Good afternoon, and thank you for joining OptimizeRx Corporation’s Third Quarter Fiscal 2021 Earnings Discussion. With us today is the Chief Executive Officer of OptimizeRx, William Febbo. He is joined by Company Chief Financial Officer, Ed Stelmakh; President and Chief Strategy Officer, Miriam Paramore; Chief Commercial Officer, Stephen Silvestro; Executive Vice President of Finance and Accounting, Doug Baker; General Counsel and Chief Compliance Officer, Marion Odence-Ford; and Senior Vice President of Corporate Finance, Andrew D’Silva. Before we conclude earnings call, I’ll provide some important cautions regarding the forward-looking statements made by management during today’s call. I would like to remind everyone that today’s call is being recorded and will be made available for replay via webcast only. Instructions are included in today’s press release and in the Investors section of the Company’s website. Now, I’d like to turn the call over to OptimizeRx CEO, William Febbo. Sir, please go ahead.

Thank you, operator. Hello everyone, and thank you for joining us today. As you’ve already witnessed from our performance in an incredibly exciting year for our team, that includes all members of our company, clients, and all of you who are invested in this rewarding journey we’re on to continue improving patient care and adherence through technology. I’d like to begin today’s call highlighting OptimizeRx’s most valuable assets, our people, the team. We’ve continued to invest in our people, adding to our ranks some of the best in the industry to continue driving strategic, scalability and sustainable growth. As you know, from our recent announcement, Ed Stelmakh recently joined us as our new CFO and COO. Ed comes to us with extensive financial and operational experience at multiple public pharmaceutical companies, implementing strategic initiatives, helping to grow business lines and specialty medications, which is OptimizeRx’s core focus. We’re also very happy that Doug Baker remains on with us as Executive Vice President of Finance and Accounting. This transition is a testament to Doug’s steady guidance through our first phase of significant growth, which has positioned us with a strong foundation to build the top our accelerating momentum. Along those lines, we’ve recently welcomed Andy D’Silva as Senior Vice President of Corporate Finance. Andy has over a decade of equity research and capital markets experience and a solid track record as a top industry analyst. He is focused on supporting our strategic growth and capital markets initiatives. The continuity of our personnel is one of the most important elements in managing the acceleration growth and industry adoption of our business while playing a pivotal role in the fulfillment of our mission, which is to create a more informed and empowered healthcare community by developing new technology solutions that help people start…

Thanks, Will, and good afternoon, everyone. As with all of our calls, a press release was issued with the results of our third quarter ended September 30, 2021. Copy is available for viewing and maybe download from the Investor Relations section of our website. We also filed our 10-Q today. Turning to our financial results for the third quarter period ended September 30, 2021. Our reported revenue for the period was $16.1 million, an increase of 53% over the $10.5 million from the same period in 2020. The increased revenue resulted from growth and sales across all of our solutions. Gross margin for the quarters likely decreased from 57% in the year-ago period to 56% in the current period. This is the result of solution mix. In general, there has been an increase in the percentage of activity going through our higher cost channels compared to a year ago. This was offset by the launch of our RWE solution. Our RWE solution includes a much higher percentage of program design, which carries a higher margin than the delivery of actual messages. We expect our gross margin to remain relatively constant for the balance of the year. Operating expenses increased to approximately $9 million in the third quarter of fiscal year 2021 as compared to approximately $6.2 million in the same year ago period. The increase in operating expenses related to salaries, wages, and benefits and other human resource related costs is due to the expansion of our team to support future growth. Through the end of September, we have had 32 new people this year, largely in areas focused on increasing revenue. This increase is partly offset by the decrease in contractors and consultants, as we have brought functions in house that were previously outsourced. As we have demonstrated over…

Thanks, Ed. I just want to say that it’s an honor and a huge responsibility for our team at OptimizeRx to play such a critical role in connecting healthcare stakeholders by leveraging technology and innovative plays. We believe that our technology platform and solutions are not just significant for our clients ROI, but meaningful to stakeholders affected by our platform on an everyday basis, including providers and patients. We are committed to remaining true partners to our clients, continuing to evolve and mature our solutions to drive commercial performance over the medium and long-term in line with the major digitization paradigm shift across healthcare. We’re also fortunate that our business continues to operate outside current macro headwinds that are impacting the labor market and the supply chains in many industries, which positions us to maintain a strong growth trajectory in Q4 2021 and into 2022. With that, I’d like to open the call to your questions. Operator?

