OptimizeRx Q1 Earnings Call Highlights

Key Points

• OptimizeRx beat Q1 expectations with revenue of $19.8 million and adjusted EBITDA of $3.3 million, and it narrowed its GAAP net loss. Profitability improved as expenses fell sharply year over year, helped by a better product mix and lower costs.
• Management lowered full-year 2026 revenue guidance to $95 million-$100 million due to softer contracted revenue, shorter customer commitments, and macro pressure tied to life sciences spending and MFN pricing dynamics. Adjusted EBITDA guidance was left unchanged at $21 million-$25 million.
• Growth in DAAP and subscription revenue remains a bright spot, with DAAP up 60% and DAAP subscription revenue up 45% in the quarter. The company also highlighted long-term potential from programmatic DSP integration, while noting a recent refinancing should cut annual interest expense by about $1.5 million.

OptimizeRx NASDAQ: OPRX reported first-quarter fiscal 2026 results that topped consensus expectations, while management lowered its full-year revenue outlook, citing continued caution among life sciences customers and shorter contract commitments tied in part to most-favored-nation pricing dynamics and other macroeconomic pressures.

Chief Executive Officer Steve Silvestro said revenue for the quarter was $19.8 million and adjusted EBITDA was $3.3 million. He characterized the quarter as a “solid start to the year,” but said the healthcare technology operating environment remains in flux.

“We’re seeing ongoing softness in our contracted revenue base relative to prior year levels,” Silvestro said, pointing to “short to intermediate term disruption” from last year’s most-favored-nation pricing dynamics, along with broader macroeconomic factors. He said those factors have led to “more cautious budget allocations, contract durations, and in some cases, the delaying of campaign timing and scope.”

Despite those headwinds, Silvestro said the company does not believe the pressures will endure, adding that OptimizeRx has made progress with several large manufacturers in restoring spending levels.

Revenue Declines, Profitability Improves

Chief Financial and Strategic Officer Edward Stelmakh said first-quarter revenue fell 10% to $19.8 million from $21.9 million in the same period of 2025. He attributed the decline in part to lower-margin managed services revenue, a revenue reduction on a major client account, and more cautious customer budget allocations and shorter program commitments.

Expenses decreased by $4.6 million year over year, which Stelmakh said was primarily due to lower cost of revenue and general and administrative expenses. He said the lower cost of revenue reflected a more favorable product mix, including no direct-to-consumer managed services revenue in the quarter, as well as favorable channel partner mix.

The company’s GAAP net loss narrowed to $0.5 million, or $0.03 per basic and diluted share, compared with a net loss of $2.2 million, or $0.12 per basic and diluted share, in the year-earlier quarter. On a non-GAAP basis, net income rose to $2.7 million, or $0.14 per diluted share, from $1.5 million, or $0.08 per diluted share, a year earlier. Adjusted EBITDA increased to $3.3 million from $1.5 million in the first quarter of 2025.

Operating cash flow was negative $0.5 million, which Stelmakh said was primarily tied to payouts of 2025 bonuses and fourth-quarter 2025 sales commissions during the first quarter. The company ended the quarter with $20.2 million in cash, down from $23.4 million at the end of 2025, and debt of $23.6 million after paying down $2.7 million of principal during the quarter.

Guidance Lowered for Revenue, EBITDA Outlook Maintained

OptimizeRx now expects full-year 2026 revenue of $95 million to $100 million. Management maintained its adjusted EBITDA guidance of $21 million to $25 million and continued to expect revenue to be weighted toward the second half of the year at roughly a 40/60 split.

Silvestro said the revised revenue outlook reflects reduced visibility for the full year, even as the company sees growth in certain parts of the business. Stelmakh said the company expects gross margins to normalize in the high-60% range for the full year, citing margin optimization efforts implemented over the last 12 months.

