Good afternoon, everyone, and thank you for joining OptimizeRx's Third Quarter Fiscal Year 2025 Earnings Conference Call. With us today is Chief Executive Officer, Steve Silvestro. He is joined by Chief Financial and Strategic Officer, Ed Stelmakh; Chief Legal and Administrative Officer, Marion Odence-Ford; and Chief Business Officer, Andrew D'Silva. At the conclusion of today's call, I will provide some important cautions regarding the forward-looking statements made by management during today's call. The company will also be discussing certain non-GAAP financial measures, which it believes are useful in evaluating the company's operating results. A reconciliation of such non-GAAP financial measures is included in the company's earnings release issued this afternoon as well as in the Investor Relations section of the company's website. I would like to remind everyone that today's call is being recorded and will be made available for replay on the audio recording of the conference call on the Investor Relations section of the company's website. Now I'd like to turn the call over to OptimizeRx's CEO, Steve Silvestro. Mr. Silvestro, please go ahead.

Thank you, operator, and good afternoon to everyone joining our third quarter 2025 earnings call. We had a strong third quarter with results ahead of both consensus estimates and our internal expectations. Our Q3 revenues increased 22% year-over-year to $26.1 million, and our adjusted EBITDA was $5.1 million, an improvement of over $2 million from the same period last year. Our contracted revenue remains well ahead of last year's pace, underscoring the success of our focus on operational excellence, our dedication to delighting customers and deepening relationships with trusted partners. Before we move on, I want to take a moment to thank the OptimizeRx team. We deeply appreciate their dedication and hard work as we navigate an increasingly complex and rapidly evolving digital pharma marketing landscape. The industry is in the midst of a major transformation and the company's products and services are positioned to fundamentally redefine how pharmaceutical companies, patients and prescribers connect. Our mission-driven culture fuels this progress and enables us to attract, retain and strengthen the relationships that make us a trusted and enduring technology partner. With that said, I'm happy to report we are increasing our guidance for the year and are looking for revenue to come in between $105 million and $109 million, with adjusted EBITDA to be between $16 million and $19 million. Moreover, while it is still very early, we are seeing favorable RFP trends for 2026. As a result, we are introducing initial fiscal year guidance 2026 with revenue expected to be between $118 million and $124 million and adjusted EBITDA expected to be between $19 million and $22 million. In addition, subsequent to the end of our third quarter, we paid down an additional $2 million of our term loan principal on top of the debt payment schedule. At this time, given the cash flow we are seeing, we intend to continue to pay down our debt at an accelerated rate and do not believe we will need to access the equity capital markets for the foreseeable future. As evidenced by our strong results, we are firmly hitting our stride. Disciplined cost management and targeted cross-selling strategies grounded in enabling customers to optimize budget allocation and maximize script lift are driving sustained momentum into Q4 2025 and beyond. Our strong third quarter performance makes it clear that our goal of becoming a sustained Rule of 40 company is within our sights. Perhaps most notably, average revenue for our 5 largest customers over the last 12 months continues to grow and now stands at over $11 million. We believe OptimizeRx is uniquely positioned to drive meaningful long-term growth and sustainable shareholder value. With one of the nation's largest point-of-care networks, we provide pharmaceutical manufacturers the ability to reach health care providers directly at the moments that matter most. Building on this foundation, we've developed a purpose-built omnichannel technology platform that integrates advanced patient finding tools like DAAP and micro neighborhood targeting. These capabilities are redefining how pharmaceutical companies, physicians and patients connect, communicate and act, helping to improve patient outcomes while transforming engagement across the healthcare ecosystem. Our reach across both the point-of-care and direct-to-consumer channels provides a durable and defensible competitive advantage. OptimizeRx is the only player with the scale, technology and data integration to engage providers and patients seamlessly, enabling us to deliver the industry's most comprehensive commercialization platform. This allows us to support customers across the full product life cycle, deepen client relationships and capture greater share of long-term value. As we've discussed on previous calls, a key focus moving forward is to further showcase our reach, scalability and our role as a trusted strategic partner, helping pharma manufacturers address some of their most pressing commercialization challenges. These include enhancing brand visibility, reducing script abandonment, improving interoperability and supporting the growing shift toward complex specialty medications. I believe our success in helping our customers address these challenges is best evidenced by our strong ability to build on the relationships and increase our engagements with our largest customers. I'm confident that continued execution in these areas, combined with our ability to deliver strong ROI and drive impact and script lift for our customers will translate into meaningful long-term shareholder value. We believe our momentum positions us to capture greater market share and expand our participation in the pharma industry's multibillion-dollar digital ecosystem. Our customers remain deeply connected with our integrated HCP and DTC offerings, and our goal is to keep them engaged across the full patient care journey. And with that, I'd like to turn the call over to our CFO, Ed Stelmakh, who will walk us through our financial results. Ed?