Thank you. [Operator Instructions] Your first question comes from Ryan Daniels with William Blair. Please go ahead.

Yeah, good evening. This is Jared Haase on for Ryan. Thanks for taking the questions and congrats on another good growth quarter. Just wanted to ask one, just around any updates you can share on the size of the pipeline at this point. Curious if there’s any color you can share either on the number of enterprise deals in the pipe, anything around ACV or the sort of close or win rate in the quarter. Thanks.

Hey, Jared. Thanks. Thanks for calling in. Yes, obviously, still early in that – in Q4 and the RFP process, but let me hand it over to Steve Silvestro, our Chief Commercial Officer who and sees that entire effort. Steve?

Thanks, Will. Hey, Jared, how are you? Thanks for the question. So the pipelines had continued growth, as you know, we share a pipeline, that’s a rolling 18-month pipeline, but we did see growth from $140 million to $218 million, which was very encouraging through the period in spite of the execution. So we continue to execute well in the pipeline continues to grow. Close rate we’ve seen is consistent between that $35 million and $50 millionthat we’ve been seeing throughout the year and parts of last year. And then on the enterprise side, obviously, we announced we closed an additional 11 deals. So it’s – it continues to be a focus of both the commercial team, as well as the product team. And you heard Will said earlier, a really healthy 13:1 ROI that is being driven by the increase in enterprise engagements, where we’ve got multiple solutions on the platform, helping provide better outcomes on the patient side and ultimately better results for our clients.

Got it. Yes. Thanks for that. And maybe can you just clarify, I think I heard you, did you say the pipeline is that $218 million now and it’s up from $140 million? Did I hear that right?

That’s correct.

Okay. Yes, we…

Jared, it was about $140 million as of last year this time. So it’s up to $218 million about 50% increase year-over-year.

Perfect. That makes sense. Thanks for that color. And then if I may, I just want to sneak in another follow-up here. And Will, I think you touched a couple times in the prepared remarks about some of the hiring that you guys have done on the operational front. So just two quick ones on that theme. First, I would appreciate any commentary you can share, just about your own internal effort sort of around culture to help make OPRX an attractive place to bring in talent. Obviously, we’re hearing from a lot of companies in this space about challenges with hiring and some companies having issues, filling positions and things like that. So we just would love to hear any sort of effort that you guys have done internally to help bring in that talent. And then secondly, related to that point, should we expect to see a little bit of an uptick still in Q4 from an OpEx standpoint. Are there so more hires to go? Just trying to get a sense of how to think about sort of a good run rate, when we think about 2022 at this point.

Yes. Jared, so culture, it’s an art, not a science, right. And we’ve really been focused on it since we refounded this company six years ago. And that’s – it’s based on a couple principles, one, everyone’s an owner. And so if you want to be here, it’s going to take a ton of work. Early days, you get to work harder and be paid less. And if it works, it’ll work out and void, because it worked out for a lot of us. So I think what you find is that we attract people from other people’s networks, because everyone here is part of is an owner in the business. And I think that makes a material difference. okay. So that’s sort of a foundational issue that we started early and we’ve been consistent with that. The second is, in our industry, we’re one of the fastest growing company. So that will attract people who are competitive and like to be where people are winning. And so you put the network with that combination. And then we’ve really, I’m not a micromanager in any way and we’ve brought on leaders who could many of them could just take my job if they needed to, if the company needed to. And as a result, they hire leaders, leaders always hire leaders. And so we’ve got a real leader culture going on here. And as we talked about in this market, where there are a lot of options, there are hundreds of new public companies that are trying to become companies grabbing people. We have not had an issue, matter of fact, we’ve had to be selective. And I think that will show a really big impact in the out years. Relative to Q4, I think, you’ve seen our sort of our new state, it’s remarkable, but obviously, I’ve spoken to a lot of investors over the last six months. Almost all of them have said, if the – if you’re so early and the opportunity is so big, don’t hold back on people, particularly on the commercial side. So we will continue to do that, obviously, as you actually execute against that, you’ve got to make sure you’re servicing it. The good news is we still have the technology platform. That’s highly leveragable. We’re just making sure as we get into this second wave of growth that we reference, we’ve got the right team in place. We really feel like we do. So Q4 is mostly focused on getting the year closed and prepping for another great year.

