Good afternoon and thank you for joining OptimizeRx Fourth 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; 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. At the conclusion of today’s earnings call, I will 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. Hi, everyone. I want to begin by thanking all of you for joining us today. While the last 12 months have been an exciting period of operational and commercial growth for OptimizeRx, we have been more excited for the year ahead as we move forward with continued momentum as a company. The major investments we have made over the last year has centered around setting up the organization for future scalable growth. We have completed a strategic build out of OptimizeRx’s leadership team on the solutions and digital enablement front we launched several AI and data centric solutions expanding our strategic capabilities, positioning us well to focus more on the key markets including, specialty medications. And lastly, we made huge progress in building out additional reach to doctors and patients. In essence, we've invested in our three primary growth drivers to continue our organic growth trajectory. To illustrate this point and how we build customer stickiness as a technology partner to life sciences, earlier this week, we announced the launch of a large scale therapy initiation program with a top 10 pharma client. The program accelerates patient’s access to a new specialty drug that can reduce inflammation for chronic condition and significantly improve the quality of life for this previously underserved patient population. The pharma client is leveraging OptimizeRx’s suite of digital solutions to streamline therapy initiation for these patients, by ensuring that physicians have immediate electronic access to the appropriate enrollment forms needed to prescribe the medication. This is our largest enterprise scale therapy initiation program launched to date. As the new specialty therapies continue entering a crowded market with complex requirements, and sometimes limited pharmacy distribution networks, OptimizeRx is well positioned to help life sciences get patients on therapy quickly and more efficiently. We are…

Thanks Will, and good afternoon, everyone. As it all our calls a press release was issued with results for our fourth quarter ended December 31, 2021. A copy is available for viewing and may be downloaded from the investor relations section of our website. And additional information can be obtained for our forthcoming 10K which will be filed in the coming release. Turning to our financial results for the fourth quarter ended December 31 2021. Our reported revenue for the period was $20.3 million, an increase of 24% over the $16.4 million from the same period in 2020. The increased revenue resulted from growth in sales across their access, adherence and affordability solutions. Gross margin for the quarter increased from 52% in a year ago periods to 61% in the current reporting period. The gross margin increase is the result of solution and general partner mix. As we highlight in our earnings release, we expect our gross margin to remain relatively constant in the 57% to 60% range for the full year 2022. Operating expenses increased to approximately $11.8 million in the fourth quarter of fiscal year 2021 as compared to approximately $7.2 million in the same year ago period. The increase in operating expenses was primarily related to salaries, wages and benefits, and other human related costs as we invested in the expansion of our team to support future growth by expanding our commercial activities, and enhancing and growing our solution offerings. We delivered net income of $623,000 in the fourth quarter of fiscal 2021, as compared to a net income of approximately $1.4 million during the same period in 2020. For further details, you can refer to our MD&A section of our upcoming 10-K. On a non-GAAP basis, net income for the fourth quarter of 2021 was approximately…

Thanks, Ed. On behalf of the team at OptimizeRx, I want to thank everyone for joining us on the call today. The industry tailwinds that are driving the evolution and reinvention of how technology is getting broadly applied in the healthcare industry are going to remain a big part of our success for years to come. We have assembled an incredible team in order to help with our execution. And we have a solid strategic roadmap in play for 2022 and beyond. So far as execution and KPIs go, we believe that we have set a pace of achievement that is not only attainable, but meaningful be transparent for our investors to track in the days ahead. It continues to be an honor to be at the helm of the OptimizeRX Company, which to date has been a wonderful blend of financial performance centered around improved patient care delivery. Looking forward to the next call, and a wonderful 2022, thank you. Operator?

Thank you. [Operator Instructions] And we will go to our first question from Ryan Daniels with William Blair.

Congrats on the strong end to the year. And thanks for all the additional KPIs. I'll add my kudos there; it adds a lot of visibility. So we appreciate that. A couple questions in regards to some of the metrics you frequently disclosed that weren't in the press release. Can you update us on the current status of the pipeline and things like close rates and maybe average contract value that you saw on your enterprise deals in the most recent quarter?

Hey Ryan, thanks. Yes we're really taking the direction of sticking to the KPIs, but so not no specific numbers. But pipeline remains incredibly strong. This is a time you are aware it is still building, but a lot is closing. And so I still feel good about all the data we shared before. But we really want to focus in on these new KPIs by revenue by manufacturer, and employee and net revenue retention. But I will say that we, given the team we enhanced, given the relationships we have just that visibility that we get, obviously made us feel confident enough, backed by pipeline and historical close rates, and all that good stuff, to give guidance for the year. So we're really excited about that and look forward to tracking against it really well.

