OptimizeRx Q3 2026 Earnings Call Transcript

OptimizeRx (NASDAQ:OPRX) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

OptimizeRx reported third-quarter 2026 revenue of $21.6 million and adjusted EBITDA of $6.3 million, both exceeding consensus expectations despite a 17% year-over-year revenue decline.

Full-year 2026 revenue guidance was adjusted to $87 million to $93 million from previous expectations due to delayed customer spending, though adjusted EBITDA guidance remains unchanged.

Key strategic initiatives include strengthening programmatic partnerships with major DSPs, expanding AI-enabled product portfolio, and enhancing commercial operations with new leadership appointments.

Renewed spending from a previously significant client and encouraging signs of pent-up demand for 2027 RFP season point to potential future growth.

Net revenue retention dipped to 83% due to spending optimization by a few large clients, but management remains optimistic about 2027 prospects, with early indications showing a 20% increase in contracted revenue.

Full Transcript

OPERATOR

Good afternoon everyone and thank you for joining OptimizeRx third quarter fiscal 2026 earnings conference call. With us today is Chief Executive Officer Stephen Silvestro. He is joined by Chief Financial Institutions Strategy Officer Edward Stelmakh, Chief Legal and Administrative Officer Marion Odence-Ford, Chief Business Officer Andrew DSilva, and Corporate Controller Heather Fivazza. 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 discuss certain non-GAAP financial measures that it believes are useful in evaluating operating performance. A reconciliation of these non-GAAP measures can be found in today’s earnings release as well as in the Investor Relations section of the company’s website. I would also like to remind everybody that today’s call is being recorded and will be available for replay on the Investor Relations section of the company’s website.

With that, I would like to turn the call over to OptimizeRx Chief Executive Officer Stephen Silvestro. Mr. Silvestro,

Stephen Silvestro (Chief Executive Officer)

Thank you, Operator, and good afternoon, everyone. Thank you for joining our third quarter 2026 earnings call. We’re pleased to report third quarter revenue of 21.6 million and adjusted EBITDA of 6.3 million, both of which exceeded consensus expectations. While revenue came in modestly ahead of expectations, our adjusted EBITDA performance was again particularly strong, reflecting our continued gross margin strength and the benefits of our disciplined approach to cost management.

Importantly, our bottom-line performance reflects the structural improvements we have made to our operating model, including the cost reduction initiative completed during the first half of the year. These actions have allowed us to operate more efficiently while continuing to invest in the technologies, products, and commercial capabilities we believe will drive long-term growth. Although the broader pharmaceutical marketing environment remains dynamic, we believe our third quarter performance demonstrates the underlying profitability and operating leverage of our business.

At the same time, we recognize that our top-line performance has not yet reflected the full potential of investments we’ve made in our platform. Contracted revenue for 2026 continues to track approximately 20% below the comparable prior year. As a result, we have a larger amount of revenue to secure and recognize during the fourth quarter to achieve our previously issued guidance. Given this backdrop, we are updating the full year 2026 revenue guidance to a range of 87 million to 93 million, while maintaining our adjusted EBITDA guidance of 21 to 25 million.

This revision reflects expected timing of our customer spending decisions and the increased amount of business that would need to convert and be recognized before year-end to achieve our previous revenue expectations. We remain encouraged by the sustainable progress we’re making across our business, including a very encouraging start to 2027. We are seeing expanded opportunities within key accounts, indications of pent-up demand as customers ramp up the 2027 RFP season, and growing commercial opportunities associated with our programmatic distribution capabilities.

We are also pleased to report that one of our previously displaced top five clients has returned and begun to reinvest in new solutions with OptimizeRx. As you may recall, this customer represented a meaningful portion of our revenue in 2025, but had not generated revenue during the first three quarters of 2026. We are now pleased to report that we have begun generating revenue from this customer during the fourth quarter. While spending has not yet returned to historical levels, we view this as a positive development and an encouraging indication of renewed customer engagement and interest and contribution to growth next year in 2027.