Got it. Thanks, Will. Appreciate all the color and I’ll hop back into queue.

Thanks, Jared.

Your next question comes from Sean Dodge with RBC Capital Markets.

Thanks. Good afternoon, and congratulations on another great quarter. Maybe to start Steve, the new enterprise deals you referenced you said closed 11 more of those during the quarter. Can you share what the annual contract value is of just those 11 you had, I think 57 million of those signed coming into the quarter. Where do you stand now?

Hey, Sean, thanks for the question. Yes, the – glad you report the ACV has gone up from $1.1 million previously reported to $1.3 million is an average ACV on these agreements. So we’re starting to – we’re continuing to trend in the right direction on the enterprise deals.

Okay. And then, I guess, as we look ahead to the fourth quarter, is there anything you can give us around the visibility you have right now when it comes to the buy-ups? I know, last year it seems like it was a little bit of an unusual year when it came to that type of activities. Do you have good visibility on that yet? Is there anything you’re seeing that would point to this being another unusual year? Maybe you could just give us some sense of how you see that kind of unfolding as we kind of enter December here.

Yes. Happy to cover it. It’s still early on the buy-ups. I think usually, the buy-ups for the business typically will start mid-November and happen, at least discussions will start mid-November and they typically happen in December. We’re starting to get some early indicators that we will have buy-ups, but still too early to get a read on what the buy-ups will look like for the full year.

Okay, great. And then maybe just a quick, last one here, you said gross margins probably pretty range on pretty flat over the remainder of the year. If we go back to the real world evidence capabilities, can you give us a sense of the incremental margins on that when those are built into a solution? I imagine, the only cost you’ve got there is what you’re paying for the third party data. So it seems like margins on those can be pretty high, I guess, margins flat for the rest of the year. But as we start to answer 2022, does the inclusion of more real world evidence? Does that help kind of give you another lever on gross margin?

Yes. Sean, it’s – the RWE solution still entails the delivery of a message, right. And we have a solid rev share with our partners on that. Any kind of architectural work does not, and again, we’re early days on that. I believe over time, it will have a anywhere from 1% to 2% improvement on an annual basis, it could be higher, but remember, this is using the network to deliver a message. We’re just doing it using AI. So still has a rough share. Just some the setup revenue is not is higher margin revenue for us.

Okay. That’s very helpful. Thanks and congratulations, again.

Thanks, Sean.

Your next question comes from Eric Martinuzzi with Lake Street.

Hey congrats on the revenue. If I had one thing to pick at in Q3 though, would be on the expense side. And I know you guys don’t give guidance, but I misfired by about $1 million. Can you give me either Ed or Will, the headcount exiting June and then the headcount exiting September?

Hey, Eric. Yes, so I’m going to pass that one over to Andy. He’s been covering that for us. Andrew D’Silva: Yes. So we saw OpEx increase roughly 17.3% or $1.3 million sequential. And that’s really driven again by increased hiring that took place during the year. So on a net basis, we added 16 new employees from the start of the second quarter until the end of the third quarter. And that accounted for when taking the account stock based comp roughly 62% of the overall increase in OpEx. The other parts of the SG&A that increased or really tied to T&E we opened up for travel. And also part of that was tied to increase just office related expenses as we brought in new hire. So if you’re looking at how we think about the fourth quarter, excluding stock based compensation, I would figure that you’re looking somewhere between $700,000 to $1 million in increased OpEx. And that’s really going to be the fully baked impact of new hires during the third quarter and then some of the additional hires that we made in the fourth quarter, which includes Ed.

Okay. And then the – you said start of second to end of third. What is our – what was our headcount either end of September or end of October, what’s the latest headcount?

Yes, it was like 86 to 93 or something like that. Yeah, yeah, yeah. Andrew D’Silva: Eric, I think, a good data point to think about, as you’re thinking about that increase is our revenue per head. It’s up there with the top 20 technology companies. So we really looked at it, obviously we’re hiring for growth, not for maintenance. So we opportunistically took advantage of the market, our position in the market, the culture we have, and we’re able to bring on just some spectacular people. So really excited about that. And I feel like the investors will too as we continue to fill the out years.