Okay, that's fair enough. And then just a couple more bigger picture questions, as you move more towards enterprise level contracts and AI driven solutions, real world evidence? Is there a need to develop any areas of your technology more or look to M&A activity to fill any gaps or just any thoughts about how the offering might develop going forward, given the needs and your client base?

Yes, you've heard it in our comments or prepared remarks. We really did a lot of investing over the last few years to a point where we can layer in solutions at a fraction of the cost and get really immediate ROI, just because of the access we have to the clients. So no need for extreme investment going forward. It's really about focusing on our growth drivers, which is the land and expand within the client, keep that net revenue, retention solid. It's also about just continuing to get additional reach, which we've made some really good progress over the last 12 months, and anticipate being able to reach other channels as well, wherever doctors and patients are. And then as you said, the new solutions, it really makes the relationship really, I think we're proud of all of it. But the layering of additional solutions through a time where teammates are not together, it's all virtual. We really spent a lot of time innovating and rolling it out and getting to commercial success pretty quickly. So I would anticipate, we'll always be an innovator in the space and feel like we've, by focusing on that patient journey for our clients, we've been able to innovate and leverage and get to get to market very quickly. Feel free, but Steve, you want to add anything to that?

I think that was great. Hey, Ryan, how you doing? It's good to hear your voice. I would just add one more thing, which is diversification of therapeutic areas and specialties as we expand the reach to physicians and Ryan, I think you and I have talked about that before, but part of our focus on the channel side has been reaching more specialists, whether it's oncologist or immunologist, etcetera. And we've succeeded in that largely. So I think that also supports this addition of the AI and real world evidence efforts that we've had is we're looking for sort of more difficult patients to find harder, harder physicians to support because of the complexity of the diagnosis of the patient. So good stuff going on there.

That makes a lot of sense. And then, given your ability to work with providers to get patients on appropriate therapy quicker, which I know is a big burden for them a lot of times, especially with prior authorization, which can impact clinical outcomes because they might not get patients on quick enough. I'm curious if there's an opportunity for you also to work with healthcare payers or at risk provider groups to help enable that more rapidly because it should drive cost savings for the system longer term by getting these patients on medications, especially, especially medications on a more rapid basis.

Yes Ryan, thanks. So we really made a decision to stay focused on our clients, which is, which are the manufacturers. But you can see why this platform is so attractive, right? What we built our rails right rails into the point of care. Today, we use that 100% for the manufacturers, to reach physicians and patients for all the reasons people know, but mostly focused on access, affordability and adherence. But if you're an investor listening to this, it's important to note that that is valuable to multiple other industries. But the team we have now is really 100% focused on the pharmaceutical manufacturers. And as we mature, we'll assess those other segments.

Great, fair enough. I'll hop in the queue. Thanks again, guys. Appreciate it.

Thanks, Ryan.

And we'll get next to Sean Dodge of RBC Capital Markets.

Yes. Thanks. Good afternoon and I'll add my congratulations on the progress this past year. I guess where I want to sort of it's just maybe thinking about the EBITDA trajectory. Bill, you talked about doing the work to build an infrastructure that can scale. You did some investing; you kind of ramped investing there in the latter part of last year. Is that pretty much done now? Or is there still some headcount, you think you need to add here near term and we're just trying to understand how much of this incremental revenue you're guiding to we should be expecting to drop through to EBITDA?

Yes, great question. Thanks, Sean. So yes, we went in heavy last year. But I will say, just a reminder of last year that was all organic growth, with investing for growth forward. Okay, so I think when people dissect Q4, they're going to be pretty encouraged by what we can do as a company. And, and I think they should expect it going forward. We are proud that we're a technology company, we're proud of our new KPI around revenue per team member. And we really want to stay there. And, and we feel like we can, and if you think about our clients that, as they are digesting this, this massive shift in sort of methodology around commercialization, to incorporate more digital. They are looking for partners who can take and scale and not have to, and do it at speed. And I think we meet all those criteria, right, we're compliant, speed, transparent. And we're nowhere near and capacity against our network, either by solution or by reach. So yes, lots of lots of room ahead on that. I think you can expect limited investment, although I will caveat all of this, that we're still in early stage public company, with a lot of opportunity. And I think we've built the credibility up that when we want to invest, it usually pays off for everybody.