In addition, we’re encouraged by the progress we’ve made by strengthening our commercial organization during the third quarter. Sarah Bass joined OptimizeRx as Chief Marketing Officer, bringing more than two decades of pharmaceutical marketing experience, including significant leadership roles in point-of-care, media, and agency partnerships. Her appointment represents an important investment in executing our go-to-market strategy as we seek to deepen relationships with pharmaceutical manufacturers, strengthen our position with leading healthcare marketing agencies, and accelerate adoption of our expanding product portfolio.

Importantly, we believe our revised outlook reflects the near-term timing and conversion of customer spending rather than a change in our long-term market opportunity. Our focus remains on converting these opportunities into revenue while maintaining the financial discipline and operational efficiency that have driven our strong profitability and performance. Ed will provide additional details on our financial performance and outlook shortly. Turning to the broader market, pharmaceutical manufacturers continue navigating an environment characterized by evolving spending priorities, budget scrutiny, and a heightened focus on measurable returns on marketing investment. While these dynamics have contributed to delays in certain customer decisions and the timing of campaign execution, we continue to hear encouraging feedback regarding the underlying demand for our solutions.

It’s important to state here that OptimizeRx is uniquely positioned as the only tech company in the space with a proven AI-enabled operating system that is rapidly scaling information across a proprietary network of EHR systems. Those interactions are underpinned by OptimizeRx’s growing proprietary data, which enables our technology to find patients in need of therapy and the doctors who treat them. In our conversations with our pharma and agency customers, we’re seeing continued interest in solutions that improve targeting precision, deliver measurable outcomes, and reach healthcare providers and patients at the moments when engagement is most relevant. Our focus remains on translating that interest into signed agreements, active campaigns, and recognized revenue. We believe there’s pent-up demand within our customer base as pharmaceutical manufacturers evaluate how and when to deploy their remaining marketing budgets.

Although the timing of that spending remains difficult to predict, the underlying customer needs align closely with the capabilities we’ve been building across our platform. We believe the combination of stronger commercial leadership and broader distribution capabilities through our programmatic initiatives will improve our ability to capture demand as we look for customer spending to normalize in 2027. Rather than relying solely on historical patient characteristics or static audience definitions, our technology is designed to anticipate future treatment eligibility and help pharmaceutical manufacturers engage the appropriate audiences during critical windows in the patient journey. We believe this approach represents an important advancement in how life science organizations identify and engage potential treatment candidates. We believe these proprietary and patented capabilities will become increasingly valuable as pharmaceutical manufacturers seek more sophisticated, measurable, and AI-enabled approaches to commercial engagement.

We continue to make meaningful progress advancing our programmatic strategy with what we believe represents one of the most significant long-term growth opportunities for OptimizeRx. Since opening our proprietary EHR network to programmatic buying earlier this year, we’ve established relationships with three leading demand-side platforms: DeepIntent, The Trade Desk, and, most recently, PulsePoint. Together, these integrations are expanding access to our authenticated point-of-care inventory through the platforms pharmaceutical manufacturers and agencies already use to plan and execute their campaigns.

In September, we announced an integration with The Trade Desk through its OpenPath solution, providing advertisers with access to over 800,000 verified healthcare professionals across more than 400 EHR and e-prescribing systems through OptimizeRx’s point-of-care network. More recently, we announced a partnership with PulsePoint, further expanding our programmatic distribution footprint. Through this integration, OptimizeRx will contribute approximately 250,000 incremental NPIs to PulsePoint’s network.

We expect our inventory to become available to PulsePoint advertisers throughout November. Importantly, these partnerships represent more than just additional distribution channels. They are an important step toward integrating point-of-care advertising into the broader omnichannel strategies of pharmaceutical marketers. Historically, EHR advertising has largely been purchased through direct relationships or specialized channels, often separately from the other digital investments. Our programmatic strategy is designed to eliminate those barriers, making it easier for customers to incorporate authenticated clinical inventory into their existing media plans.

By expanding access through multiple leading DSPs, we are creating new opportunities to reach advertisers, increase utilization of our proprietary network, and capture a greater share of pharmaceutical marketing budgets. While these initiatives remain in the early stages of commercialization, we believe they represent an important evolution in our business model. Rather than relying exclusively on traditional direct sales, we’re building a more scalable distribution infrastructure that allows demand to flow into our network through multiple channels.

