OPRX - NASDAQ

Good morning, everyone and thank you for joining OptimizeRx’s Third Quarter Fiscal 2023 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 Steve Silvestro; General Counsel 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 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 would like to turn the call over to OptimizeRx CEO, William Febbo. Sir, please go ahead.

Good afternoon. Thank you for joining our third quarter earnings call. I'm pleased to note that Q3 has been an exciting fiscal and operational turning point for OptimizeRx. As noted in today's press release, the quarter's financial results came in better than initially expected with revenue growing 8% year-over-year to $16.3 million, which is a record third quarter for the company. The improvement was driven by strong organic growth in messaging led by our DAAP enhancement. All said, our total RWD deals for the year now stands at 16, ahead of our original 2023 expectation of approximately 10 deals and a clear sign of client adoption. We're also increasing our guidance for 2023 and introducing preliminary guidance for 2024. Ed will go into more detail, but for 2023 we're now looking for revenue to come in between $68 million and $70 million with an adjusted EBITDA between $3 million and $4 million. $63 million to $65 million of the 2023 revenue guidance expected to come through OptimizeRx business and the remainder is expected to come through our acquisition of Medicx. For 2024, we believe our revenue will be at least $110 million with an adjusted EBITDA margin of at least 10%. Before we go further, I want to thank the OptimizeRx team for their tireless commitment and continuous effort to put into advancing our mission. In recent years, our efforts have created one of the most scalable industry solutions available to pharmaceutical marketers. Directionally, this has been no easy feat as OptimizeRx's results have come about through the shifting sands of both the industry changes as well as the early adoption of advancements related to the digital shift which has permanently altered the way pharma, patients and prescribers engage with one another. With that being said, we're seeing very encouraging momentum heading into the end of the year and going into 2024. The macro headwinds that we identified last year have begun to normalize. Moreover, our clients that had started initial pilot programs with companies that had newly entered the space over the last 12 to 18 months are now completing the measurement of these programs and as we expected have learned that these solutions are not scalable and are beginning to drive bend back our way. Progress here is pacing ahead of what we anticipated, which is best evidenced by the strong GAAP or RWE momentum we've seen during the second half of 2023. These deals by their nature are larger, stickier and more strategically targeted, making us a more relevant partner with our client base. In September, we unveiled a significant enhancement to our omnichannel healthcare engagement platform. This new AI directed capability unites point-of-care and traditional digital media to provide a comprehensive solution for pharmaceutical marketing. This announcement was the culmination of years of learning how to integrate AI into OptimizeRx's customer use cases, subsequently transforming our HCP engagement platform along the way. The new AI driven platform expands on our patent pending HCP engagement technology to now include social, web display channel and CRM alerts which create more efficiencies directly with sales forces. With this development, OptimizeRx has renamed the HCP Engagement Platform, the Dynamic Audience Activation Platform or DAAP for short to mark the merger of our former RWE AI capability with our full omnichannel network and new proprietary position engagement data set. The new DAAP solution advances our land-and-expand strategy enabling clients to gain maximum market penetration through scaling of outreach in real time across the company's network of over 2 million HCPs across multiple major digital media channels and a point-of-care via electric health records, EHRs e-Prescribing and the telehealth platforms. DAAP helps our clients find patients best suited for their medications. As noted in multiple independent studies, this is one of the top challenges in today's specialty medication driven market. In a recent engagement, the company reported a 19% script lift among AI identified HCPs seeing relevant patients including their early impact physicians who had historically high script writing behaviors. In other words, we helped our clients grow their business by enabling alignment of HCP and patient awareness when clinical decisions are being made. Customers who have been exposed to DAAP quickly become our strongest advocates and this success is quickly moving us up the decision maker hierarchy with our larger customers. This is increasing our visibility cross functionally and across brands and we currently have 100% renewal rate. Given the improving macro environment and the recent customer traction we're seeing with the DAAP enhancement, we believe last month's acquisition of Medicx was perfect timing. Both business lines are showing growth, are seeing significant client engagement and we are moving forward as planned on executing against the numerous technological and operational synergies we mapped out during the due diligence period. The transaction further expands our omnichannel reach beyond HCPs to patients while adding multiple channels we haven't accessed previously, which includes streaming and connected TV as well as various digital channels such as play, audio, online video and mobile among others. Medicx technology is not only proven but profitable and we are transforming our organization into the most comprehensive healthcare marketing platform in the nation. As we highlighted last month, the majority of Medicx revenue is similar to that of OPRX, is generated through the world's largest pharmaceutical manufacturer, but focused on patient marketing, where OptimizeRx has historically focused on HCPs. The combination provides a significant unlock for brands within this pharma customer base by seamlessly connecting the brand's patient and HCP marketing team. I believe this aligns strongly with our land-and-expand strategy and enables significant upselling and cross selling opportunities, particular when you couple this fact that over 80% of the brands our respective companies support do not overlap. We've already seen success with the combined team and secured our first cross sell deal with the top five pharma manufacturers and have numerous other deals in sight. With the closing of the Medicx acquisition, we have expanded our executive team with the addition of Medicx President, Theresa Greco, who is now our new Chief Commercial Officer. She will lead the commercial strategy and execution for the company and report directly to Steve Silvestro. As a result, Steve has been promoted to President and will lead all aspects of corporate strategy and daily business management. This will be a very natural transition for both Steve and the company. Steve's leadership style has always extended organizationally and in my eyes, this is a testament to his commitment strategically positioning us with our customers and partners, which has been transformative to our go-to-market over the last four years. Finally, I'd like to give an update on our cost cutting measures. I'm happy to report we're ahead of schedule and we have already completed over half our planned cost reductions and have identified the remaining cuts and are in the final stages of executing against our objective. While some of this benefit will be seen in 2023, the full benefits of these cost cuts will be seen in our P&L in 2024. We believe we turned a significant corner since the start of the second half of the year and have incredible momentum going into 2024. And with that, I'd like to turn the call over to our CFO, Ed Stelmakh, who will walk us through the financial details for Q3 as well as the Medicx transaction. Ed?