Okay, great. And maybe on the opportunity. See, you've talked before about the ROI your solutions are generating right now. I think he said the prepared remarks 13 to one is where you are at currently. And in the pricing power that should afford you, at some point? How far away do you think we are from -- we get more aggressive with pricing? And then maybe what are your thoughts around how you actually operationalize that how you actually do that?

Yes, I'll start then I’ll ask Steve to kick in. But our clients are very sophisticated at procurement, right? It's not like it's a resident, and you can just increase it a percent or two, these are, these are technologies and digital services that are new. And, and what you really need to do is prove your value with your ROI and then keep adding value, right, just because you were great last year doesn't mean you just do the same thing over and over, you have to continue to innovate and add value. So our goal, as we saw with adding our WD to what was a pre-existing type of message, is we could bring that at a higher value to the client. And therefore, it's not deemed a price increase. It's just an additional service. So we're really focused on that. It's how do you innovate and get away from a transaction mentality, which a lot of I think the market has and we want to stay more on that high value, high touch, high ROI but Steven you can chip in a little there?

I think you nailed it. Well I, in addition to that, Sean I think, as we as we continue to migrate into that specialty area, and looking at harder to find patients, and trying to access those and communicate with those physicians that are treating those cohorts of patients, the value volume discussion comes into play. And so where volume of patients may be lower, the capture rate is much more valuable. And so we've got additional pricing power in those areas. So it's sort of that one two punch of commercialization of new technologies that allow us some margin expansion in that regard, and looking for very hard to find patients that now the technology stack that we've built that underpins all of these efforts, gives us the luxury of being able to say, hey, we can find patients in the healthcare deserts of the Midwest. We can find the physicians that are treating and we can communicate at relevant points of time when the patient is with the physician.

Okay, that's helpful. Thanks, again.

Thanks, Sean.

And we'll move to our next question from Marc Wiesenberger of B. Riley Securities

Thank you. Good afternoon. I'm wondering if you could talk about the buyers activity in the fourth quarter relative to the fourth quarter of 2020? And do you get a sense going forward that that 2020 was an anomaly in this past fourth quarter will be more representative of future periods. And then also, given that we understand your contracts are usually structured on an annual basis. What percentage of your customers last year made intra year changes to contracts either up or down? And I guess as your offerings evolve, is that something we should expect to see move around more?

Hey Marc, good questions. So I believe well, we talked about this a little bit back in the Q3 call, but obviously going into 2020, our clients had no idea what was coming, right. So you had massive disruption spend and therefore outsized potential, buy-ups probably unprecedented by up for Q4 of 2020. Coming into 2021, they knew the disruption and assumed it would be all year, just given, given that we're in the healthcare space, and they are closely monitoring hospitals and patients and doctors. So yes, I would say that was the main reason. And frankly, we don't, we don't budget or plan around buy-ups so that a couple of times it's, it can happen if it does, if you're a company like ours, you can execute on those buy-up dollars. That being said, we obviously saw that net revenue retention grow, we saw a really steady climb through the year. And we anticipate that in 2022 as well. But I do think the digital shift makes the spend more efficient. They really do get more for their money. I'd like to maybe have add comment a little bit on that, because he came over from one of our, our one of the pharmaceutical companies, just from his perspective, but I would see it just smoothing out over time, just because of the efficiency around digital spent.

Yes, thanks Will.

Hey Marc thanks for the question. Just to kind of round off what Will was saying. So back in Q4 2020, our buy-ups probably to about $4 million, $4.5 million. And we certainly saw that dropped quite a bit in Q4 of this year. Just back to what Will said, I think pharma companies were much better prepared for what was in front of them in 2021. As far as what that means for 2022 and beyond. I think this new model is really now starting to solidify itself as the new normal kind of hybrid model of using digital and using technologies to supplement the traditional model of salesforce engagement with HCPs seems to be sort of the new normal. And that's basically what we're betting on. So hopefully, that helps.

It does, appreciate it. But if you could also just specifically touch on kind of the intra year changes to contracts. And is that something that maybe could flex up based on the efficiency and kind of speed and how digital can be allocated?

Yes, obviously we saw a big increase in brand count last year, which was people we maybe hadn't worked with before coming into testing. And as we've said, our client is a trust but verify and build the relationship they're not an all-in kind of entrance. So we do see six months contracts, we see 12-month contracts. It really, it depends on the ROI that's going to be driving, whether there's an increased in a year, I can't give you percentages of a breakdown on video versus 12. But obviously, our net revenue retention speaks to, to growth within our current client base. So and I would expect me to anticipate that to continue. Matter of fact, there might be a chance for upside given so many people came into the platform last year, and a lot of that measurement has now happened. So I’m pretty encouraged by the last year momentum into this year thus far.

