OptimizeRx Reports Second Quarter 2020 Revenue Up 25% to a Record $8.8 Million; First Half Revenue up 34% to Record $16.4 Million, with Accelerated Growth Expected in Second Half
Financial Highlights
- Revenue increased 25% to a record
$8.8 million in second quarter of 2020, first half of 2020 up 34% to a record$16.4 million . - Gross profit increased 19% to
$5.1 million in the second quarter of 2020. - Cash and cash equivalents totaled
$14.1 million atJune 30, 2020 . - Closed additional enterprise deals, bringing total value of enterprise-level engagements to
$21 million in annualized revenue. - Accelerated growth expected in second half of 2020.
Q2 2020 Operational Highlights
- Finalized a new partnership that expands the company’s digital communication platform by more than 300 health systems and 125,000 healthcare providers that use the market-leading Epic and Cerner electronic health records systems (EHRs).
- Launched TelaRep™ for on-demand virtual consults that support physicians treating patients with complex diseases in COVID-19 world.
- True™ Women’s Health launched a new mobile app powered by OptimizeRx’s RMDY digital health tools that enables the clinic to use telehealth to treat patients nationwide with personalized health and wellness programs during the COVID-19 pandemic.
- Recognized as one of The
Americas' 500 Fastest-Growing Companies by The Financial Times. - Chief commercial officer,
Stephen Silvestro , was honored with the 2020 PM360 ELITE 100 Award for his organizational leadership and positive impact on the healthcare industry. - Hosted new webinar series featuring industry thought leaders covering a range of topics around using digital health technology to improve patient care, engagement and outcomes.
Q2 2020 Financial Summary
Total revenue in the second quarter of 2020 increased 25% to a record
Gross margin decreased to 58.6% in the second quarter of 2020 from 61.6% in the year-ago quarter. The decrease was due to an unusually favorable product mix in the year-ago period that had a high percentage of launch assistance services and other nonrecurring revenue that was not subject to revenue share expense. The company expects its gross margin to improve on a quarter-over-quarter basis for the balance of the year, with a target of 63% for 2020.
Operating expenses totaled
Net loss on a GAAP basis in the second quarter of 2020 was
Non-GAAP net income for the second quarter of 2020 was
While the company expects to return to GAAP profitability as its revenue grows, expenses related to investments in growth initiatives or non-cash charges could result in a loss in any given quarter. Given the opportunity at hand as discussed below, the company is focused on top-line growth while maintaining a strong balance sheet.
Cash and cash equivalents totaled
Management Commentary
“In Q2, we generated another record topline along with sequential margin improvement,” said
“During the quarter, we expanded our digital health platform with greater reach into Epic and Cerner, and we secured revenue from new solutions born out of our
“In all, we beat our internal goals across the board as we continued to build a highly impactful digital communications platform that is situated between all the major stakeholders---a nationwide network helping doctors, patients and industry improve adherence and affordability.
“As COVID-19 continues to disrupt the traditional pathways of communication between industry, doctors and patients due to the drop in office visits and widespread transition to virtual care,
“We’ve also been working to enhance our corporate governance and we recently welcomed to our board
“We have built meaningful physician reach over the years, and with some measure of exclusivity, by integrating our platform into the leading EHR and e-prescribe systems. Today we reach 60% of the ambulatory market. That is, where most prescribing occurs. Now we have another great opportunity to improve care by integrating with pharmacies at the point-of-dispense.
“We are seeing great traction with our clients on multiple levels. We are deeply entrenched in our client base as we work with 45% of the top 20 brands by revenue with continued interest from the remaining 55%.
“This powerful position reflects the trust we’ve gained with our clients at a time when digital communication is absolutely needed, and it is supporting our continued shift to a SaaS-based, recurring revenue model. We recently secured two new SaaS-based enterprise-level deals, bringing to total the value of our enterprise-level engagements to
“Most of our growth this year has been organic, as our pharma clients increasingly recognize that addressing the point of care is critical to an effective marketing strategy. Our newer solutions, like patient engagement, hub enrollment and TelaRep, are all generating interest and beginning to generate revenue within our client base. We see these helping to drive growth this year and even stronger growth next year. We came in ahead of our internal budget for the first half and now expect to far exceed our earlier goals for the second, keeping us on pace for another year of record growth and market expansion.”
Conference Call
Date:
Time:
Toll-free dial-in number: 1-866-248-8441
International dial-in number: 1-323-289-6576
Conference ID: 1161129
Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact CMA at 1-949-432-7566.