Thanks Will. And recall, the press release was issued with results of our third quarter ended September 30, 2023. 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 $16.3 million, an increase of 8% from the $15.1 million we generated in the same period in 2022. Meanwhile, our gross margin decreased slightly from 62.4% in the quarter ended September 30, 2022 to 60% in quarter ended September 30, 2023 with the difference being largely tied to solution and channel partner mix. We're encouraged by the quarter-over-quarter improvement on gross margins and it reflects the increase in the business associated with DAAP. Our operating expenses remained relatively consistent year-over-year and came in at $13.4 million for the three months ended September 30, 2023. We had a net loss of $2.9 million or $0.17 per basic and fully diluted share for the three months ended September 30, 2023 as compared to a net loss of $3.5 million during the same period in 2022. On a non-GAAP basis, net income for the third quarter of 2023 was $1.6 million or $0.09 for full diluted share outstanding as compared to non-GAAP net income of $1.3 million or $0.07 per fully diluted share in the same year ago period. Meanwhile, our adjusted EBITDA came in at $9.9 million for the quarter and was effectively flat year-over-year. Operating cash flow came in at positive $1.5 million for the quarter. We ended the quarter with a strong balance sheet and cash in short-term investments turning $63.5 million on September 30, 2023 compared to $74.1 million on December 31, 2022. The majority of the decline was due to our share repurchase program through which we bought back 526,999 shares of common stock for $7.5 million. Subsequent to the quarter's end, we acquired Medicx for $95 million. The cash portion of the transaction was approximately $84.5 million and was funded through cash on our balance sheet as well as $40 million in debt financing. We currently have over $30 million in the bank. We are well funded to execute against our operational goals. We remain confident in our long-term growth outlook and are happy to say we're increasing our guidance for 2023 and are now expecting revenue to come in between $68 million and $70 million with an adjusted EBITDA between $3 million and $4 million. In addition, our preliminary 2024 guidance for revenue is expected to be at least $110 million with an adjusted EBITDA margin of at least 10%. We will have more details to share once we get through the RFP season, but early indicators are very encouraging as we bring our combined value prop to the market. Now let's turn to the KPIs for the third quarter of 2023, which has largely stabilized and have started to show improvements when compared to the prior quarter. Average revenue for top 20 pharmaceutical manufacturers now stands at $2.1 million as we continue to work with 18 of the top 20 largest pharma companies in the world and 100% of the top 20 that don't have the majority of their sales tied to COVID-19 vaccines. Net revenue retention rate is showing improvement at 93%, up from 89% in Q2 2023. Meanwhile, revenue per FTE came in at $571,000 topping the $560,000 posted in Q2 2023. It's also worth mentioning that Medicx has a net revenue retention rate of 130% and an average revenue per FTE of $851,000. We're encouraged by the continued improvement in our KPIs as we move past the external market challenges and return to growth and profitability as a leader in our space. Now with that, I'd like to turn the call back over to Will. Will?