Very helpful. I know that you're providing total NRR. But could you talk about that for your top five and top 10 customers?

Sure Ed, do you want to cover that?

Yes sure. Yes so as you know I'm sure Marc large pharma companies have lots of affiliates. So a way to look at in our is to really hone in on the parent companies. So if you look at the top five, at the parent level, that's 127% number that's just saw off with a total of 20 becomes about one way to. And if you've spent it out to Parent Plus affiliate, we're in the 160s. But our plan is to really stay consistent to the parent company level, just to be basically an apples-to-apples basis going forward.

Understood. Can you talk about or quantify I guess the percent of revenue that comes directly from pharma relationships versus through agencies, and I guess, as your engagement with direct pharma kind of increases moves up the food chain. Do you have a sense of how much your customers current digital marketing spend is allocated towards point of care initiatives? And I guess maybe ultimately, where that percentage could move over time?

Steve, you want to start with that one?

Yes, happy to. It's a fantastic question in terms of what the percentages of the actual budget that's moving towards digital. I think it's a little bit of a moving target. I mean, you've seen several announcements throughout the last sort of quarter of last year, and even the first quarter of this year, by large manufacturers that are scaling back on face to face commercial resources, or salespeople, they're in the office. And some of those dollars, a lot of those dollars, are being redeployed and repositioned in digital and digital ways. A good portion of that is point of care. I think that will continue to be the case because you need to be able to communicate with a physician when a prescribing decision is being contemplated. Still early to tell how much of it will be deployed against point of care. But I would say it's probably a good portion of it. So, sort of more to come on that.

Yes, and I would just add that I could chip in on the question of agency versus direct. Marc, as you've heard from others who sell to Pharma. Pharma relies pretty heavily on agencies for a couple of things. One is just screening new entrants with really great solutions that just haven't proven themselves yet. They also do a lot of the content generation which we do, do not do any of and, and so they really act as service or consulting businesses to the pharma. So it doesn't matter if you have a direct or indirect you, you absolutely will deal with agencies if you're doing anything on marketing side of Pharma. That being said, what we've found is since last year, and clearly a top down meaning to digital enablement to reach doctors and patients, there's just the higher level involvement, which generally means you get more direct relationships. And you have to remember, OptimizeRx is not a website. It's not a place doctors have to go to. It's where they work. It's their day to day six hours a day. And, and so it's a business. And I think you just get a different level of seriousness from the client when it's that way. Now that that's good and bad, good in that it's serious and you get more exposure. That just takes a little longer to make sure everyone's okay with it, because it's so serious. And so, I would say we will trend towards more direct relationships, but we will always work with the agencies just like partners because they're essential to the ecosphere.

Very helpful color there. And then the final question from me. I think it's been long understood that certain EHR platforms have different interoperability standards relative to others. And with the recent Oracle Cerner deal, how do you expect the policies to change if at all, and what impact could that have on your business in the near and medium term? Thank you.

Sure. Thanks Marc. That is a big question. And we are not an EHR. So probably not the best qualified to opine on it. But I would say, if I think of it from the doctors and the patients perspective, you've got a lot of pressure on having a good user interface today. And I think that companies that employ the tools that doctors and patients want in a digital way, where it's not painful to look at, and it doesn't take too many clicks, all this user interface we're getting used to. I think those are going to be real winners. What happens with the Cerner Oracle, that's, that's hard for me to know. But I do think it's positive, I think it puts more tech energy into the ecosphere. And I do think consumerism is going to drive the need to have access to what everything, all your data whenever you want it. So we shall see.

Great. Thank you very much.

Thanks, Marc.

And we move on to our next question from Eric Martinuzzi of Lake Street.

Hey guys. Had a question really want to focus a couple of questions on the profitability of the business? I know you didn't give guidance for adjusted EBITDA, but you kind of lean that way a little bit. And one of your prior responses Will talking about the profitability of Q4 and I believe that that's repeatable, my mind immediately goes into something simple, like Q4 20 million revenue formula and adjusted EBITDA, they just gave guidance for a million for this year. 20% EBITDA margin on that, is that an oversimplification? You know, is that -- is that what you were implying by the comment regarding Q4 profitability?

So I love you Eric, you hold us accountable. Actually, it goes back further, if you Eric's been with us a long time, first analyst to cover on us. I'll call out so you remember Eric, when we were talking and trying to tell everyone about our story, the aspirational $100 million run rate with 25% to 35% EBITDA. That hasn't changed. And I think we're just building more and more credibility towards it. Right? So I, the reason why we don't include such granular guidance is because we also are early stage and I know, the investors trust us to invest if we see we need to, and we get that back, but now still feel very good about our profile. It's very important. It's interesting; obviously, the market is valuing very highly right now. And we've always valued at highly. So having those two come together is going to be I think, good for us as a company.

