Earnings call transcript: OptimizeRx's Q3 2025 Earnings Beat Expectations

OptimizeRx Corp (OPRX) reported a significant earnings beat in Q3 2025, with earnings per share (EPS) of $0.20, surpassing the forecast of $0.04 by 400%. The revenue reached $26.1 million, exceeding the expected $23.83 million. Following the earnings announcement, the stock rose 1.98% in aftermarket trading to $19.54.

Key Takeaways

• OptimizeRx achieved a substantial EPS surprise of 400%.
• Revenue exceeded forecasts, contributing to positive market sentiment.
• The company is transitioning to a subscription-based revenue model.
• Gross margins are expanding, stabilizing in the upper 50s to low 60s range.
• Strategic partnerships and innovations are driving growth.

Company Performance

OptimizeRx demonstrated robust performance in Q3 2025, marked by strong revenue growth and a shift towards a more predictable subscription-based model. This transition is enhancing the company's financial stability, with a significant portion of its business coming from renewals. The company's unique capabilities in digital advertising and audience targeting continue to bolster its competitive position.

Financial Highlights

• Revenue: $26.1 million, exceeding the forecast of $23.83 million.
• Earnings per share: $0.20, a significant beat over the $0.04 forecast.
• Gross margins: Expanding, stabilizing in the upper 50s to low 60s range.

Earnings vs. Forecast

OptimizeRx's actual EPS of $0.20 significantly exceeded the forecast of $0.04, resulting in a 400% surprise. This beat is notable compared to previous quarters and highlights the company's strong financial momentum.

Market Reaction

Following the earnings announcement, OptimizeRx's stock increased by 1.98% in aftermarket trading, reflecting positive investor sentiment. The stock's current price of $19.54 is approaching its 52-week high of $22.25, indicating strong market confidence.

Outlook & Guidance

Looking forward, OptimizeRx is providing guidance for 2026 with increased visibility. The company anticipates a 60 basis points expansion in EBITDA margins. Its conservative approach to forecasting aims to ensure smooth, predictable revenue growth.

Executive Commentary

CEO Steve Silvestro highlighted the robust RFP season, stating, "We're seeing more RFPs come in. The RFPs are more directly pointed at what we want them to be." CFO Ed emphasized the strength of the company's renewal business, noting, "Vast majority of our business comes from renewals."

Risks and Challenges

• Operational expenses are increasing slightly due to performance-based bonuses.
• The conservative forecasting approach may limit aggressive growth expectations.
• Market competition in digital advertising and healthcare targeting remains intense.

Q&A

During the earnings call, analysts inquired about revenue smoothing strategies and the managed services contract approach. Executives also detailed the drivers behind gross margin expansion and the strategic partnership with Lamar Advertising.

Full transcript - OPTIMIZERx Corp (OPRX) Q3 2025:

Steve Silvestro, CEO/Management, OptimizeRx: The Street and also to our clients and investors that we're going to give more visibility on our visibility into the future as we've been migrating more toward a predictive model. We've quoted in the past descriptive momentum. So we're going to continue to push that throughout the remainder of the year. And as a result of that, we're now getting more visibility into the out years, including 2026. In terms of the RFP situation, Ryan, RFP season has been very strong for the business.

We do see more people coming into the digital space and making investments on the client side. And we're seeing equal parts HCP and DTC at this point interest in the RFP cycle. I would say the parts of DTC that we cover at OptimizeRx are CTV, ATV, the pieces that you're aware of. And in the event that we have a linear television ban or reduction or any of those pieces, Our view and thesis is that our solutions that will continue to benefit disproportionately from those types of moves. So, I would say at this point, both DTC and ACP are looking very healthy.

I appreciate the question.

Analyst/Participant: Perfect. Thank you so much. I'll hop back in the queue.

Steve Silvestro, CEO/Management, OptimizeRx: You got it. Thanks, Ben.

Conference Operator, Call Moderator: Thank you. And the next question comes from Richard Baldry with ROTH Capital.

Andy, Executive/Management, OptimizeRx: Thanks. When you look at the implied guidance for fourth quarter revenue, it'd be actually slightly down year over year at the top end of guidance. Can you talk about either any onetime year ago issues or other things because your net retention would argue that that's sort of difficult to do.

Steve Silvestro, CEO/Management, OptimizeRx: Yes. Thanks for the question, Rich. Good to hear from you. So I mean, what we're looking at is really a full year guide at this point and trying to give a good range of what we believe will come in at. We moved away from quoting pipeline, as everybody on the call knows, and then moved principally toward contracted revenue and what our real visibility is.

