your business and how it can help you and where it could potentially hurt you if others Yes, kind of get into it before you.

Speaker 1

Yes, it's interesting. We obviously, like everyone is watching that, But the truth is we've been doing machine learning for the last two and a half years through that's RWDAI, right? So We have that implemented active. We have revenue against it in the pipeline. So it's not a dream.

Speaker 1

We're hoping that someday makes our company more efficient and already has. And I think you heard in the prepared remarks that we're going to have our platform to a place where we can enable that service for of any brand, any size campaign for the entire network. And that's material because if you think of this space, Like all marketing, it gets more and more transparent, sophisticated. And to avoid commoditization, you need to make it better. You need to innovate.

Speaker 1

And so we've really doubled down in that over the last couple of years. And I think that's going to be something that people really remember this company for. I think we're way ahead of the pack. And I spent 2 days last week with our team of data scientists. And I could tell you, It's very much in the DNA of the company already.

Speaker 1

So, I obviously have seen other companies looking at it, using it from anywhere from simplifying note taking to clinical decision support. These things have been in the workflow for a while and they're going to get better faster. And the reason why We're watching it, but not totally paranoid that someone could come in who's faster, smarter, smaller, whatever, is they're not in the workflow. And as we've talked about, the EHRs are already full with people there and aren't really looking for more. So I think we're in a good place to be their partner with this and just deliver great innovative solutions of the doctor and the patient.

Speaker 9

But have the use cases for the RWE products, if you look back to the first couple of deals you signed a year ago or so and what you're doing now, has there been any big change?

Speaker 1

They're unbelievably effective, David. It's like we're finding of patients that our clients otherwise wouldn't find who need the medications that are out there. So it's impactful for outcomes, it's impactful for the patient, the doctor, and obviously for our clients. So There's some it's really it's actually really firing us up because it's a smarter message and it's based Some good intel we have, patent pending, we're really focused on building that out. And I think we'll have more and more cases to share.

Speaker 1

But in the prepared remarks, we certainly talked to 1.

Speaker 9

Right. And just one financial question maybe for Ed. It looks like stock based comp stayed relatively flat, but your GAAP operating expenses sequentially, I think, went up, Yes, quite a bit more than we would have expected. So I'm just trying to think through given what's going on with the top line, What's going on in the operating expenses? Maybe these are expenses that are just fixed costs, but I was Just surprised that how much the expenses went up sequentially.

Speaker 2

Yes. So on the OpEx side, if you just look at the cash comp, A few things at play. First of all, you're right, compensation has gone up and that's really a product of a couple of things. Merit increases, we made a few very, very few hires last year. We also reset our bonuses for this year.

Speaker 2

As you know, last year we missed our numbers, so it would be nice to pay out full bonuses. So that's just a reset of bonuses for this year, Back to 100%. And then secondly, it's really the investments related to expansion of our channel footprint as well as some of the reporting capabilities that Wilk had mentioned. So I would say if you look at OpEx run rate, You can expect a slight increase in subsequent quarters, not in the millions, more in 100 of 1,000 of dollars per quarter, Just to continue to capture those points you just made.

Speaker 9

So you would expect sequential increases to balance of the year? Yes.

Speaker 2

I do expect growth in the top line.

Speaker 9

Right. Very good. All right. Thanks very much. Appreciate it.

Speaker 3

Of the company.

Operator

Your next question comes from Neil Chatterjee with B. Riley. Please go ahead.

Speaker 3

Of CFO. Hey guys, good afternoon and

Speaker 1

thanks for taking the questions. Maybe just first, just curious if

Speaker 3

you could just give us Maybe more color on that, I guess the smart targeting enhancement you were talking about for the platform?

Speaker 1

Well, so we've been talking about RWDAI for a while. Why don't I let Steve, why don't you give just a quick overview of really the simple message to why this works for of doctors, clients and patients.

Speaker 5

Yes, happy to. Hey Neil, I mean essentially what we're doing is we Office that allows us to look at it for individual patient profiles across the ecosystem of patients in the U. S. So we have an intake function for data, a machine learning platform that enables us to clearly interrogate that data and identify potential candidates for a specific therapy and then we have an execution function to go out and take an action within HCP regarding the patient panel that they've got. And so I think that's one of the key differentiators for this business, Neil, is you've got businesses out there that are analytics businesses, you've got data businesses and you have other businesses that execute, but this business is unique in that it's got all three of those components now solely connected together to be able to go out, find, identify, execute and pull through.

Speaker 5

And that's the key differentiator. I think that's Simplest way I could really describe it. And that's why it's so effective, right, because you've just got this linear plug in that's very efficient Officer and Anken Scale. Helpful?

Speaker 2

Got it. Okay. I might have

Speaker 10

misinterpreted that. So there's not something new for later this year. That's

Speaker 3

I was

Speaker 1

just going to say it's just expanding it to be available to our entire network for all brands that we work with. So, just a more sophisticated trigger mechanism, which gives better targeting and better ROI. Of CFO.

