OptimizeRx (NASDAQ:OPRX) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.
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View the webcast at https://viavid.webcasts.com/starthere.jsp?ei=1760247&tp_key=80ee98d522
Summary
OptimizeRx reported Q1 2026 revenue of $19.8 million and an adjusted EBITDA of $3.3 million, exceeding consensus estimates.
The company is experiencing short-term revenue contraction due to macroeconomic factors and Most Favored Nation pricing disruptions, but anticipates recovery in the long term.
AI-enabled DAP solution saw a 60% growth, highlighting strong market fit and adoption, with a shift towards subscription-based revenue models.
The company updated its 2026 revenue guidance to $95-$100 million, maintaining adjusted EBITDA guidance of $21-$25 million, while implementing cost optimization to reduce annual expenses by $3 million.
Operational highlights include increased adoption in both pharma and medtech sectors, along with strategic refinancing of the term loan to reduce interest expenses.
Full Transcript
OPERATOR
Good afternoon everyone and thank you for joining OptimizeRx first quarter fiscal 2026 earnings conference call Us today is Chief Executive Officer Steven Silvestro. He is joined by Chief Financial and Strategy Officer Edward Stellmak, Chief Legal and Administrative Officer Marianne Odense-Ford, and Chief Business Officer Andrew Da Silva. 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. The Company will also be discussing certain non GAAP financial measures which it believes are useful in evaluating the Company’s operating results. A reconciliation of such non GAAP financial measures is included in the earnings release the Company issued this afternoon as well as in the Investor Relations section of the Company’s website. I would like to remind everyone that today’s call is being recorded and will be made available for replay as an audio recording of this conference call on the Investor Relations section of the Company’s website. Now I would like to turn the call over to OptimizerX CEO Steven Silvestro. Mr. Silvestro, please go ahead.
Steven Silvestro (Chief Executive Officer)
Thank you Operator and good afternoon to everyone joining us for today’s first quarter 2026 earnings call. We delivered a solid start to the year which exceeded consensus estimates on the top and bottom line. Revenue for the first quarter was 19.8 million and adjusted EBITDA was 3.3 million. While we’re pleased with our performance in the quarter, the broader healthcare technology operating environment continues to evolve. We’re seeing ongoing softness in our contracted revenue base relative to prior year levels, largely driven by what appears to be short to intermediate term disruption from last year’s most favored nation pricing dynamics and other macroeconomic factors which are resulting in more cautious budget allocations, contract durations and in some cases the delaying of campaign timing and scope. That said, we want to be clear we do not view these pressures to endure. In fact, we’ve made good progress with several large manufacturers at this point getting spend levels back up and the issue is more limited in scope than it previously was. The long term shift within Life Sciences toward digital data driven engagement is accelerating and OptimizerX is well positioned to capitalize on this growth. Moreover, we continue to see encouraging signs of long term adoption and expansion by our customers. Our AI enabled Digital Assistance Platform (DAP) solution grew 60% in the first quarter which highlights continued product market fit and customer adoption. In addition, another one of our top pharmaceutical clients has continued to broaden its use of point of prescribed solutions across multiple oncology brands. What began as targeted engagement within specific indications has evolved into a scaled multi brand deployment driven by measurable improvements in prescriber engagement and campaign performance. This type of expansion underscores our ability to grow within large enterprise accounts. We are seeing similar momentum in Medtech where we are driving increased adoption of Digital Assistance Platform (DAP) to identify and activate high value prescriber audiences. Initial pilot programs are expanding into multimillion dollar engagements, further reinforcing the repeatability of our growth model. From an operational standpoint, our business remains very strong as we continue to see consistent validation of our platform across both pharma and medtech customers. At the same time, we are expanding our presence with mid tier and long tail life science companies which we believe represent a significant and underpenetrated growth opportunity for optimize rx. We are also making continued progress in shifting a greater portion of our revenue mix towards subscription based models, particularly within Digital Assistance Platform (DAP). Tied to our AI enabled Digital Assistance Platform (DAP) solution which showed growth in the first quarter, our Digital Assistance Platform (DAP) subscription revenue also grew by 45%. This transition is an important step in improving revenue visibility and building a more durable and predictable financial model over time. Despite seeing measurable growth within our business macro headwinds are still present and we have less visibility on our full year. Given