We believe this strategy, combined with our differentiated AI-enabled audience intelligence and authenticated clinical inventory, positions OptimizeRx to benefit from the continued shift toward programmatic healthcare advertising and creates additional opportunities for sustainable long-term revenue growth. We also continued expanding our AI-enabled product portfolio. In September, we announced an enhancement to our Natural Language Audience Builder, or NLAB, extending its capabilities beyond healthcare provider audiences to include privacy-safe direct-to-consumer audiences. By incorporating our micro-neighborhood targeting capabilities, NLAB now allows pharmaceutical marketers and agencies to develop coordinated HCP and consumer audiences through a unified natural language workflow.

This represents an important advancement in our strategy to simplify omnichannel healthcare marketing. Rather than developing HCP and DTC campaigns through disconnected planning processes, marketers can use a common approach to identify and activate relevant audiences across both channels. We believe this improves planning efficiency, strengthens audience coordination, and creates opportunities for more effective and efficient engagement through the patient treatment journey.

Together with DAP, our programmatic integrations, and our recently introduced CoPayQ solution, these capabilities are expanding the ways pharmaceutical manufacturers can engage healthcare professionals and patients through our platform. Collectively, these initiatives reflect our evolution from a traditional point-of-care marketing business toward a broader technology-enabled platform supporting audience intelligence, media planning, programmatic activation, and clinical workflow engagement.

Over time, we believe this evolution can create additional recurring revenue opportunities, improve customer retention, and strengthen the scalability of our financial model. As we look ahead, I believe OptimizeRx is differentiated by three fundamental competitive advantages. First, we’ve built a proven and increasingly scalable AI-enabled platform. AI has been foundational to our technology strategy for years, and solutions such as DAP and NLAB demonstrate our ability to translate that investment into differentiated commercial capabilities. Importantly, we believe our platform can support additional customers and use cases without a proportional increase in our cost structure.

Second, our proprietary data and solutions provide meaningful differentiation in an increasingly AI-driven world. While general-purpose AI can automate many marketing functions, we believe our combination of proprietary healthcare data, predictive intelligence, and authenticated clinical workflow access is difficult to replicate or disintermediate. Third, we’ve established a proprietary network with substantial reach and meaningful barriers to entry.

Our integrations across more than 450 EHR and e-prescribing systems provide access to over 1.1 million verified healthcare professionals. These relationships and technical integrations have taken years to develop and form a durable competitive advantage. Together, these fundamental competitive advantages position OptimizeRx to benefit from the continued evolution of healthcare marketing toward AI-enabled planning, programmatic activation, and measurable engagement.

As we move toward the end of 2026 and begin preparing for 2027, our priorities remain clear. First, we’re focused on improving top-line execution and converting the commercial opportunities currently within our pipeline. Second, we will continue expanding adoption of our AI-enabled, data-driven technologies, including DAP and NLAB, while building on our proprietary data asset and growing portfolio of intellectual property. Third, we will focus on increasing utilization of our proprietary network through programmatic distribution and additional strategic partnerships.

And finally, we remain committed to maintaining the financial discipline and operating efficiency that have supported our strong profitability performance. We believe the combination of these priorities positions OptimizeRx to emerge from the current period of spending uncertainty with a stronger operating model, broader technology capabilities, and additional avenues for sustainable growth. Before turning the call over to Ed, I’d also like to touch on our previously announced finance leadership transition. Today is Ed’s last earnings call with OptimizeRx, although he will continue serving as Chief Financial and Strategy Officer through the end of 2026. Effective January 1, 2027, Andy Da Silva will assume the role of Chief Financial Officer, and Heather Fivazza will become Chief Accounting Officer. This transition remains on track, and we appreciate Ed’s continued leadership and support as we prepare for the next chapter of the company’s growth.

I’d also like to personally thank Ed for his incredible leadership during his tenure here at OptimizeRx. With that, let’s turn the time over to Ed.

Edward Stelmakh (Chief Financial Officer)

Thanks, Steve, and good afternoon everyone. As always, we issued our earnings release this afternoon detailing our financial results for the third quarter ended September 30, 2026. A copy of the release is available in the Investor Relations section of our website and additional information will be included in our upcoming Form 10-Q. Third quarter revenue was 21.6 million, a decrease of 17% from the 26.1 million recognized during the same period in 2025.