And so the new guidance that we've updated with is truly what our visibility is. It doesn't count bluebirds that might happen, buy ups that might happen that are not accounted for right now or we don't have visibility in years past. We would have thought about that more in terms of pipeline and probabilities. But what you're seeing in the guidance now is, I think, reflective of our true visibility that we know we can deliver on. And again, we're going to continue to be very transparent, very conservative, sandbagging, but look to beat the numbers that we put out there every time.

So, you appreciate the transparency and conservatism.

Andy, Executive/Management, OptimizeRx: Yeah. And just to

Ed, CFO/Financial Executive, OptimizeRx: add to that yes, sorry. Just to add a little bit, as Steve said, I think we do need to look at it on a full year basis rather than quarter by quarter. As you know, Q1, Q2, and Q3 have been extremely strong. So it is more of a smoother sort of a phasing this year than it was in the past. So again, I would just encourage you to look at the full year performance versus last year.

Steve Silvestro, CEO/Management, OptimizeRx: And part of it is the enhancement to the revenue model, right, Rich? Part of it is we've been successful at migrating away from periodic revenue drops and getting to a more smooth revenue model. And so that's what Ed is referring to there.

Andy, Executive/Management, OptimizeRx: Got it. It's just implicitly a little hard to look at it as a full year. We only have ninety days left. So same question, I think I'm going to get a similar answer. But if you look at the adjusted EBITDA guidance, you'd have an up revenue quarter, maybe 10% plus sequentially, but the adjusted EBITDA either be slightly down to narrowly possibly up.

Again, is there any like onetime expenses year end, things that trip higher that create more of a headwind because it wouldn't it'd still be down year over year as well?

Steve Silvestro, CEO/Management, OptimizeRx: Sure. Ed, do want to take that one?

Ed, CFO/Financial Executive, OptimizeRx: Yes. I can take that one. Yes. Yes. Look, mean, we're assuming a conservative gross margin number.

There's nothing really in the operating expense line that's going to pop. So it's more of just, you know, being a little bit, you know, more conservative on what we think is going to happen with the with the channel and product mix. We do believe that, you know, we're shooting for hitting or beating the top end of the range.

Andy, Executive/Management, OptimizeRx: Got it. Thanks.

Steve Silvestro, CEO/Management, OptimizeRx: Sure. Thanks, Rich. Appreciate the support.

Conference Operator, Call Moderator: Thank you. And the next question comes from David Grossman with Stifel Financial.

Analyst/Participant: Great, thanks. Hey, David. Hey, guys. Maybe we could just expand a little bit on the line of questioning you just went through. And maybe, Steve, take a minute just to remind us of fundamentally what may be going on in the business that may be smoothing out the quarters or maybe giving you better visibility?

And then I have another question after that. But just curious again, fundamentally, some of the changes that you guys have made that may be creating a little better visibility and, again, giving you the confidence, for example, to guide to 2026 at this point.

Steve Silvestro, CEO/Management, OptimizeRx: Sure. Yes, happy to talk to it. And then Andy and Ed can chime in also. But I mean, if you think about our business data the way that we've talked about it over time, you've got our audience businesses, which is gap principally, and then you've got micro neighborhood audience, which is that targeting capability for DTC. Both of those are data driven technologies that are lend themselves to becoming more subscriptive in nature.

Then you've got our execution functions, both the point of care and the other omnichannel components for HCP, and you've got that for DTC. And those are obviously going to be transactional largely because that's the way that component of not just our business, but the ecosystem operates. And so what we've seen is outsized growth in DAP, like we've talked about in months past, and we've seen a resurgence of micro neighborhood audience growth. And so those pieces not only give us a smoothing of the revenue because of the revenue models, but they also give us a renewable view into what 2026 will look like, and those contracts start earlier than we would normally do for transaction level contracting. That's the big part of it.

Andy, feel free to chime in if you want to add more.

Andy, Executive/Management, OptimizeRx: Yeah. I mean, go it's really ahead, Ed.

Ed, CFO/Financial Executive, OptimizeRx: No. I was going say, I mean, as you guys know, I mean, vast majority of our business comes from renewals. So, if you take that into account and then add some of the successes that drove this year on top of it with more visibility into next year in terms of signed contracts as we sit here today, we feel like we're in a position to say, all right, you know, looking at next year, we can start to make at least a, you know, general guide around bookends that we're going to shoot for. And as things progress forward, we'll continue to tighten that range. Go ahead, Andy.

You can add to that.

Conference Operator, Call Moderator: No, you got it. We both nailed it. All right.

