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OptimizeRx Corporation (OPRX)
Q1 2019 Results Earnings Conference Call
May 8, 2019, 4:30 PM ET
William Febbo - Chief Executive Officer
Miriam Paramore - President
Doug Baker - Chief Financial Officer
Conference Call Participants
Andrew D’Silva - B. Riley FBR
Richard Baldry - ROTH Capital
Ryan Daniels - William Blair
Eric Martinuzzi - Lake Street
Previous Statements by OPRX
» OptimizeRx's (OPRX) CEO William Febbo on Q4 2018 Results - Earnings Call Transcript
» OptimizeRx Corp. (OPRX) CEO William Febbo on Q3 2018 Results - Earnings Call Transcript
» OptimizeRx Corp. (OPRX) CEO William Febbo on Q2 2018 Results - Earnings Call Transcript
Following their remarks, we will open the call to questions. Then before we conclude today’s call, I will provide some important cautions regarding the forward-looking statements made by management during the call.
I’d like to remind everyone that today’s call is being recorded and will be made available for telephone replay via instructions in today’s press release in the Investors section of the company’s website.
Now, I’d like to turn the call over to OptimizeRx CEO, William Febbo. Please go ahead.
Thank you, Jishan, and good afternoon, everyone. Thanks for joining us on the call today. In Q1, we realized our eighth quarter in a row of revenue growth, along with record gross margins and continued profitability.
These great results were achieved despite the noise we had experienced at the start of the year at the federal government and corporate level and with procurement at pharma waking up a little later, which I talked about on a previous call.
These record results were driven by a number of key factors, including diversified revenue streams, broad provider reach, scalable technology and overall strong operational performance by the team.
I want to be really clear on this call. OptimizeRx is just starting on its path to building a meaningful business and there is still so much more room for growth. For the sports enthusiasts, we are in the early innings of a big market opportunity with more than $1 billion in total addressable market in just one of our many solutions for pharmaceutical clients.
Post-acquisition of CareSpeak, we also increased our growth opportunities further by now trying to solve for the $528 billion internal cost of medication non-adherence. Like affordability, we believe our solutions improve patient engagement and adherence, represent one of the biggest unmet needs in our industry and society, making it a strong investment thesis.
There are immense resources being poured into quality improvement and value based care, all for the simple reason that it improves outcomes and reduces cost for all stakeholders. Unprecedented capital is going into health IT, multiple acquisitions happening at the service level and HIT level and a fair amount of HIT IPOs planned in the coming months.
OptimizeRx is absolutely in the right place at the right time both operationally and strategically. We have taken our total available market up by a factor of at least two by adding adherence to our solution set. So if you believed in the affordability thesis we have been delivering on over the last three years, now we are going after a much larger market opportunity, well north of $2 billion.
Today our network reaches over half the nation’s healthcare providers in the ambulatory market, making OptimizeRx one of health care’s leading point-of-care network where physicians and patients are interacting daily.
Through our digital platform, pharma companies can regain critical access to doctors and their patients and provide the information and savings they need and precisely when they need it at the point of care. This helps create better health outcomes and a sensational business for all of us.
While we all saw strong top line growth in Q1, our penetration into pharma still is relatively early. We are connected to many manufacturers, but we are really only just beginning to penetrate the market. We see lots of room for growth ahead of us this year and beyond, and to manage this anticipated growth, we recently hired a Chief Commercial Officer which I will talk about more later.
Next, I’d like to turn our call over to our CFO, Doug Baker, who will walk us through the financials for Q1. Then Miriam, our President, to discuss the latest with our platform development, product road map and channel strategy. And then I will return to talk more about our results and outlook for the remainder of the year and then we will take some questions. Doug?
Thanks, Will, and good afternoon, everyone. Prior to the call we issued a press release with the results of our first quarter ended March 31, 2019. A copy of that release is available on the Investor Relations section of our website. We filed our complete 10-Q this afternoon as well.
For the first quarter of 2019, total revenue increased 27% to $5.2 million. This was primarily due to increased sales of messaging products. We currently don’t breakout revenue by service, but as we achieve greater scale, we plan to determine the best way to present our growth by service offering.
As a result of our strong revenue growth, gross margin improved to a record 69.6% in the first quarter. This was up from 51.2% in the year ago quarter. The improvement was due to a favorable shift in product mix. We expect to continue to maintain gross margins of at least 60% on a quarterly basis in 2019.
Our operating expenses totaled $3.5 million, up from $2.3 million in the same year ago quarter. This increase was related to additional expenses related to growth initiatives, as well as our acquisition of CareSpeak Communications in October 2018.