The year-over-year decline was primarily attributable to reduced spending among a limited number of large customers, including customers that utilized our lower margin managed services offering in the prior period, as well as continued budget pressures and spending delays associated with broader market conditions such as MFN pricing uncertainty. Our expenses for the quarter ended September 30, 2026 decreased 5.1 million year over year to 18.9 million. This was driven by lower cost of revenue and compensation-related expenses. Despite being impacted by $0.7 million in severance costs associated with our previously announced reduction in force, the decrease in cost of revenue was largely attributable to a favorable products and channel mix, including a significant reduction in DTC managed service revenue this quarter.

Our ongoing margin optimization initiatives implemented over the last 18 months continue to yield meaningful benefits resulting in expected gross margin in the low 70% range for the full year 2026. Net income for the third quarter of 2026 was $1.2 million or $0.06 per basic and diluted share, compared to net income of $0.8 million or $0.04 per basic and diluted share in the third quarter of 2025. On a non-GAAP basis, our net income for the third quarter of 2026 was 3.8 million or $0.20 per diluted share as compared to 3.1 million or $0.16 per diluted share in the same year-ago period. Our adjusted EBITDA was 6.3 million for the third quarter of 2026 compared to 5.1 million during the third quarter of 2025.

Even though revenue declined 17% in the third quarter of 2026, our adjusted EBITDA margin was approximately 29% for the quarter, up from approximately 20% in the third quarter of 2025, an improvement of more than 900 basis points. We believe this demonstrates that our margin optimization and cost management initiatives are working and that our business model can generate higher profitability as revenue grows. Operating cash flow was 12.9 million for the first three quarters of 2026 and we ended the quarter with a $22.3 million cash balance as compared to 23.4 million on December 31, 2025. As we highlighted last quarter, our long-term loan with Blue Source Capital was refinanced with Fifth Third Bank through which we fully drew down the $25 million term loan and have access to a $10 million revolver. Our current interest rate on the term loan with Fifth Third Bank is SOFR plus 2.25%.

With that said, we paid $6.3 million in principal during the third quarter which was $6 million ahead of our payment schedule, leaving our outstanding debt at the end of September at 13.4 million. Furthermore, subsequent to the quarter end we paid off an additional $3 million in debt and now have a debt balance of $10.4 million. We intend to continue paying down our outstanding loan principal ahead of schedule in combination with executing on our share repurchase program.

Our bottom line performance continues to be strong and in line with our strategy of driving sustainable, profitable growth. Now let’s turn to our KPIs for the third quarter of 2026. Average revenue per top 20 pharmaceutical manufacturer now stands at 2.5 million. Net revenue retention rate dipped below prior period levels to 83%. The dip was driven primarily by a small number of large accounts optimizing spend rather than broad-based churn. Additionally, revenue per FTE came in at $706,000. While our KPIs showed decline compared to previous quarters, we have made meaningful progress on margin expansion and operating expense management consistent with our strategy of driving profitable growth.

Based on our performance through the first nine months of 2026 and our current outlook for the remainder of the year, we’re updating our guidance for 2026 and are looking for revenue to come in between the range of 87 and $93 million and are maintaining our adjusted EBITDA of 21 to $25 million. As Steve mentioned, contracted revenue continues to track approximately 20% below the comparable prior year level, resulting in a larger amount of revenue remaining to secure and recognize during the fourth quarter than we had previously anticipated.

While this increases the execution risk associated with achieving our revenue outlook, we remain encouraged by several developments including renewed spending from a previously significant customer, expanding opportunities with key accounts, indications of pent-up demand, and the continued rollout of our new products and programmatic capabilities. We believe these factors, combined with the seasonal spending patterns historically associated with the fourth quarter, provide a path to achieving our full year objectives.

However, the timing and conversion of these opportunities will be particularly important as we close out the year. From a profitability perspective, our strong gross margins and the benefits of our cost reduction initiatives provide additional support for our adjusted EBITDA outlook. Before handing it over to Steve, I wanted to once again thank everyone for your support and trust over the last five years. As previously mentioned, I look forward to staying engaged with OptimizeRx leadership team in my role as a strategic advisor. And once again I want to congratulate both Andy and Heather on their well-deserved promotions. And with that I’ll turn the call back over to Steve.