Analyst/Participant: So, thanks for all those details. So, I recall, like last quarter, we talked about these managed services type of contracts that come in. How much of that was present in the third quarter? And are you kind of making the same assumption that you did last quarter where you're not assuming any of that comes to bear in the fourth quarter in terms of the guidance that you provided as well as the outlook for '26. Is that the way to think about it?

Steve Silvestro, CEO/Management, OptimizeRx: Yes. Andy, why don't you take that one?

Andy, Executive/Management, OptimizeRx: Yes. So it went back to more of a normalized rate in the third quarter as it relates to that managed services business. The only thing that we're including in the forecast period for managed services business is stuff that we've already won and is starting to burn into revenue right now. We're not really including anything that's, you know, in pipeline that we don't have visibility to. So, again, we're taking a very conservative approach to providing guidance with, you know, bookings that we feel very comfortable with.

Analyst/Participant: Right. So as we kind of think of your guidance for '26, can you help us kind of bracket the kind of retention that is the baseline, if you will, to achieve that range?

Andy, Executive/Management, OptimizeRx: Yeah. So historically, between 515% of our business comes from new logos every year. You know? So the remaining would be what you would consider net revenue retention on a normalized basis.

Analyst/Participant: Okay. And that's the same assumption underlying your '26 guidance?

Andy, Executive/Management, OptimizeRx: It is. Yeah. We we don't yeah. We don't really guide based on net revenue retention. Right?

But that's kinda how it just shakes out as as every year progresses.

Steve Silvestro, CEO/Management, OptimizeRx: Got it. Great.

Analyst/Participant: And then on that note, David,

Steve Silvestro, CEO/Management, OptimizeRx: on that note, just one other one other quick bullet for you. Just and you guys spoke about this last time we were together. We are seeing a good growth in the mid the mid tier segment of our business, meaning the mid tier segment of clients coming to the table who may not be in that top twenty, twenty five, 30 manufacturers that are coming in with outsized spend, mostly because we're able to provide capabilities that can supplement, not just supplement, frankly replace a lot of the stuff that they can't afford to do internally, whereas the big manufacturers might have kind of Cadillac support, so to speak, the mid tier businesses do not. But using the technology that we've got allows them to compete on level ground. And so that's why we're seeing such a drive there.

And our commercial organization that Teresa is leading has done a wonderful job of driving that. So just wanted to call that out as a key point.

Analyst/Participant: Got it. All very helpful. Thanks very much. Appreciate it.

Steve Silvestro, CEO/Management, OptimizeRx: You got it. Great to

Analyst/Participant: hear your voice. We'll talk soon. Yes.

Conference Operator, Call Moderator: Thank you. And the next question comes from Eric Martinuzzi with Lake Street.

Eric Martinuzzi, Analyst, Lake Street: Eric. Yes. I wanted to dive in on the RFP trends. You talked about they're improved. I was just curious to know is that your win rate is the same and the number of RFPs has improved?

Or is your win rate improving on a flat RFP trend? What can you tell us there?

Steve Silvestro, CEO/Management, OptimizeRx: Yes, I'll start and then I'll have Andy chime in too. But all of these other, we're seeing more RFPs come in. The RFPs are more directly pointed at what we want them to be, which I think is good. The market is seeing what we're shifting the business model to over time. So the RFPs are definitely reflective of what we're providing the market, providing our clients.

And I would say our win rate as a result of that is getting better. Again, I want to give some credit to our commercial team. They're doing an excellent job of getting out ahead of all of this stuff and engaging with clients. And when you're engaging with clients more intimately, you can tend to drive the crafting of the RFPs so that they get written at an appropriate level to something that you can respond versus a just a random spray and pray request for information, right? And when we get those, the hit rate will be lower because there was no prior engagement.

So hats off to Jen Dwyer, Theresa Greco and the entire commercial team for doing a great job there.

Eric Martinuzzi, Analyst, Lake Street: All right. And then you talked about the smoothing of the business. Maybe I could use a brief tutorial on the transactional where you said that those started later in the year as opposed to the DAP and the micro neighborhood that are more sort of level loaded, the kickoffs to each of those types of campaigns?

Steve Silvestro, CEO/Management, OptimizeRx: Sure. Yeah, happy to talk about it. I mean, you think about what Gap and what M and T or M and A does, it's principally audience creation and it's the data that drives all of the campaigns, right? It's the technology producing, finding those patients wherever they're going to be. And so because that is more of a software like play that lends itself to a normal planning cycle where renewals are going to happen earlier, that's the way pharma manages that segment of their budget.