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

Thank you. [Operator Instructions] Our first question is from Sean Dodge with RBC Capital Markets. Please go ahead.

Hey, good morning. This is Thomas Schuyler on for Sean. Thanks for taking the questions and congrats on the strong results. So on the preliminary 2024 outlook, looking for somewhat of a bridge from 2023, are you at all able to share kind of any of the expected revenue contribution from Medicx or any sort of general growth rate assumptions that are kind of embedded within that? And then maybe just generally anything you can share around the visibility on the low end of that range? Thanks.

You're talking about 2024, Tom that's your question, not 2023?

Yes, yep, preliminary2024…

Yes, it's a little early. That's why we said up to 110 and up to EBITDA of 10%. We just did the full integration all of a few weeks ago. So we want to get our hands around that more, get a sense of RFPs and in full swing and also how the year is going to end with open contracts into the next year. But feel fairly encouraged, feel like we'll be able to do that early in the year, next year. Ed do you want to add anything to that?

No, I think you got it. Yeah. I mean, once we get through our peak season at the close of the year, we'll get you a lot more details around the visibility.

All right, understood. Thank you. And then then did you all, have obviously announced quite a few new deals recently. How should we think about the average size of those? Are they still sort of hovering in that $1 million to $2 million I think on an annualized basis and then I guess how might that average sort of change if we think about a combined offering with Medicx kind of in the future? Thank you.

Tom, hey, this is Steve. Yes, the deals are still in the same range that $1 million to 2 million range. Although what we're seeing is on the deals that are renewing that have been in place, the scale is larger simply because they're finding more patients. So it's tied to the Dynamic Audience finding more patients over time. So that build happens, which means every time we renew the deal, it's not starting from zero, it's starting from an existing patient base. So as we March on into 2024, you'll see that deal size trickle up northward. And then with the addition of Medicx, what that does is enables direct-to-patient communication in addition to direct-to-HCP communication. So it's the other side of that transaction between the HCP and the patient. So you could think of it as almost a near double over time as we start the communication to -- between both sides.

All right, great. I appreciate the color. Congrats again.

You got it. Thanks Tom, say hi to Sean.

Thank you. Our next question is from Jared Hassey [ph] with William Blair. Please go ahead.

Yes. Good morning guys. This is Jared on for Ryan Daniels. Thank you for taking our questions. Yes Will, maybe for you, nice to see the rebound in the performance after last quarter. So maybe a two-part question on some of the recent trends. I guess #1 curious if you could speak to the differences just in how the quarter ended up versus the preliminary release that you gave in mid-October. I think you came in about $1 million ahead of that original preliminary outlook. So we'd love to hear any specifics around that? And then second part here, it's nice to hear the macro headwinds are alleviating for you guys. We would be curious to hear a bit more of what you're seeing with the client base, maybe what's driving that underlying improvement because it seems like others in this space are certainly still calling out some of those headwinds with farmers that have been in place last year four quarters. So we'd love to just get any more kind of specific details as to what you're seeing on that side of things. Thanks.

Yes, Jared, no problem. So on the on the first question around coming in beyond the prerelease all attributed to DAAP and successfully pulling through many more deals than anticipated towards the end of the quarter and getting that that work done inside of the quarter. We got more work done than we thought we would which is good, it shows, starting to show scale there, really thrilled on the client reaction. I think we're finally hitting that tipping point where clients understand the value. Enough of them have tried it. We have 100% renewal rate on it. We've done a spectacular job marketing it, a real thought leadership. We had people on the team up on stages talking about real world examples of why this is a powerful tool and it was presented in a way I have to call out the marketing team just spectacular presentation of information that was digested, understood and people acted on. I also will say that we internal to one of our clients which we can't disclose, we were able to win an award some recognition around an innovative solution which is DAAP basically and that got us in year dollars. That was not anticipated. And so again, hats off to the team and the gang. And Steve, anything to add on that from a client perspective?