Stephen Silvestro (Chief Executive Officer)

Thanks, Ed. Operator, now let’s move to Q&A.

OPERATOR

Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Ryan Daniels with William Blair. Please proceed.

Dustin (Analyst at William Blair)

Hey, everyone, this is Dustin on for Ryan. Thanks for taking our questions. Great to see the wins with the programmatic partnerships. So now that you have DeepIntent, The Trade Desk, and PulsePoint, I’m not sure if you’ve kind of sized up roughly what percentage of the programmatic space you’ve won with these three DSPs together, but maybe we can get some idea of how much runway there is left. I know it’s early innings, but just I imagine that there’s a lot of runway.

But, you know, what percent are these three together? Thank you.

Stephen Silvestro (Chief Executive Officer)

Hey, Dustin, thanks for the question. Good to hear your voice. And these three are really the three big ones in the space that we’ve gone after deliberately with some intentionality. We believe they represent probably 60, 70% of the volume in this space. And so we’re connected in the right spots in terms of generating revenue from the partners. Still, as you pointed out, right, still very, very early days. It’ll take a little while to build the swell on that.

But these integrations have already demonstrated some really, I think, encouraging results in these early days for us in terms of volume and bidding and acquisition. So we’re feeling very good going into the ’27 RFP season, as indicated in our sort of prepared remarks. And, you know, as is indicated in our contracted revenue, we’re running, you know, close to 20% ahead right now in RFP season. So looking strong on that. And a lot of that is due to some of the RFP stuff that’s going through those programmatic desks.

But we’ll be able to size it more as we get ramped up and running and start to see more flow. But these are the three big ones that we were targeting.

Dustin (Analyst at William Blair)

Gotcha. Good to hear on that. And then maybe you can talk about some of your shift toward mid and long-tail life science customers. Where are you with that and how is that progressing?

Stephen Silvestro (Chief Executive Officer)

Yeah, happy to address that. We are seeing exceptionally good play in the mid tier and in long tail. We’ve got some dedicated sales resources now focused on that. We had one of those mid-tier clients join our sort of top 10 client pool in the last two quarters, which is really encouraging to see. And we’ve had really significant play in the long tail as well, buying one and two solutions, kind of testing things out. But those early indications give us a lot of—I think they give us a lot of faith in what we’re going to see from them in 2027.

And I think we’ve articulated this before on the call, but part of the struggle that these mid-tier and long-tail clients have is they don’t have the massive budgets to come in and spend on Salesforce resources and all the Cadillac benefits that the top 10 or 15 pharmaceutical manufacturers and agencies do. And so what our solutions do is level the playing field for those mid-tier and long-tail clients. And that’s why we’re seeing sort of outsized investment starting to come in from those portions of our client pool.

Dustin (Analyst at William Blair)

Okay, thanks for that. And just last one for us. You know, NRR probably not where you want it right now, down to 83%. Just wondering, should we assume that this is kind of the trough quarter and we should be up from here, or how should we think about that going forward? Thanks.

Stephen Silvestro (Chief Executive Officer)

Yeah, I’ll give you a little bit of insight and then I’ll have Ed and Andy chime in as well. You know, I think that a lot of the NRR and just generally the KPIs are really focused on the disruption in that one client. Some of the pullback. I think when we normalize that for ’27, you’re going to see a big turn in what those KPIs look like. So part of the reason why we’re talking about what we’re seeing already in 2027 is just to help level set so that people don’t panic.

In terms of the revenue model, things are actually looking really, really good. But as we’ve committed as a leadership team previously, we’ve been very effective at our guide. We wanted to make sure that we were being transparent in our fourth quarter, and with the lack of visibility and buy-ups, we just didn’t think it’d be fair to everybody to just sort of roll the dice and try to hit it out of the park on buy-ups with the expectation that we may not get there just without the visibility in Q4.

So we’re just over-communicating and making sure that we’re being clear. But we feel really great about ’27, and that’s really where the game is. Ed, anything else you’d add to that? Andy?