Thanks, Steve, and good afternoon, everyone. A press release was issued with the financial results of our third quarter ended September 30, 2025. A copy is available for viewing and may be downloaded from the Investor Relations section of our website, and additional information can be obtained through our forthcoming 10-Q. Third quarter revenue was $26.1 million, an increase of 22% from $21.3 million during the same period in 2024. Gross margin for the quarter increased from 63.1% in the quarter ended September 30, 2024, to 67.2% in the quarter ended September 30, 2025. Year-on-year gross margin expansion is tied to a favorable product mix, economies of scale as well as a favorable channel partner mix. Our operating expenses for the quarter ended September 30, 2025, decreased by $6.5 million year-over-year to $15.5 million as the third quarter of last year was impacted by a $7.5 million impairment charge. Meanwhile, our cash OpEx increased to $12.4 million from $10.8 million, largely due to higher bonus and commission payouts, which is directly tied to the company's strong year-to-date performance. As a result, we had a GAAP net income of $0.8 million or $0.04 per basic and fully diluted share for the 3 months ended September 30, 2025, as compared to a GAAP net loss of $9.1 million or $0.50 per basic and fully diluted share for the same 3-month period in 2024. On a non-GAAP basis, our net income for the third quarter of 2025 was $3.9 million or $0.20 per fully diluted share outstanding as compared to a non-GAAP net income of $2.3 million or $0.12 per fully diluted share outstanding in the same year-ago period. Our adjusted EBITDA came in at $5.1 million for the third quarter of 2025 compared to $2.7 million during the third quarter of 2024. Operating cash flow was $11.6 million for the first 9 months of 2025, and we ended the quarter with a cash balance of $19.5 million as compared to $13.4 million on December 31, 2024. The remaining principal on our term loan debt financing at the end of the third quarter was $28.8 million. And subsequent to the quarter's end, we paid down an additional $2 million in principal with our total principal paydown for the year standing at $7.5 million. At this time, we intend to pay down the principal on our term loan faster than originally expected as we look to continuously lower our cost of capital. With that said, we continue to believe that our healthy balance sheet will help us execute against our operational goals. Now let's turn to our KPIs for the third quarter of 2025. Average revenue per top 20 pharmaceutical manufacturer now stands at $3.1 million as compared to $2.9 million for the third quarter of 2024. Net revenue retention rate remained strong at 120%. Meanwhile, revenue per FTE came in at $820,000, topping the $732,000 we posted in the third quarter of 2024. We're encouraged by the improvements of our KPIs as we continue to execute against our strategy of driving profitable growth as a leader in our space. Now with that, I'll turn the call back over to Steve.

Thank you, Ed. Operator, now let's move to Q&A.

And the first question comes from Ryan Daniels with William Blair.

Sorry, guys, can you hear me now? Yes. Can you guys hear me now?

We can hear you, Ryan.

Okay. Sorry about that. Congrats on the strong print. I want to start with the 2026 outlook. It's nice to see that so early in the year, one of the few companies doing that. And I'm curious if you could just offer a little bit more color there on why you're providing it at this time. I assume it's due to some enhanced visibility with the contracts. And then maybe question number two, you mentioned the strong RFP activity being part of that. Are you just seeing more new clients? Is it more shift towards digital, more omnichannel, more shift towards HCP given some of the D2C challenges? Any color on what's driving that? Congrats again.

Thanks, Ryan. Good to hear your voice. So I'll start with the first one. We've been really articulating to 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, subscription momentum. And 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 HCP are looking very healthy. I appreciate the question.

And the next question comes from Richard Baldry with ROTH Capital.

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. Talk about either any one-time year-ago issues or other things because your net retention would argue that that's sort of difficult to do.

Yes. Thanks for the question, Rich. Good to hear from you. So 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 have moved principally towards 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 where 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. Again, we're going to continue to be very transparent, very conservative, not sandbagging, but look to beat the numbers that we put out there every time. So hopefully, you appreciate the transparency and conservatism.

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, 2 and 3 have been extremely strong. So it is more of a smoother sort of 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.

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.

I understand. It's just somewhat challenging to view it as a full year when there are only 90 days remaining. I expect the same question will yield a similar answer. If you consider the adjusted EBITDA guidance, it looks like there might be an increase in revenue of over 10% sequentially, but the adjusted EBITDA could be slightly down or perhaps just marginally up. Are there any one-time year-end expenses that could contribute to this, creating additional challenges? It still seems like it would be down year-over-year as well.

Sure. Ed, do you want to take that one?

Yes, I can take that one. Yes, look, I 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 being a little bit more conservative on what you think is going to happen with the channel and product mix. We do believe that we were shooting for hitting or beating the top end of the range.

And the next question comes from David Grossman with Stifel Financial.

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 fundamentally, what may be going on in the business that maybe 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.

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 GAAP principally, and then you've got micro neighborhood audience, which is that targeting capability for DTC. Both of those are data-driven technologies that lend themselves to becoming more subscription-like in nature. Then you've got our execution functions, both at 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 DAAP, 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 their 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. So that's the big part of it. Andy, Ed, feel free to chime in if you want to add more.

Yes. Please continue, Ed.

No, I was going to say, I mean, as you guys know, 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, right, looking at next year, we can start to make at least a general guide around bookends that we're going to shoot for. And as things progress forward, we'll continue to tighten that range. Yes, go ahead, Andy, you can add to that.