No, I think you covered it. I mean the only thing that I would say in terms of headwinds, which was the second part of your question was the market headwinds are still there in terms of prevailing issues in the industry, although we've highlighted some of the stuff that we've seen subside. I think the more important thing to probably note here is to put punctuation around the fact that our return on investment measurements have happened and so we've been clear about we would start to see those that were over promising, under delivering in the competitive landscape just start to get sifted out of the market, that definitely happened in the first half of this year. And so now in Q3 we're starting to see investment come back based on the fact that we have delivered an honest ROI and are a proven partner. And I think that's a real key indication for scale going into the second half of the year and into 2024.

Yes, I'd say, I'd just add to the headwinds, we have seen normalization on the FDA approval rate to back to 2021. I think given the economy, the turnover rate in general, if you track LinkedIn you can see people are jumping around a lot less and all those things were headwinds. And there, as Steve said, there are still headwinds for a lot of firms and if you're a boater it all depends where your boat is when you have the headwinds. So I think we're in a good place. We're in that in that harbor where we have something that's needed, it works and we're starting to see that come back really happy to see it.

Okay, great. I think that all makes sense and nice to hear the good execution on the marketing side of things as well. One quick followup and this is sort of a related question to the first one just around 2024 visibility. Given some of the moving parts here with the acquisition and some of the changes that you've made on the product side, can you just level set with us as we think about the pro forma business in 2024 that $110 million or so target, how much of that is sort of a pure transaction or value based revenue stream and how much of it is more of a subscription revenue recognized overtime where you'd have kind of a backlog of visibility going into next year?

Well, we're not changing our business. There will still be the architectural fees and then transaction fees related to DAAP programs or tactical programs that we are -- we're not a SaaS business, right. But what we are is a highly recurring revenue rate because what we do works and it's been tried and true and it has scale. And I think ultimately that's what's going to make the difference here. And you've seen it in other companies out there that are three or four years ahead of us. Once you can prove that be reliable, get the data back to the client, have the measurement in place and the compliance in place and basically do what you say, say what you do constantly, that farmer really starts to invest in you and we feel like we're at that place. So we don't foresee a substantial shift in the P&L model. And but we do expect to have a better visibility, one of the things we liked about Medicx when they go into the year. Again, not going to comment on it now, but as we get into Q1, we will, they just had more visibility on their year. Given the increase in DAAP and some of these wins that we're seeing from Q3 and Q4 we'll have better visibility as well, so the two will come together nicely. And ultimately if you think of that size business, now we've got lots of seats at the table and as we've mentioned, there's fairly limited overlap and that just gives us a lot of opportunity to go in land and expand and the team is pretty fired up about that.

Okay, perfect. And Congrats again on the momentum and I'll go ahead and hop back in the queue.

Thanks.

Thank you. Our next question is from David Grossman with Stifel. Please go ahead.

Good morning. Thank you. I want to go back to the comments that were made about clients coming back after kind of experimenting with some other vendors in the marketplace. Can you perhaps just drill down a little bit into that, maybe give us some data points that would help us better understand that dynamic and when they do come back, what's the cadence of spending when they come back?

David, hey, good to hear your voice. This is Steve. I mean just analogously speaking or just give you some key data points as you said, I mean they're, the experimentation was around return on investment. And so it takes a couple of quarters for you know clients to be able to run programs, measure them, see how effective they were, what the impact was and then make a subsequent decision. I think in most cases those decisions are being made on a couple of things, one is the reach and the execution, the other is the ability to report back on what actually happened. We call that in the industry within level data for the HCP side. There are other DTC components for measurement. Universally, what we're hearing is that other competitors ability to measure effectively, accurately, and timely is really lacking. And so for brands, that's problematic because the measurement of the first half determines and dictates the amount of spend they have for the second half. And so when a competitor didn't deliver on what they articulated they would in the first half, it actually caused the brand to lose funds for marketing in the second half of the year, which is a big problem. And so that's the pivot back, and that's what you're seeing. They know that our solution is really tried and true. They know that we've delivered a consistent return on investment. Actually, the return on investments have improved with the addition of DAAP because the audiences are dynamic, so real time. And they've seen that. And that's really what has contributed to that. Scale from two deals to 16 very rapidly, and all of the 100% renewals that you heard will state earlier.