Okay. And I realize it's the danger of getting into the guidance game is the you give a mouse a cookie, they want a glass of milk. But I certainly appreciate the transparency here. As we look out to, as we look at the cash on the balance sheet, and I'm setting aside kind of opportunistic M&A, but what is the thinking on where that cash is, by year end? Would you go down a path of potentially using it for share repurchases? Would you double up on product investment? Again, aside from opportunistic M&A?

Yes, we've really ruled out, we're not at the stage of buying back equity. I don't think our investors want to do that they want us to invest. If you talk about a big Tam and a lot of whitespace, that means you keep investing forward. Maybe we'll get there someday. But we actually last year set out a pretty aggressive plan to invest in ourselves for this year, particularly with our channel partners, where part of the part of what the pandemic did for physicians and patients is it just enabled them digitally to look at tools to hear a physician, run your practice and deliver care and if you're a patient, just everything from savings to adherence to telehealth. And we're really going to work hard with our partners to make sure all of our tools get to every doctor. And so that's where we would be investing if we do obviously M&A, as you said it's opportunistic.

And is that more of a people or is that more of an incentives?

It's yes, no, it's more tech and incentive. Not people.

Okay. Thanks for taking my questions.

Thanks, Eric.

We'll go to our next question from Harvey Poppel of Poptech Capital LLP.

Yes. Will, another sensational quarter. I sound like a broken record, like a very positive, broken record. Like to keep sounding like that. The question I have is to focus on the channels; your channel of delivery is primarily through EHRs. It always has been. And I don't hear too much mentioned, you did answer one of the questions about Oracle acquisition of Cerner. But, when you talk about the EHRs, and specialty, are you at all constrained as you move into these specialties? I know some of them are very fragmented with a lot of tiny, tiny EHRs and no dominant EHRs. Do you run into that as a gating factor in your ability to generate more revenue, even if you have the brands and the pharma and everything else?

Yes, thanks Harvey. Keep the record broken, it's good. So we about two years ago, we really set out as an initiative to increase our access to the ology [ph] system mostly oncology and cardiology. And I'm really happy to report we've increased both by exponential amount. And to your point, they are fragmented, but there are ways to get to them. And I can tell you, we figured it out. And we do it in a way that's incredibly smooth to the HCP. And so no, we do not have any bottlenecks in any therapeutic areas today. And we do still anticipate, half of our attention to be focused on those specialty medications. We had the biggest increase last year was just access to oncology. It's sensational. The team did a great job. And, I want to call him out because that's material for this company. And so today, no bottlenecks.

Great. That's it for me. Thanks a lot. Will.

Thanks, Harvey.

And with no other questions in the queue, I will now turn the call back to Will Febbo for final comments.

Terrific, thank you. Hey, we're really proud of the quarter, questions were terrific. We look forward to talking to the investors over the next couple of weeks, really focusing in on the KPIs. What we found so far is having those KPIs really allows us to talk more about the business than the numbers because we've given guidance for the year. So hats off to the team for being able to do it and have that kind of visibility with our clients. And, culture is a big deal at OptimizeRx. And we continue to just create a great place to work with a lot of value to the clients and ultimately the investors. So thanks, everyone for your time. And we look forward to talking to you again next quarter.

And all right. Thank you, sir. And before we conclude today's call, I'd 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 contain forward-looking statements within the definition of Section 27A and the Securities Act of 1933 and Section 21E of the Securities Act of 1934 as amended. The forward-looking statements should not be used to make investment decisions towards anticipate, estimate, expect, possible and seeking and similar expressions identify forward-looking statements. They may speak only to the date that such statements are made. Such forward-looking statements in this call include statements regarding the estimation of total addressable market size, market penetration, revenue growth, gross margin, operating expenses, profitability, cash flow technology, investments, growth opportunities, acquisitions, upcoming announcements and the need for raising additional capital. They also include the management's expectations for the rest of the year, and adoption of the company's digital health platform. 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 with and contemplated by or underlying these forward-looking statement. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to the effect of government regulations, competitions and other material risks. Risks and uncertainties to which forward-looking statements are subject to could affect business and financial results are included in the company’s annual report on form 10Q for the quarter ended March 31 2021. This form is available on the company’s website and on the SEC website at sec.gov.