No, you got it. Both of you nailed it.

So thanks for all those details. So if 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?

Yes. Andy, why don't you take that one?

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 in the pipeline and we don't have visibility to. So again, we're taking a very conservative approach to providing guidance with bookings that we feel very comfortable with.

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?

Yes. So historically, between 5% and 15% of our business comes from new logos every year. So the remaining would be what you would consider net revenue retention on a normalized basis.

Okay. And that's the same assumption underlying your '26 guidance?

It is.

Yes. We don't really guide based on net revenue retention, right, but that's kind of how it just shakes out as every year progresses.

David, I wanted to mention one more quick point. We have observed strong growth in the mid-tier segment of our business, which includes clients not typically among the top 20, 25, or 30 manufacturers investing heavily. This growth is largely due to our ability to offer capabilities that can enhance, and in many cases replace, what these clients may struggle to manage internally. While larger manufacturers might have premium support, mid-tier businesses often do not. Our technology enables them to compete more effectively. This is the reason for the significant momentum we are seeing in that area, and Theresa, who leads our commercial organization, has done an excellent job fostering this growth. I wanted to highlight this as an important point.

The next question comes from Eric Martinuzzi with Lake Street.

I wanted to dive in on the RFP trends. You talked about they are improved. I was just curious, though, 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?

Yes, I'll start, and then I'll have Andy chime in, too. But all of the above, Eric, we're seeing more RFPs coming, and the RFPs are more directly pointed at what we want them to be, which I think is good. The market is seeing what we are 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 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.

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 DAAP and the micro neighborhood that are more sort of level loaded that kicks off to each of those types of campaigns.

Sure, I'm happy to discuss it. When you consider what DAAP and MNT or MNA do, their main focus is audience creation, driven by data across all campaigns. The technology identifies patients wherever they are. This approach resembles a software play, which aligns with a typical planning cycle where renewals occur earlier, as pharmaceutical companies manage that portion of their budget. The transactional aspects, primarily related to message distribution—whether at a healthcare professional level or through a demand-side platform—are usually budgeted quarterly, based on performance. We have been working hard to mature DAAP since its launch and, with the addition of the Medicx acquisition bringing in MNT, we have started to significantly transform the business profile. You can see this reflected in our performance this year, and it is expected to continue into 2026. This gives us strong visibility, and there is overall confidence in our direction, with a significant year-over-year increase in visibility for next year.

What is the best way to understand the revenue percentages for 2025 compared to 2026 between those two categories?

Your next question comes from Anderson Schock, B. Riley Securities.

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 in specific regions? Or is this going live across their entire national inventory?

Yes. 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. 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 disparate 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 going to take a stab at the TAM because it's not might take a stab at, it's really theirs. But the partnership is going to start rolling out pretty rapidly, I would say. And it's still early for us to start quoting projections on what we think it will 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.

Got it. And then I guess this current guidance that you've provided for 2026 factoring any contributions from this partnership?

No, zero, nothing. Too early for us to start factoring into forecast. We're just not going to do it yet.

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?

Sure. Ed, do you want to take that one?

Yes, sure. Yes. So look, I mean, it's typically driven by our product mix or solution mix and the channel partner mix. As we said before, as we scale the business, 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 DAAP and the DTC 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 there's certainly upside to that number as the year progresses.

I'll add just one quick thing to that, Anderson. In the third quarter, we had significantly less managed services revenue compared to the second quarter, and managed services revenue is our lowest margin product.

And the next question comes from Jeff Garro with Stephens.

I want to ask on the 2026 guide and the profitability side. If I calculate it right, at the midpoint, I see about 60 basis points of EBITDA margin expansion. I was hoping you could talk about the mix of gross margin expansion may be 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 see at the midpoint there?

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 DAAP and MNT 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 2026 gross margin expansion opportunities and where we've landed. Hopefully, that's helpful.

Maybe a follow-up on the operating leverage side of things. You have certainly seen, 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 5 or so quarters, but just a little more color commentary on your ability to drive additional operating leverage in the business would be helpful.

Yes, no problem. Please proceed, Ed. Why don't you take it? Go ahead.

Yes. So OpEx, as we said before, I mean, we have a highly leverageable business model as it is now. So as I said, on a cash basis, that was actually a bit of an increase, about $2 million versus last year. And 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.

And this concludes our question-and-answer session. I will turn the conference back over to Steve Silvestro for any closing comments.

Thank you, operator, and thank you all for joining us today. We're pleased to be building on 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.

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 include forward-looking statements within the definition of Section 27A and the Securities Act of 1993, as amended, and Section 21E of the Securities Act of 1934 as amended. These forward-looking statements should not be used to make investment decisions. The words anticipate, estimate, expect, possible and similar expressions identify forward-looking statements. They 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, our growth plans, creating shareholder value, becoming a Rule of 40 company, estimated 2025 revenue and adjusted EBITDA ranges, capturing greater market share, 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 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 in, contemplated by 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 contact with electronic prescription platforms and electronic health records networks and other material risks discussed in the company's annual report Form 10-K for the year ended December 31, 2024, and in other filings 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 replay starting later this evening and 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 your lines.