A replay of the call will be available after
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 1161129
Definition and Use of Non-GAAP Financial Measures
This earnings release includes a presentation of non-GAAP net income (loss) and non-GAAP earnings (loss) per share or non-GAAP EPS, both of which are non-GAAP financial measures.
The company defines non-GAAP net income (loss) as GAAP net income (loss) with an adjustment to add back depreciation, amortization, non-cash lease expense, 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 income (loss) divided by the number of weighted average shares outstanding on a basic and 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 cashflow 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 excludes 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 income (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 income (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 income (loss) and non-GAAP EPS for the three months and six months periods ended
About
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 definition of Section 27A of the Securities Act of 1933, as amended, and such as in section 21E of the Securities Act of 1934, as amended. These forward-looking statements should not be used to make an investment decision. The words 'estimate,' 'possible' and 'seeking' and similar expressions identify forward-looking statements, which speak only as to the date the statement was made. 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 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 material risks.
Company Contact
Tel (248) 651-6568 x807
dbaker@optimizerx.com
Media Contact
Tel (754) 245-7070
malejandra@optimizerx.com
Investor Relations Contact
CMA Investor Relations
Tel (949) 432-7557
oprx@cma.team
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
2020 |
2019 |
|||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 14,114,294 | $ | 18,852,680 | ||||
| Accounts receivable, net | 10,805,191 | 7,418,025 | ||||||
| Prepaid expenses | 2,701,249 | 871,043 | ||||||
| Total Current Assets | 27,620,734 | 27,141,748 | ||||||
| Property and equipment, net | 156,550 | 176,014 | ||||||
| Other Assets | ||||||||
| 14,740,031 | 14,740,031 | |||||||
| Technology assets, net | 5,722,762 | 6,238,453 | ||||||
| Patent rights, net | 2,442,409 | 2,550,587 | ||||||
| Other intangible assets, net | 4,835,327 | 5,151,102 | ||||||
| Right of use assets, net | 503,506 | 559,863 | ||||||
| Other assets and deposits | 35,943 | 80,727 | ||||||
| Total Other Assets | 28,279,978 | 29,320,763 | ||||||
| TOTAL ASSETS | $ | 56,057,262 | $ | 56,638,525 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable – trade | $ | 496,742 | $ | 492,995 | ||||
| Accrued expenses | 2,044,335 | 1,800,635 | ||||||
| Revenue share payable | 3,496,489 | 1,618,438 | ||||||
| Current portion of lease obligations | 119,512 | 115.431 | ||||||
| Current portion of contingent purchase price payable | 5,360,812 | 1,500,000 | ||||||
| Deferred revenue | 648,692 | 580,014 | ||||||
| Total Current Liabilities | 12,166,582 | 6,107,513 | ||||||
| Non-current Liabilities | ||||||||
| Lease obligations, net of current portion | 387,654 | 448,753 | ||||||
| Contingent purchase price payable, net of current portion | - | 5,220,000 | ||||||
| Total Non-current Liabilities | 387,654 | 5,668,753 | ||||||
| Total Liabilities | 12,554,236 | 11,776,266 | ||||||
| Commitments and contingencies | - | - | ||||||
| Stockholders’ Equity | ||||||||
| Preferred stock, |
- | - | ||||||
| Common stock, |
14,753 | 14,601 | ||||||
| Additional paid-in-capital | 80,194,282 | 78,272,268 | ||||||
| Accumulated deficit | (36,706,009 | ) | (33,424,610 | ) | ||||
| Total Stockholders’ Equity | 43,503,026 | 44,862,259 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 56,057,262 | $ | 56,638,525 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| NET REVENUE | $ | 8,783,230 | $ | 7,006,291 | $ | 16,367,832 | $ | 12,215,725 | ||||||||
| COST OF REVENUES | 3,639,016 | 2,687,143 | 6,880,779 | 4,270,623 | ||||||||||||
| GROSS MARGIN | 5,144,214 | 4,319,148 | 9,487,053 | 7,945,102 | ||||||||||||
| OPERATING EXPENSES | 6,200,027 | 3,839,105 | 12,802,118 | 7,332,894 | ||||||||||||
| INCOME (LOSS) FROM OPERATIONS | (1,055,813 | ) | 480,043 | (3,315,065 | ) | 612,208 | ||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Interest income | 8,345 | 33,574 | 63,666 | 55,938 | ||||||||||||
