OptimizeRx(OPRX)2024-08-09 00:06Financial Data and Key Metrics Changes - The company reported Q2 2024 revenue of 13.8 million in Q2 2023 [11] - Gross margin improved from 56.6% in Q2 2023 to 62.2% in Q2 2024, attributed to higher DAAP-related revenue and a favorable channel partner mix [11] - The net loss for Q2 2024 was 0.22 per share, compared to a net loss of 0.24 per share, in Q2 2023 [11] - Non-GAAP net income for Q2 2024 was 0.02 per share, compared to a non-GAAP net loss of 0.01 per share, in the same period last year [12] - Adjusted EBITDA for Q2 2024 was a gain of 0.8 million in Q2 2023 [12] - Operating cash flow for the first half of 2024 was 15 million at the end of Q2 2024 [12] Business Line Data and Key Metrics Changes - The company closed 17 DAAP deals in the first half of 2024, including eight in Q2, indicating strong client engagement [7] - The average revenue per top three pharma clients is 2.7 million for the top 20 clients, highlighting a significant disparity in revenue contribution [6][13] - The net revenue retention rate improved to 124%, up from 89% in Q2 2023 [13] Market Data and Key Metrics Changes - The company is experiencing strong demand for its DAAP solutions, with a significant number of deals in the pipeline, approximately 50% of which are from the DTC side of the business [8] - The company has seen a material separation in revenue contribution between its top clients and the broader client base, indicating a strong market position [6] Company Strategy and Development Direction - The company aims to convert over 300 supported brands to DAAP, with significant progress made since the second half of 2023 [5] - The strategy includes establishing a more consistent pricing mechanism to enhance revenue recognition and reduce volatility [5] - The company is focused on cross-selling opportunities between HCP and DTC clients, reflecting a strategic integration of services [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue recognition from a delayed 15 million remaining to meet current expectations [9][22] Other Important Information - The company continues to focus on enhancing its data analytics capabilities to provide better insights to clients, which is expected to drive future growth [25][26] - The integration of Medicx Health is progressing well, with expectations for improved performance in the second half of the year [30][31] Q&A Session Summary Question: What caused the delay in the large client deal? - Management confirmed the delay was due to internal process reviews rather than legal issues, with high conviction that the deal will commence in Q3 [14][15] Question: How is the sales pipeline trending for HCP versus DTC? - Management noted continued interest in both HCP and DTC activities, with a strong demand for integrated marketing solutions [16][18] Question: What is the current overlap with Medicx and future sales headcount needs? - Management indicated good integration with Medicx and sufficient staffing to pursue sales opportunities, with positive trends expected in the second half [19][30] Question: Can you provide insight into revenue visibility and seasonality? - Management stated they have about 80% visibility on revenue for the year, with typical seasonality showing 25-30% of revenue in Q3 [22][26] Question: What is the outlook for DAAP deal sizes and average revenue per client? - Management noted that DAAP deal sizes are increasing with client tenure, and they expect to convert more clients to similar revenue levels as top clients [27][28]