And then the transactional components, which is typically message distribution, whether it's at an HCP level or if it's something that's going through a DSP, like a trade desk or some other way, typically is budgeted and accounted for on a quarterly basis and it's based on performance and driven that way. So bringing dApp to the table and getting it more mature, which we've been working very hard on, as you know, over the last several years since we launched it, and now bringing in what we acquired through the Medix acquisition with M and T, that has really started to transform the profile of the business. And that's what you're seeing reflected in the performance of this year as well. You're seeing it front and center, but it will reflect into 2026 as well. That's given us great visibility.

I think everyone feels better about what we're doing there. We're significantly up year over year on visibility for next year.

Eric Martinuzzi, Analyst, Lake Street: Is there a what's the right way to think about the percentage of the revenue in 2025 versus the percentage of the revenue in 2026 between those two buckets?

Steve Silvestro, CEO/Management, OptimizeRx: Yes. We don't break it out. We don't break it out at a product level.

Andy, Executive/Management, OptimizeRx: Okay.

Eric Martinuzzi, Analyst, Lake Street: Thanks for taking my questions.

Steve Silvestro, CEO/Management, OptimizeRx: You got it. Great questions. Thanks.

Conference Operator, Call Moderator: Thank you. And the next question comes from management Schwalke with B. Riley Securities.

Management Schwalke, Analyst, B. Riley Securities: Hi, thank you for taking the questions and congratulations on another really strong quarter. So first, could you provide some color on the partnership with Lamar Advertising and on the size of the opportunity here? And I guess will this gradually roll out Or is this going live across their entire national inventory?

Steve Silvestro, CEO/Management, OptimizeRx: Yeah, happy to talk about it. Great to hear from you. So the whole idea with Lamar is they're looking to transform their business model, right? And their current business model is billboards. And one of the things that OptimizeRx does really well, which you're acutely aware of is patient finding and an ability to be more precise in the way that we deploy messages across our omnichannel ecosystem.

So think about the capability of doing that to enable a screen that's in a desperate location that might move from a random billboard to maybe a digital screen that's large, right? And that's really what Lamar is after there. The size of the opportunity is very large. I'm not to take a stab at the TAM, because it's not mine to take a stab at it's really theirs. But the partnership is going to start rolling out pretty rapidly, would say.

And it's still early for us to start quoting projections on what we think it'll do. It's really piloting at this point, but we're feeling pretty optimistic about the initial testing that we've done. And we'll release more information on it as we get some more results, but early stages look pretty encouraging.

Management Schwalke, Analyst, B. Riley Securities: Okay, got it. And then I guess does current guidance that you've provided for 2026 factor in any contributions from this partnership?

Steve Silvestro, CEO/Management, OptimizeRx: No, zero, nothing. Too early for us to start factoring into forecast. We're just not going to do it yet. Great question, Yes.

Management Schwalke, Analyst, B. Riley Securities: And then could you talk about the gross margin expansion in the third quarter? What really drove this? And how should we be thinking about margins going forward in the fourth quarter and also into 2026?

Steve Silvestro, CEO/Management, OptimizeRx: Sure. Ed, do you want to take that one?

Ed, CFO/Financial Executive, OptimizeRx: Yeah. Sure. Yeah. So look. I mean, it's it's typically driven by our product mix or solution mix and the channel partner mix.

As we said before, you know, as we scale the business, we tend we we have much more ability to negotiate more favorable deals with our channel partners, so that's reflecting itself in the numbers, as well as growth in in in DAP and and the GTC platform. So those two things together contributed to where we are right now for the year in Q4. Going forward, I would say we're kind of stabilizing in that upper 50s to low 60s range from a guidance perspective, but you can see that it's certainly upside to that number as the year progresses. Okay. Got it.

Andy, Executive/Management, OptimizeRx: I'll add just one quick thing to that there, Anderson. So we also, in the third quarter, had a lot more or in the second quarter, had a lot more managed services revenue, and and we did not have nearly as much in the third quarter. And managed services revenue is our our lowest margin product.

Management Schwalke, Analyst, B. Riley Securities: Okay, got it. Thank you for that and congrats again on the great quarter.

Ed, CFO/Financial Executive, OptimizeRx: Thank you.

Steve Silvestro, CEO/Management, OptimizeRx: Thanks. Great to hear from you.

Conference Operator, Call Moderator: Thank you. And the next question comes from Jeff Garro with Stephens.

Jeff Garro, Analyst, Stephens: Yes. Good afternoon. Thanks for taking the questions. I want to ask on the 2026 guide and the profitability side. If I calculate it right, the midpoints, see about 60 basis points of EBITDA margin expansion.