| Change in Fair Value of Contingent Consideration | (30,000 | ) | (107,000 | ) | (30,000 | ) | (255,000 | ) | ||||||||
| TOTAL OTHER INCOME (EXPENSE) | (21,655 | ) | (73,426 | ) | 33,666 | (199,062 | ) | |||||||||
| INCOME(LOSS) BEFORE PROVISION FOR INCOME TAXES | (1,077,468 | ) | 406,617 | (3,281,399 | ) | 413,146 | ||||||||||
| PROVISION FOR INCOME TAXES | - | - | - | - | ||||||||||||
| NET INCOME (LOSS) | $ | (1,077,468 | ) | $ | 406,617 | $ | (3,281,399 | ) | $ | 413,146 | ||||||
| WEIGHTED AVERGE SHARES OUTSTANDING | ||||||||||||||||
| BASIC | 14,667,216 | 12,743,379 | 14,638,359 | 12,412,442 | ||||||||||||
| DILUTED | 14,667,216 | 13,806,761 | 14,638,359 | 13,467,562 | ||||||||||||
| EARNINGS (LOSS) PER SHARE | ||||||||||||||||
| BASIC | $ | (0.07 | ) | $ | 0.03 | $ | (0.22 | ) | $ | 0.03 | ||||||
| DILUTED | $ | (0.07 | ) | $ | 0.03 | $ | (0.22 | ) | $ | 0.03 | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Six Months Ended |
||||||||
| 2020 | 2019 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Income (Loss) | $ | (3,281,399 | ) | $ | 413,146 | |||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Depreciation, amortization, and non-cash lease expense | 1,040,463 | 425,873 | ||||||
| Stock-based compensation | 1,435,156 | 938,399 | ||||||
| Stock issued for board services | 200,027 | 241,077 | ||||||
| Provision for loss on accounts receivable | 40,000 | - | ||||||
| Change in fair value of contingent consideration | 30,000 | 255,000 | ||||||
| Changes in: | ||||||||
| Accounts receivable | (3.427,166 | ) | (966,658 | ) | ||||
| Prepaid expenses and other assets | (1,785,422 | ) | (202,036 | ) | ||||
| Accounts payable | 3,747 | 785 | ||||||
| Revenue share payable | 1,878,051 | 55,824 | ||||||
| Accrued expenses and other liabilities | 186,682 | (511,976 | ) | |||||
| Deferred revenue | 68,678 | 158,766 | ||||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (3,611,183 | ) | 808,200 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of equipment | (24,998 | ) | (47,739 | ) | ||||
| Purchase of intangible assets | - | (1,000,000 | ) | |||||
| (24,998 | ) | (1,047,739 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of common stock, net of commission costs | 286,983 | 21,163,636 | ||||||
| Expenses related to issuance cost of common stock | - | (301,711 | ) | |||||
| Payment of contingent consideration | (1,389,188 | ) | - | |||||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (1,102,205 | ) | 21,861,925 | |||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | (4,738,386 | ) | 21,622,386 | |||||
| CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 18,852,680 | 8,914,034 | ||||||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 14,114,294 | $ | 30,536,420 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | - | $ | - | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
| Intangible asset additions included in accounts payable | $ | - | $ | 500,000 | ||||
| Non-cash effect of cumulative adjustments to accumulated deficit | $ | - | $ | 3,229 | ||||
| Lease liabilities arising from right of use assets | $ | - | $ | 672,809 | ||||
Reconciliation of non-GAAP to GAAP Financial Measures
(Unaudited)
| For the Three Months Ended June 30, |
For the Six Months Ended |
||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||
| Net income (loss) | $ | (1,077,468 | ) | $ | 406,617 | $ | (3,281,398 | ) | $ | 413,146 | |||
| Depreciation, amortization and non-cash lease expense | 520,794 | 235,571 | 1,040,463 | 425,817 | |||||||||
| Stock-based compensation | 780,670 | 543,866 | 1,635,182 | 1,179,476 | |||||||||
| Income or loss related to the fair value of contingent consideration | 30,000 | 107,000 | 30,000 | 255,000 | |||||||||
| Non-GAAP net income (loss) | $ | 253,996 | $ | 1,293,054 | $ | (575,753 | ) | $ | 2,273,439 | ||||
| Non-GAAP net income (loss) per share | |||||||||||||
| Basic | $ | 0.02 | $ | 0.10 | $ | (0.04 | ) | $ | 0.18 | ||||
| Diluted | $ | 0.02 | $ | 0.09 | $ | ( 0.04 | ) | $ | 0.17 | ||||
| Weighted average shares outstanding: | |||||||||||||
| Basic | 14,667,216 | 12,743,379 | 14,638,359 | 12,412,442 | |||||||||
| Diluted | 15,626,367 | 13,806,761 | 14,638,359 | 13,467,562 | |||||||||
Source: OptimizeRx Corporation