Edward Stelmakh (Chief Financial Officer)

Yeah, I think, you know, for NRR, I think, you know, it probably is the trough. As you know, these are, you know, last-12-months-oriented figures, but they’re kind of doing the job they were designed to do, which is to give you a sense for where the business stands based on the trend currently established. Depending on where Q4 shakes out, I’m expecting that number to start to improve as we go into 2027.

Stephen Silvestro (Chief Executive Officer)

Thanks, Ed. All right.

Dustin (Analyst at William Blair)

That helped. Thank you very much.

Stephen Silvestro (Chief Executive Officer)

You good? You got it?

Dustin (Analyst at William Blair)

Yeah. Yes, all good. Thank you. Yep.

OPERATOR

Our next question is from Richard Baldry with Roth Capital Partners. Please proceed.

Richard Baldry (Analyst at Roth Capital Partners)

Thanks. Wondering if you’re willing to put sort of any floor into, you know, the ’27 growth now that you’re this far into RFP season. Like, do you think you can get, you know, cleanly back to double digit, low, mid double digit? Is there a way to think about, you know, what you’re seeing so far and, with that, your, you know, client coming back that had been a headwind for the year?

Stephen Silvestro (Chief Executive Officer)

Yeah. Hey, Rich, good to hear your voice. Looking forward to seeing you next week. We’re not ready to put a floor out there. We haven’t guided to 2027 yet, but we are right now, as I shared, we’re about 20% ahead on the contracted revenue coming in at 27. And that’s a really good indication of what we think 27 will look like. Again, it’s still early days, but the 27 projections are looking a little bit more like 25 than they are 26. And that’s what we anticipated.

You know, we knew when the client came back, given the size of that client, that we would start to see spend levels that were more aligned and appropriate with what we were experiencing in 25. So too early to give guidance yet. RFP season’s feeling very strong. Sales team’s doing a great job and the mojo on the team and just the general sentiment and culture within the business, I would say, is the best it’s been in a very long time.

Richard Baldry (Analyst at Roth Capital Partners)

So if you back out the headwinds from top 20, because the blended growth is not as negative as the top 20, could you talk about your non–top 20 health there? Is it growing well year over year? What are new logo wins looking like maybe in non‑pharma, like biotech or med devices, or how are you feeling outside of that category as an indication of underlying strength for demand for what you’re offering?

Stephen Silvestro (Chief Executive Officer)

Yeah, the growth in the top 20 and long tail is really, I would say, very encouraging. And we are seeing a smattering of not just pharma, biotech, but we are, to your point, seeing some med tech come in, some other types of businesses that are utilizing the network and the tools that we’ve got to compete with some of the larger manufacturers. As I shared, we did have one of those mid‑tier clients reach kind of top 10, maybe even top 5 status within the business this year and going into next year.

So we’re feeling very encouraged around that and seeing the expanded use cases for the platform and the technology. The way that they’re using it is also, I think, expanding the Canada business. So it’s really good. I can’t really share a broken out growth rate, but it’s well into double digits, I would say, from where it was last year. Andy, Ed, feel free to chime in if you want to add anything else, but very encouraging.

Andrew DSilva (Chief Business Officer)

Yeah, you nailed it, Steve. I think the long tail has a lot of opportunities there. We have some very skilled team members and a sales team that are highly focused on growing that, and we think that the budgets there are open for us to win.

Richard Baldry (Analyst at Roth Capital Partners)

And then switching on the cost side, are the cost efficiency gains pretty much behind you? Are there other areas you can maybe use AI technologies to keep pushing that a little bit? And then a tangential of that, with the EBITDA defended as well as it is, why the focus on paying debt down so fast versus maybe doing aggressive buybacks to reward your patient investors?

Stephen Silvestro (Chief Executive Officer)

Yep. Andy, why don’t you take the EBITDA question and Ed, why don’t you take the paying down the debt question?

Andrew DSilva (Chief Business Officer)

Okay. Yeah. We’re constantly looking to be able to optimize our OPEX and just overall structure. You saw over the last 12 months we implemented a pretty significant cost‑cutting strategy that’s paying dividends to our bottom line right now. And we’ll continue to look at that kind of stuff as we go into 2027. Obviously we’re not going to commit to anything right now, but with AI continued advancement and the automation initiatives that we have within the company, there’s a lot of opportunities that we see.