Speaker 3

Great, great. Thanks for that clarification. And then just another just follow-up here just on

Speaker 11

the hub service agreement that

Speaker 1

you got. Just curious on

Speaker 3

the kind of the expected impact from that? Yes,

Speaker 1

it's about $1,000,000 a year spread out pretty evenly through each year. And That's one brand, one hub. And so, it's pretty easy to see how that could scale pretty nicely. And we're proud of that. It's a good win.

Speaker 1

The team did a great job. And It's, we've got a solution that can really help, the hubs and therefore, the patient and those programs are patient of these programs around eligibility and affordability. So it's right place, right time, but We got into it early enough to have it ready. So we're very excited about that. We'll keep everyone posted on others that we're able to bring across the line.

Operator

Officer. Your next question comes from Max Michals with Lake Street Capital Markets. Please go

Speaker 8

ahead. Hey, guys. Thanks for taking my question. I know last quarter conference call. You had mentioned that you weren't seeing any major investments in the first half of the year.

Speaker 8

I'm wondering now that we approach the mid point of 2023 if that thought process has changed at all.

Speaker 1

Max, what do you mean investments from the client's perspective or investments from from B.

Speaker 8

Pedro, I mean, with a healthy balance sheet, it could be technology improvement, M and A, if you're seeing anything out in the market, it's just more broader investment, I guess.

Speaker 1

Yes, sure. So as Ed said, we are very actively looking at M and A targets. We think Through this year, valuations will be more achievable for someone in our size and situation. Obviously, we'll be highly selective in that process, but have several really great active discussions going on. We're investing in ourselves.

Speaker 1

We're really good at that. We've got unbelievably good ROI when we invest in ourselves, probably our best ROI to date. So we continue to invest in reporting, in best in class technology and then obviously solution expansion. And if you think of Max, our growth drivers, it's land and expand with client. It's add additional solutions or improve them, so we can maintain price or improve price and then reach more physicians or patients wherever they are.

Speaker 1

So we're investing in all three of those.

Speaker 9

All right. That's it for me, guys. Thanks.

Speaker 1

Thank you. Have a good day.

Speaker 3

There are

Operator

no further questions at this time. Please proceed.

Speaker 1

Thanks, operator. Once again, thank you everyone for joining us on our updated call this afternoon. We continue to work through the opportunities before us with the expectation that growth will come in the coming quarters. We are maintaining our focus on product execution to continue to deliver superior ROIs on behalf of our customers, which has and will continue to pay dividends as we execute against the opportunity within the vast white space that we continue to sell into. Our valuation doesn't effectively represent the current value of our company.

Speaker 1

And I believe we can provide venture type returns off our current trading price as we execute against the opportunity at hand. As a result, we intend to set up our trading plan for our recently authorized share repurchase program once our next trading window opens. I want to remind everyone of our key strengths, which we expect will continue to propel OPRX's story in 'twenty three and beyond. We have the largest in workflow network in the U. S.

Speaker 1

That reaches more than 60% of the active prescribers. Our landing pads outside the EHR substantially increase our prescriber reach and enables us to build cutting edge solutions. Finally, our AI enablement, which identifies HCPs whose patients are most in need of our customers' resources and therapies is catching a toehold and we believe favorably positions us to grow for the foreseeable future. We are firmly positioned to execute against our 20 of financial and operational goals, which we believe will be bolstered by our strong balance sheet, which is something I'm very proud of given the current capital markets backdrop. Of the company.

Speaker 1

As such, we look forward to making a positive impact across our pharma, prescriber and patient stakeholder base for years to come. Of CFO. Thanks again for joining us on our call today, and we look forward to everyone joining us at the upcoming conferences and our next earnings call.

Speaker 3

Operator? Of CFO.

Operator

Thank you, sir. Before we conclude today's call, I would like to provide the company's Safe Harbor statement that includes important cautions regarding forward looking statements made during today's call. Statements made by management during today's call may contain forward looking statements within the definition of Section 27A Officer of 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.

Operator

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, of gross margin, operating expenses, profitability, cash flow, technology investments, of Growth Opportunities, Acquisitions and upcoming announcements. They also include the management expectations for the rest of the year. Of 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 statements.

Operator

Of the company. The risks and uncertainties to which forward looking statements are subject to include, but are not limited to, the effects of government regulation, competition Officer of Financial Services and other material risks. Risks and uncertainties to which forward looking statements are subject to could affect business and financial results are included in the company's annual report on the Form 10 ks for the quarter ended December 31, 2022. This form is available on the company's website and on the SEC website atsec.gov.

Speaker 3

Officer.

Operator

Before we end today's conference, I would like to remind everyone that this call will be available for replay via web Cast 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 your conference call. You may now disconnect

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Earnings Conference Call
OptimizeRx Q1 2023
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