Okay. I’m going to run with 93 since I undershot last time, I’ll try and be a little more conservative this time. So that was backward looking. I wanted to focus on Q4. I know one of the prior callers had some questions regarding buy-ups for Q4. I was going to come at it a little bit differently a year ago, we saw about a nearly $6 million step up between Q3 revenue and Q4 revenue. Year-to-date, your growth has been terrific, you’re running at 52% year-on-year, but obviously the comps get a little bit tougher here with Q4. So just directionally from a $16 million base in Q3, you’re looking at a $21 million consensus number for Q4. Is that in the ballpark with what we would expect and what happened last year and given the demand now?

Like, Steve said, it’s a little early to predict buy-ups. But I’d say just based on our core business, we feel really good about the business where it is and where it will deliver. I – the last year was just strange, right. No one knew the year was going to hit us the way it did in terms of our clients. This year going in, they planned for it, although no one planned for it to be as disruptive this late year. So if I put all that together, I’m going to say, there’s probably excess budget out there, but too early to call it Eric, but we feel good with the just the core business by itself.

Okay. And then lastly, and maybe this is for Steve, but I’m curious, we don’t – I don’t have a great track record of understanding sort of the sales cycle around real world evidence versus an affordability sales cycle. Is this – does it come out in an RFP form factor, the difference between a financial messaging sales cycle and a real world evidence sales cycle? Is there a lot to talk about there or is it kind of pretty similar?

Hey, Eric, good to hear your voice.

Thanks a lot.

It’s a little bit of a faster sales cycle, Eric, it’s not depending on RFP. But it is a little bit longer of an execution cycle because of the modeling that takes place at the initial – at the onset of the program launch. So the speed to revenue is roughly the same, even though the sales cycle is a little bit shorter, because you do have to architect the solution before implementing it.

Okay. And then the manpower ads that we’ve talked about here in Q3, are you guys – is that manpower expense for an RWE? Is that part of a cost of revenue? Is that on the OpEx side? Is that part of the OPEX ramp?

Yes, that would be part of the OpEx.

You want me to take that?

Yes. Go ahead.

Yes, the majority of that will be an SG&A.

Got you. Okay. Thanks for taking my questions and good luck in Q4.

Thanks, Eric.

[Operator Instructions] Your next question comes Marc Wiesenberger with B. Riley Securities.

Thank you. Good afternoon. As the data landscape continues to evolve, I’m wondering if you could talk about the company’s ability to incorporate both structured and unstructured data and how you link the multiple data sets to provide insight for your stakeholders?

Yes. Hey Marc, good to hear you. That’s – it’s interesting. And when we first started realizing the value of this platform, we really didn’t drive a lot of the decisions with data, right. It was the ability to connect. It addressed a huge challenge for our clients and we had a great network of partners. But as we’ve grown and invested in the business and organized all the transactions we’ve facilitated over the years and then obviously brought in great people and it all comes down to great people with different perspectives within the health world, it was clear that we could use data on lots of fronts, one to build business cases for our clients, two, to measure return on investment for the clients. And then, as we really got sophisticated, I’m going to hand it over to Steve, because he’s been the architect with a few other people on this is, we could actually see a way of using data to enable a real time action at point of care, which has never been able to bend down and very powerful. And I’m going to ask Steve also just to answer your question a little bit continue what I’m saying, but also give a specific example in oncology, which I think will be meaningful to the group.

Hey Marc. Thanks, Will. Yes, I think one of its an excellent question, Marc and super astute. I think what we’re trying to do now is leverage the interoperability that we’ve created between these disparate data ecosystems, to be able to help physicians identify earlier on patients that would qualify for a therapy. And then obviously, we have the tools already in place to help onboard those patients with affordability and adherence and all the other stuff that we’ve traditionally done. In the oncology arena specifically, we’ve got a program running for triple negative breast cancer. That is not – it’s an ill defined indication. So there’s no code inside of most of these systems that would identify a patient as a triple negative breast cancer patient. And so we’ve worked with some with a manufacturing partner to be able to create a criteria and algorithms to be able to search the ecosystem of patients to help find those patients. And then notify the physician that they’ve got a potential patient that would qualify for those therapies. The algorithms and the rigor that they have, and the platform allows us to essentially serve that network or ecosystem of data at an individual patient level, which is unique and then take an action immediately with the physician to aid the physician in helping the patient. And I think that’s we’re most excited about. In the case of this specific therapy, it’s a 6 to 12-month improvement in the patient’s overall survival, which is a massively meaningful achievement in the life of a cancer patient. So it’s something we’re really passionate about, very proud of, definitely more to come Marc, but early days look really exciting.