Edward Stelmakh (Chief Financial Officer)

Ed, you want to talk about? So great questions, Rich. So we are actually, as we said before, looking to change that mix a little bit and actually start to push a little bit harder on the actual stock buyback. I would say stay tuned in Q4 and I think you’ll see more activity there from us on the equity buyback.

Richard Baldry (Analyst at Roth Capital Partners)

Got it. Thanks for.

Stephen Silvestro (Chief Executive Officer)

Yeah, you got it. No problem, Rich. Thank you for the good questions.

OPERATOR

Our next question is from Josh Nichols with B. Riley Securities. Please proceed.

Josh Nichols (Analyst at B. Riley Securities)

Thanks for taking my question. Great to see another quarter of strong margin, paying off the debt. I think it was already touched on. Look, 2027 contracted revenue looks like that’s trending well. I just want to dive a little bit more into 4Q. I know you mentioned the contracted revenue is tracking 20% below or so lower levels. Just looking at the implied guide for 4Q, it’s kind of down 13% year over year. Is that delta really kind of a good way to think about the potential risk for the midpoint overall, or how much of the 4Q revenue, based on the guidance, is already contracted today?

Stephen Silvestro (Chief Executive Officer)

Andy, why don’t you take that one.

Andrew DSilva (Chief Business Officer)

Hey Josh, nice to hear your voice. So right now for the full year to hit the midpoint of our guidance range, we’re a little over 90% in contracted revenue. In the last couple years prior to this, we were closer to the mid‑90% range. So there’s a little to go get this year. But with that being said, obviously there was a lot of disruption this year with that large customer with MFN and things like managed services. So typically in situations like that, you’ll see a little bit more activity in the back part of the quarter, back part of the fourth quarter.

And based on the conversations we’re hearing from our sales team and our sales‑focused executives, there seems to be enough pent‑up demand to help bridge that gap.

Josh Nichols (Analyst at B. Riley Securities)

Yeah, thanks for the color there, Andy. And I know previously you’ve talked about, given the company’s large fixed cost structure, about 30%‑type EBITDA margin being achievable. I had to notice that despite revenue being down, you did 29% EBITDA margin this quarter. And with the bookings looking pretty solid so far for 2027, do you think that that’s a target that you’re going to potentially look to revisit or there’s potential upside if the company gets back to healthy double‑digit growth?

Stephen Silvestro (Chief Executive Officer)

Yeah, I’ll take that one. Oh, go ahead, Andy. You take it. Go ahead.

Andrew DSilva (Chief Business Officer)

Yeah, like Ed and Steve have been saying for the last few quarters, our operating model really is truly scalable as the business continues to grow top line. And so our objective has always been to get to a 30% plus gross margin as revenue continues to grow. Now we haven’t finalized our guidance or anything like that for 2027, so we’re not going to commit to a 30% margin for next year. But you can obviously see there’s a path to do that in the not too distant future.

Josh Nichols (Analyst at B. Riley Securities)

Sounds good. Appreciate it, thanks.

Stephen Silvestro (Chief Executive Officer)

Thank you. Thanks for the questions.

OPERATOR

As a reminder, press star one on your telephone keypad if you would like to ask a question. Our next question is from Eric Martinezzi with Lake Street Capital Markets. Please proceed.

Eric Martinezzi (Analyst at Lake Street Capital Markets)

Yeah, just wanted to better understand the Q4 reset here. Is the tracking 20% below a number that has gotten larger at this snapshot, or was that similar to where we were exiting Q1, Q2?

Stephen Silvestro (Chief Executive Officer)

Hey Eric, thanks for the call. It’s largely the same as where we were. We’ve not seen an improvement in the contracted revenue year over year. We thought we would see a little bit more buy‑up activity and we just haven’t seen the buy‑up activity that we hoped we would see coming into the fourth quarter. As we’ve been very consistently messaging and communicating all throughout the year, we knew that Q4 was going to be dependent on the return of some buy‑ups and we hoped that we would get our large disrupted client back to spending and back engaged in the fourth quarter.