So, Steve, then the funding can be shifted to you that quickly. In the sense that they're not satisfied with the results, they can shift that funding immediately to you to spend in the back half of the year. Is that pretty much how the Dynamic works?

Yes, it is how the Dynamic works. I wouldn’t say, I would caution you to say they can shift it immediately like a buy up. It's not a buy up scenario, okay? What it is a strategic decision to pivot away from someone who can't deliver on the reporting, meaning they can't measure the programs. They have no ability to tell whether or not their spend was effective, over to a solution where they know they're going to have a solid reporting capability by the end of the year and be able to deliver back up to their senior management. Here's what we spent, here's what our return on investment was, and here's what we're plugging in for 2024. And right now, as you know, David, everybody's in the middle of brand planning season, so it couldn't be more critical to have accurate reports that project 2024 and the potential for them to have success as they're building their budgets. So those migrations are happening.

Got it. Great. Thanks for that, Steve. That's actually really helpful. Thank you for -- and then the second question is back to the Medicx acquisition. And it sounds like there's some pretty exciting opportunities now that you're operating as a combined company. And maybe if you could explain a little more detail just how the decision making works in their model versus you and when I mean decision making, I mean at the brand. So, for example, are we leveraging the same types of contacts? Are they different? And also maybe explain a little bit about their channels versus your channels and how they compare and contrast and how that impacts the growth of the business going forward.

Okay, this is Will. I'll start on the channels and I'll hand it over to Steve on the first part of the question. Yes. So because they're focused exclusively on the consumer or the patient and where they come across content digitally, right? So think digital TV, think social, think screens in pharmacies, screens in waiting rooms, wherever they will be. We know we basically can target content. The content is like us. It's generated by agencies for pharma, goes through the same approval process. It's more consumer oriented, and they've done a spectacular job similar to our model. They have a cost on their P&L to the partnerships, and then they have a team that measures that effectiveness and manages it. Again, like us, they do not generate any content. So, again, a true tech play, tech enablement of helping pharma connect directly to consumers. And what we love about this is, as you know, David, we've been working on the consumer patient side for a while. We hadn't figured it out right. We met this company and saw how well they did and thought, okay, channel partnership enabled. We know that kind of business. We really like that kind of business. They can measure it true connectivity. We know that's a key variable. They also have a patent on the process which as we'll get into in subsequent quarters will be very relevant relative to the reliance on the cookie going down or away into next year in 2025. So we think we're going to have a competitive advantage there. So think about what pharma is dealing with. It's very hard to get to the consumer. It always has been a challenge. Adherence is one of the largest challenges they have. But our hope is we will be messaging to the doctors, we will be messing to the patients. And when the two come together, you get a higher outcome, you get a good communication path between the two, which just means the patient's more likely to start and stay on therapy. Let me hand it over to Steve. Relative to the first part.

Yes. I mean some of the synergy that we saw immediately in terms of revenue potential was Medicx. Sort of a jewel in the crown of the Medicx business is the audience creation component. So they're using a methodology very similar to ours that's tech enabled to create the audiences of patients that they want to subsequently target and message. What we've done on our side, David, as you know with DAAP, is we've done that same creation of audiences, but it's dynamic, meaning it's real time, it's refreshing on a real time basis. So bringing those two methodologies of audience creation together with disparate execution capabilities is really the unlock in the business. So I think that's where we see it. On the pharma side, the DTC spend so the patient marketing dollars generally are four to five times that of HCP. And so we see know we're getting that growth back. Now on the HCP front, we're encouraged by the capability and the opportunity we see on the DTC front. And as you heard Will say really now we're communicating in a closed loop fashion. Meaning we're communicating from the same audience structure or technology to the HCP to the patient and then measuring the transaction between those individuals in a feedback loop that enables us to optimize the communication going forward and again in real time. So I think it's really an exciting time for the business on the product front, the marketing front and the revenue potential growth is really exciting.

And just to be clear, Steve, so are the decision makers on the DTC versus the ATP side within the brand? Are they different infrastructure, same organization or different?