Yes. Thanks, Steve.

Very helpful. Thank you. Two more from me. What percent of the brands that you’re currently working with? Do you think are ideal for your real world offering? And then within the pipeline, can you provide any insight into what percentage are looking to leverage the real world evidence and how do you expand – how can you proactively expand that universe?

Yes. So it’s a good question. Obviously, we’ve got a lot of brands, we’ve looked at – we’ve obviously segment them before we even go after them. And so first off, all our brands are highly relevant, all have significant marketing budgets and meet real needs of patients. Secondly, it’s really critical that there’s a clear ability to find an additional prescriber or as Steve just described bring a patient to this surface for that position. And I would normally not say all our brands, but given the pandemic and the amount of disruption that has happened with just the connectivity between the manufacturers and HCPs and patients, there really isn’t a brand that doesn’t need help finding and highlighting these things. Doctors are busy, they’re on their computers. They’re dislocated, people are wearing masks, it’s chaotic. So I really think we’ve got the ability to bring it in now at scope and scale, they’re all relative. Some are not complex and some are very complex. But Steve, you want to add anything to that? I just it feels like there is a role, a little bit for RWE and everything, but they’re obviously different levels.

Yes. Well, I think that’s exactly right. Marc, I think as you think about the curation of our pipeline and some of stuff we’ve already said sort of openly around the 20% of it being oncology and a good portion of it moving towards specialty. Ultimately, what that means is that there are higher degrees of complexity in both identifying the patient, as well as onboarding them, getting them on the right therapy and then driving adherence to make sure that you get a proper outcome. And so all of those complexities lend themselves to a real world evidence in Caucasian in the program. And so I think as Will said, we wouldn’t say it’s every single program, but the vast majority of the programs that we’re looking at, and as we continue on focusing more on specialty and oncology, I think you’ll continue to see that RWE follow suit, because it’s necessary to drive the ROI that the clients will be looking for. And more importantly, it’s necessary to be able to help find the correct patients which is the biggest challenge, right. It’s the clocking of it. Especially in oncology where every minute counts to help the patient.

Sure. Sure, very helpful color. And then just the final one, as we’re moving through the Delta surge, I’m wondering if your discussions with customers and they’re talking about – and their allocation of resources between digital and more legacy channels has changed at all. And then along those lines, Ed before coming to OptimizeRx, you were on the other side of the table at a life sciences company. So I’m wondering how your perception of the company’s change now that you’re able to see behind the curtain. Thank you.

Yes, actually, I’m going to pass that whole set of questions over to Ed. I think he has a really fresh perspective. I can’t speak to, but I think in the market he can and then yes, let him speak for himself. Ed, its all yours.

Yes. Thank you. Hi, Marc. How are you? Yes, I would say generally speaking over the last two years, there’s been quite a shift in how pharma actually engages in the commercial space, as well as R&D and the enterprise level. The first thing digital is no longer just in the innovation fleet. It’s really a new way of doing business. And from my perspective, I think that’s kind of going to be here just to stay for the-long term. Secondly, pharma typically carves out a strong core capability for itself where it can really win. Technology historically has not been that area. So in my view, as we move forward with the digital adoption and acceleration of that adoption I think pharma is going to partner up with those kind of who are more capable of providing that kind of service in that kind of technological insight to drive their operating model forward. And third, I would say scale is going to matter as time goes by pharma, as you can imagine doesn’t have the ability to buy technology and digital capabilities and small bits and pieces. It’s going to want to go to kind of a one stop shop where you can buy a lot of capabilities without having to spread itself in. So those companies that can scale in the space are going to be long-term winners. I think in this new way of doing business. And as far as my perception is concerned, I would say all of my expectations have so far been met or exceeded. I think it’s a really innovative company with a very interesting competitive position that is going to be quite attractive for pharma as this new operating model emerges. Hopefully that answers your question.

Thank you for that. And it does. Thank you. Congrats on a good quarter.

Thanks, Mark. Thanks, Ed.

We are showing no further questions at this time. I will now hand back for closing remarks.

Well, thank you everyone. And we look forward to seeing you in our next earnings call. I’ll be talking to many of you through the investor conferences inside of Q4. Stay tuned, and we appreciate your time and belief in us as a team, take care.

That does conclude our conference for today. Thank you for participating. You may now disconnect.