Silvestro also said the company has taken actions to align its cost structure with the current environment, including prioritizing strategic investments, reducing discretionary spending, deploying new agentic technology tools internally and leveraging the scalability of its largely fixed-cost platform. He said those actions are expected to reduce cash operating expenses by approximately $3 million on an annualized basis, including about $1 million of benefit in 2026, excluding severance-related impacts.

DAAP and Subscription Revenue Continue to Grow

Management highlighted growth in OptimizeRx’s AI-enabled DAAP solution, which Silvestro said grew 60% in the first quarter. DAAP subscription revenue rose 45%, according to Silvestro, who said the company continues to shift more revenue toward subscription-based models to improve visibility and predictability over time.

Silvestro said one top pharmaceutical client has expanded its use of point-of-prescribe solutions across multiple oncology brands, moving from targeted engagement within specific indications to a broader multi-brand deployment. He said similar momentum is emerging in med tech, where pilot programs are expanding into multimillion-dollar engagements.

Stelmakh said average revenue per top 20 pharmaceutical manufacturer was approximately $2.8 million, with those top 20 companies representing 52% of first-quarter revenue. Net revenue retention remained at 110%, and revenue per full-time employee rose to $801,000 from $710,000 in the first quarter of 2025.

Programmatic Access Seen as Long-Term Growth Opportunity

Silvestro said OptimizeRx is enabling demand-side platforms that control more than 80% of digital promotional dollars to connect directly into its proprietary electronic health record network. He described the move as a significant expansion of the company’s platform and go-to-market strategy.

According to Silvestro, the company currently uses less than 10% of available inventory across its network through traditional healthcare provider marketing initiatives. He said programmatic activation could increase utilization over time and potentially become comparable in size to the current healthcare provider business over the long term.

In response to an analyst question, Silvestro said the company expects early revenue from the DSP connections later in the second half of 2026, with more meaningful flow during the 2027 renewal cycle. He declined to provide revenue projections, saying it was too early to quantify the opportunity.

Management Points to One Major Client as Near-Term Pressure

During the question-and-answer session, Silvestro said much of the reduced visibility is tied to shorter contract duration and disruption at one larger client. He said contracted revenue remained about 15% to 20% below prior-year levels, similar to what the company had described on its previous earnings call.

Silvestro said customers are continuing to renew, but shorter commitments require more frequent renewals and reduce visibility. He also acknowledged that OptimizeRx “didn’t execute well” in the affected major account, while saying the company has had constructive conversations with that client’s leadership team and has a plan to get the relationship back on track.

When asked whether the disruption could persist into 2027, Silvestro said management views it as contained to 2026. “There’s nothing mechanical wrong in any of these businesses, and certainly in our business,” he said, adding that the company could see buying from the affected clients later in the third quarter or fourth quarter.

Subsequent to the quarter, OptimizeRx refinanced its term loan with Blue Torch Capital through Fifth Third Bank. Stelmakh said the new arrangement includes a fully drawn $25 million term loan and access to a $10 million revolver. The interest rate on the term loan is SOFR plus 2.25%, compared with SOFR plus 8.5% under the prior facility, representing approximately $1.5 million in annual interest expense savings.

Silvestro closed the call by reiterating confidence in the company’s long-term opportunity, citing the shift in life sciences toward digital, data-driven engagement and the company’s focus on DAAP utilization, subscription revenue and sustainable profitable growth.

About OptimizeRx NASDAQ: OPRX

OptimizeRx, Inc is a healthcare technology company that operates a digital health network designed to facilitate communication between pharmaceutical manufacturers, payers and healthcare providers. Through its cloud-based platform, OptimizeRx delivers targeted digital interventions—such as patient savings messages, clinical content and product information—directly into electronic health record (EHR) workflows at the point of care. By integrating with leading EHR systems, the company helps life sciences organizations optimize brand engagement, improve patient adherence and support informed prescribing decisions.

The company's core offerings include digital prescription benefit notifications, co-pay assistance alerts and real-time clinical messaging tailored to specific patient populations.

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