It’s so within a brand you've got an HCP marketing lead and you've got a patient marketing lead. Both report generally to the P&L owner of the brand and so at a high level. As you know, we've been dealing mostly with brand managers, not HCP marketers. That's been a deliberate choice on the OptimizeRx front. We've seen, obviously, the growth now from that. The good news is that's the same decision maker that would make the decision on the patient front, albeit they've got a delegate in the patient marketing spot, but it's those three folks that you want to engage in the conversation.

Got it. And just one, sorry to ask one more question here, but just for Ed, just on the cost side, I think maybe Will, you had said that you were halfway through the cuts. Need to mention at all what kind of cost tailwind we have in 2024 versus 2023.

Yes. So as Will said, we're more than halfway done with the cost cutting initiatives. We've got the rest of it figured out and well on its way to be pulled through this year. It's all baked into our current projections for next year. So the guidance of being 10% or better adjusted EBITDA has that baked in.

Got it. Okay, guys, thanks again.

Thanks, David.

Thanks, David.

Thank you. Our next question is from the line of Neil Chatterji with B. Riley. Please go ahead.

Good morning, guys. Thanks for taking the questions. A lot of mine were already asked, but just in terms of gross margins, we saw some improvement there in the quarter. Maybe just how should we think about gross margins kind of closing out the year and into 2024 post the acquisition?

Yes. Hey, Neil, good to hear your voice. Because of the pick up on the DAAP, which has some architectural work up front, we had a nice positive impact on gross margin. We should see that through the end of the year. And I would say we will stay within our current ranges on gross margin just because at this stage when we're starting to see growth come back, it's going to be important to do what the clients need. But if we look at the seasonality, I think you're going to see a very similar trend. We'll have a lot started going into Q1, which is great, and then we'll probably start more in Q2 on new clients that come out of the RFP season but really happy with the improvement to the range we're in with gross margin and obviously see it drops right down. We also think and Medicx should have a positive impact as well, but it's still early on that one.

Got it. And you might have answered my follow up, but just in terms of the seasonality for the business, I mean, just given the growing DAAP pipeline and the Medicx acquisition, how should we think about that in terms of is that in line with the historic seasonality or would that perhaps change a little bit next year?

Great. That's it from me.

Thanks, Neil.

Thank you. Our next question is from the line of Eric Martinuzzi with Lake Street. Please go ahead.

Yes, I wanted to tease out the Medicx revenue for 2023 here. I think when you talked about it on the acquisition, that it was about a $37 million business growing better than 20%. What is implied in 2023 for revenue from Medicx on a full year basis?

Right. I was asking what was standalone Medicx for the twelve months 2023.

Okay. And then regarding the competitors, sort of – are they being turned off completely? Is there a scale back that's happening? And then secondarily, why are they is it a situation where they're immeasurable ROI or is it just not scalable enough to meet the demands of the brands?

I'll take that one. Yes, it's a little bit of both, Eric. I mean outside of us and connective. As you know, there's not really a meaningful marketing network out there right now, so it's really just 1Gs, 2Gs [ph]. So the scale is an issue. Scale meaning reach of physicians. Marketers are deciding to go with people that have got a proper network because they get a much broader reach. So every time they deploy a program, it just simplifies things for them. And then in terms of measurement, if they don't have the ability to actually deliver that physician level data, which is the ultimate success metric of the campaigns that they're running, they don't have an ability to justify the investment going forward. They found that to be a huge problem. But we invested. Luckily, we had the foresight at the beginning of really the end, middle of end – last year to invest and double down on the physician level data exercise. And that's enabled us to be able to report back to these brands in an accurate, timely way on how the programs are going. And also to partner with other companies that do measurement, that are third party independent providers to validate the findings that we're providing.

Got it. And then, and one last one for you a housekeeping item here. Post the close of Medicx, what was kind of the post-closing? Cash balance and then what? Share count post closed?

$18 million. Okay.

Got it.

Thanks, Eric.

Thank you. Our next question is from the line of Richard Baldry with ROTH Capital Partners. Please go ahead.