this, we are updating our full year 2026 guidance to reflect a more conservative revenue outlook. We now expect revenue to be in the range of 95 to $100 million. Importantly, we’re maintaining our adjusted EBITDA guidance of $21 million to $25 million. This reflects both the strength of our operating model and the proactive cost optimization initiatives we have implemented. We’ve taken steps to align our cost structure with the current environment by prioritizing strategic investments, optimizing discretionary spend, deploying new agentic technology tools within our own business for better efficiency, and leveraging the scalability of our largely fixed cost platform. These actions are expected to reduce cash operating expenses by approximately $3 million on an annualized basis, including savings of approximately $1 million in 2026 for an in year benefit excluding any severance related impacts. In addition, our gross margin optimization initiatives are continuing to deliver positive results and we now expect full year gross margin to be in the high 60% range. We’ve also strengthened our financial position through the recent refinancing of our term loan. ED will provide more details later in our presentation, but suffice it to say that the new term loan is expected to lower our interest expense by approximately 625 basis points. We want to thank BlueTorch for being a good partner over the last two years. As we recently announced, we continue to take the important steps to expand our platform capabilities and connectivity into the broader ecosystem. We are now enabling demand side platforms that control more than 80% of digital promotional dollars to connect directly into OptimizerX proprietary EHR network. This technical evolution of our platform and expansion in our go to market strategy marks a significant opportunity for the business and we anticipate it will drive outsized growth through the planning season and into 2027. Providing programmatic access to DSPs through our network enables media buyers to activate scalable point of care and point of prescribed campaigns within their existing Programmatic workflows, effectively positioning Optimize RX as a supply side platform for marketers looking to engage healthcare providers directly within the clinical workflow. Today we estimate that we are utilizing less than 10% of our available inventory across the network through traditional HCP marketing initiatives. We believe programmatic activation, the preferred way for pharma media agencies to buy these solutions, has the potential to significantly increase utilization over time. Given that Programmatic has captured the majority of media spend across other verticals, we see a meaningful opportunity for this channel to scale and potentially become comparable in size to our current HCP business over the long term. As the question has been raised before, I want to briefly address artificial intelligence and reiterate that we do not view AI as a disruptor to our business. Rather, we see it as a potential accelerant. As our customers realize efficiencies in areas like content creation, we expect those savings to be redeployed into execution and engagement areas where Optimize RX is particularly well positioned. Finally, while we are navigating short term pressures, our core value proposition remains unchanged and our long term outlook remains highly optimistic. We are deeply embedded in our customers workflows, we’re delivering both meaningful and measurable ROI and we are operating in a large, dynamic and growing market with significant long term opportunities. And with that, I’d like to turn the time over to our cfso, Ed Stellmak, who will walk us through the financial details.
Ed Stellmak
Ed thanks Steve and good afternoon everyone. As with all our calls, a press release was issued this afternoon with Results of our first quarter ended March 31, 2026. A copy is available for viewing and may be downloaded from the Investor Releases section of our website and additional information can be obtained through our forthcoming 10Q first quarter 2026 revenue was $19.8 million, a decrease of 10% from the 21.9 million we recognized during the same period in 2025. We believe this decrease was driven in part by a decline in low margin managed services revenue, revenue reduction on a major client account and a more cautious budget allocation and shorter program duration commitments driven by Most Favored nations pricing and other macroeconomic challenges. Our expenses for the quarter ended March 31, 2026 decreased 4.6 million year over year, primarily driven by lower cost of revenue and G and A. The decrease in cost of revenue was related to a favorable product mix as we didn’t have any DTC managed service revenue this quarter as well as favorable channel partner mix. We believe various margin optimization strategies we implemented over the last 12 months continue to yield significant benefits. As a result, we now expect gross margins to normalize into the highest 60% range for the full year 2026. GAAP net loss narrowed to 0.5 million or $0.03 per basic and diluted share for the three months ended March 31, 2026 as compared to a net loss of 2.2 million or $0.12 for basic and diluted share for the 3 months during the same period in 2025. On a non GAAP basis, …
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