I was hoping you could talk about the mix of gross margin expansion maybe dependent on channel mix versus operating leverage And then any areas of potential variability that could lead to more or less margin expansion than what we

Conference Operator, Call Moderator: see at the midpoint there? Thanks.

Steve Silvestro, CEO/Management, OptimizeRx: Yes. Jeff, I'm happy to answer it topically, and we won't get too deep into 2026, but happy to answer it topically. And what Andy just said is really a clear articulation of the dynamics of the business that really govern it, right? So as we continue to see our audiences grow over time through the Gap and M and T products, margin expansion will continue to be front and center. We will also manage the channel partner mix on the other side of that, looking for optimal margin, and that gives us the dynamic of being able to continue to improve over time.

Execution will be what it's going to be, as you know, from this business, and that's fairly predictable on the highs and lows. But those are the dynamics that are sort of shaping how we're thinking about twenty twenty six gross margin expansion opportunities and where we've landed. Don't think that's helpful.

Jeff Garro, Analyst, Stephens: Yes. Maybe a follow-up on the operating leverage side of things. You're certainly seeing, I think, a quarter over quarter decline in adjusted operating expenses this quarter, seeing really good leverage and maybe not expecting that to be the persistent trend over the next five or so quarters. But just a little more color commentary on your ability to drive additional operating leverage in the business would be helpful. Thanks.

Steve Silvestro, CEO/Management, OptimizeRx: Yeah. Yeah. No problem.

Ed, CFO/Financial Executive, OptimizeRx: I mean,

Steve Silvestro, CEO/Management, OptimizeRx: look, we're going to consistently go ahead, Ed. Yeah. Why don't you take it? Yeah. Go ahead.

Ed, CFO/Financial Executive, OptimizeRx: Yeah. So OpEx, as we said before, mean, we have a highly leverageable business model as it is now. So as I said, on a cash basis, there was actually a bit of an increase, about $2,000,000 versus last year. And that most of that is driven by the fact that our bonuses and variable comp are tracking our overperformance on the top line this year. So once you dial that back, you can pretty much assume a relatively stable operating expense run rate on a cash basis.

Jeff Garro, Analyst, Stephens: Understood. Thanks for taking the questions guys. Congrats again.

Steve Silvestro, CEO/Management, OptimizeRx: Thank you.

Conference Operator, Call Moderator: You. And this concludes our question and answer session. I would like to turn the conference back over to Steve Silvestro for any closing comments.

Steve Silvestro, CEO/Management, OptimizeRx: Thank you, operator, and thank you all for joining us today. We're pleased to be building a strong operational and financial momentum. Our foundation is solid, our patient focused strategy is working, and we're confident in the path ahead. What you heard today reinforces our belief in our ability to achieve both our near term goals and our long term growth objectives. I remain deeply optimistic about the future of our business and the opportunities before us.

We look forward to speaking with all of you again on the next earnings call and meeting many of you in the upcoming investor conferences and one on one meetings in the coming weeks. Wishing everyone a wonderful rest of your day and a wonderful holiday season with your families and friends.

Conference Operator, Call Moderator: Thank you, Mr. Silvestro. 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 conclude forward looking statements within the definition of Section 27A of the Securities Act of 1993 as amended and Section 21E of the Securities Act of 1994 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. These may speak only to the date that such statements are made. Forward looking statements in this call include statements made defining how pharmaceutical companies, patients and prescribers connect our value or growth plans, creating shareholder value, becoming a Rural 40 company, estimated 2025 revenue and adjusted EBITDA ranges, capturing greater market share and expanding our participation in the pharma industry's digital ecosystem, our technology and growth opportunities and building a strong operational and financial momentum. Forward looking statements also include the management's expectations for the rest of the year. The company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

Forward looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or qualified. Future events and actual results could differ materially from those set forth and contemplated by and or underlying these forward looking statements. The risks and uncertainties to which forward looking statements are subject to include, but are not limited to, the effects of government regulation, compensation, dependence on a concentrated group of customers, cybersecurity incidents that could disrupt operations the ability to keep pace with growing and evolving technology the ability to maintain contacts with electronic prescription platforms and electronic health records networks and the material risks discussed on the company's annual report Form 10 ks for the year ended 12/31/2024, and other companies the company has made and may make with the SEC in the future. These filings, when made, are available on the company's website and on the SEC website at sec.gov. Before we end today's conference, I would like to remind everyone that an audio recording of this conference call will be available for your replay starting later this evening running through for a year on the Investors section of the company's website.

Thank you for joining us today. This concludes today's conference, and you may now disconnect

Andy, Executive/Management, OptimizeRx: your lines.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.