Thanks. Sort of curious, your early initial takeaways. It's probably been pretty brief about how it's affecting the acquisitions, affecting your RFP season. There's two schools of thought, right? You want less noise to just have things run smooth. The other would be looks like you'd be a bigger, more important combined entity. So how quick can Farmer react to the fact that you are now a unified company? I think have you seen any, even anecdotal evidence that that's been helpful? Or do you think the real benefit will probably come next year when they've had a year of seeing these sort of side by side integrated and your win rates change ASPs are – step up. Thanks.

Rich. Hey, it's Steve. Great to hear your voice. Glad you're on. It's interesting, the minute the announcement came out, we got sort of an immediate response of, hey, this is great, guys. What does it mean? And so there's already a pretty good groundswell of interest coming in during the RFP season to connect these two solutions and to deploy them together in the marketplace. I think the market sees the synergy that we see and why we executed the acquisition. We'll take a little bit of time, I think, to scale it going into 2024. But having said that, Will mentioned earlier a couple of the wins that we've had. Both of those wins included both the HCP side and the patient side, meaning the Medicx side being connected and using the DAAP model to drive the messaging across the ecosystem for these programs. So some early wins that are meaningful and sizable and really exciting and I think a good telltale to what 2024 will look like.

Great. Thanks, Andy. Better.

And Just, when I think about the metrics you kind of call out and focus on you talk a lot about top 20 pharma, somewhere close to 60% of revenues. When you put the two companies together, let's say one plus one equals two. On a revenue side, does it become far more cost effective to really go after that next group in the top 100 because you can drive a better ARPU out of it to become more sales efficient, to kind of dig into that middle market, more attractive, however you want to think about it. Thanks.

Thanks, Rich. I'll start and Steve can add. I think still most of the money is in the top 20, right? And the top 20 partners with a lot of the others to supply the commercial and marketing strength. But because of DAAP and because of the way it's designed, there will be a day when we have turnkey solutions for one product companies, because they're not going to be able to afford the traditional models, they're not even as effective. And so I would say in the short term our focus is absolutely the top 20, top 30 manufacturers, top 200 brands, especially focused in specialty medications. But there is a day where we'll be able to have a model for companies that can't afford what the top 20 can afford. But they need it. And we have some of those clients today that actually use our solution to drive their business and they only work with us. I can't use names, but it's been highly effective. But yes, now that we'll have more scale, Steve and his team can put that together.

Yes. I think you covered it. I mean two of those DAAP deals are outside of the top 20. Rich, just to give you an idea and actually what they decided to do was replace their sales force to a large degree with the execution and the deployment of the DAAP model. It's just way more efficient from a cost perspective.

Great, thanks.

Yes. Thanks Rich.

Thank you. As there are no further questions, I would now hand the conference over to William J. Febbo, CEO for closing comments.

Thank you, Operator. And thank you everyone for joining us this morning. I'm sure you could sense our excitement and see our positive momentum from the second half of 2023 and into 2024. As I say, internally we are back. As we move forward in our financial and operational planning for 2024, we are transitioning into a new year on firm ground. Having significantly enhanced our reach with HCPs and patients enabled by proprietary AI models, the headwinds have largely subsided and we now offer a very focused and holistic solution that pulls everything together into powerful, agile solutions that solve pressing everyday challenges such as brand awareness, adherence, access, affordability and onboarding hard to find patients for HCPs. These are the challenges our clients, doctors and patients face in today's healthcare system and we are thrilled to play our part. The Medicx transaction not only positions OptimizeRx to profitably expand our market opportunity, we are also further enhancing our position as a leading player in the digital pharma marketing landscape by meaningfully expanding our channels and reach to unlock value for our customers. Moreover, the transaction is accretive to earnings as Medicx is highly profitable company and is expected to contribute meaningful to revenue, revenue growth, EBITDA and earnings per share. On a combined basis, revenues are expected to quickly surpass $100 million while generating significant profitability and cash flow. We will be working hard to finish the year strong, conduct multiple non-deal roadshows and continue to fine tune our focus to maximize impact. Five years ago this month we rang the NASDAQ bell as part of our uplift from the OTC and today we will do so again at the close of the markets. It has been an exciting journey up to this point, but we are just getting started as it relates to scale with our clients. That combined with actually helping doctors and patients align on care is what motivates us as a team. And with that, thank you for your time and I look forward to discussing the full year in our Q4 earnings call. Have a great rest of your day everyone. Thank you, Operator.