I think we are delighted that the client is back and they’re spending. The levels are still small because they’re starting to invest off of non‑budgeted dollars. So they’re coming back in off of non‑budgeted dollars, but they are spending and I think in a pretty meaningful way. But the visibility into buy‑ups is the main reason for the adjustment on the guidance. We just don’t know yet. There is a possibility that we could see some of that come in, but we just don’t have visibility.

And I think we as a management team feel strongly we want to just continue to be clear on the communication and try to manage the expectations and maintain our solid credibility, which we’ve worked hard to build up. So that’s really what it is. No major disruptions to contracted revenue. We just haven’t seen the buy‑up growth yet that we are anticipating.

Eric Martinezzi (Analyst at Lake Street Capital Markets)

It seems like a strange behavior though. I would think pharma would want to attract customers. You’re not that big of a budget spend for them. So to hear that the RFP momentum is up 20%, 2027 is up 20%, but 2026 is down 20% — help me square those.

Stephen Silvestro (Chief Executive Officer)

Well, contracted revenue has in it a year over year tracking across time. So if you take out the 10.4 million of that one disrupted client and factor that in, that’s a good portion of the 20% decline of contracted revenue year to date. So it doesn’t take a whole lot to get to the 20%. And then if you contemplate what the RFP season and the output of that could look like coming in at 27, that’s where you start to see recovery happening. And that is, in fact, what we’re seeing.

So, Ed, you can chime in and add anything else there that you would add, but I think it’s very linear mathematically, Eric, in terms of what we’re seeing.

Edward Stelmakh (Chief Financial Officer)

Yeah, I agree. I think, look, being 20% below with now three quarters into the year is a little different than being 20% ahead with just a few weeks of next year’s RFP season behind us. As Steve said, we’re still early innings, but really positive signs that we’re coming back strong since 2027. However, this year it’s kind of starting to get a little bit baked, which is the reason why we’re down our revenue expectation in line with what we’re seeing in our backlog.

Now, could there be a surprise on the upside in Q4? You never know. But the odds of that in the next six weeks are definitely getting a little bit lower than we would like. So hence the reason why we’re dialing it down.

Eric Martinezzi (Analyst at Lake Street Capital Markets)

And then, Steve, with the change in the Congress, shifting from Republican to Democrat, I know historically sometimes big pharma becomes a punching bag for that type of party shift. Just curious to know if your clients are anticipating that at all as they look out to next year.

Stephen Silvestro (Chief Executive Officer)

Yeah, we have gotten a couple questions around that. Or really I would say not questions, more comments from clients around that. I think they are just uncertain, Eric. They are uncertain. I think they have just come through what they thought was going to be sort of a frothy period for them with the current administration being largely Republican controlled. And that wasn’t, as we all know, they got whacked with the pinata stick via MFN and 5,000 other things.

And so what they thought would be a windfall for them, I think with this current administration and Congress in the House, was certainly not. They all recalibrated around that, and so they don’t really know what to expect around this. It’s really an interesting topic. There were a few good articles that I can talk to you about later, but there was one in Endpoints, another one in the Wall Street Journal. I was happy to share them along from some of the executives kind of sharing and sharing thinking, but we’ll see where that goes.

Eric Martinezzi (Analyst at Lake Street Capital Markets)

Got it. Thanks for taking my questions.

Stephen Silvestro (Chief Executive Officer)

Absolutely.

OPERATOR

Our next question is from David Grossman with Stifel. Please proceed.

David Grossman (Analyst at Stifel)

Thank you. You know, Steve, you mentioned in your prepared remarks that there are some indications of pent‑up demand that were encouraging. Can you perhaps give us a little more detail about what you’re seeing and why you’re encouraged?

Stephen Silvestro (Chief Executive Officer)

Yeah, thanks, David. Good to hear your voice. Hoping to see you soon. We are. What we’ve seen is that people have warehoused dollars throughout the year and have waited to see sort of Q1 through Q4 where they were going to place bets and whether or not they were going to get whacked with this administrative piñata stick and have to course-correct. We are seeing pockets of spend increase, particularly in the mid-tier long tail, as I’ve already shared.

And we believe that that pent-up demand still exists with several of the major brands that we deal with. And so we’ll start to see some of the buy-up activity, we believe, in the next six weeks. The challenge on recognizing the revenue is we’ve got to contract it, deliver it, measure it, and so forth in a period of time, which is what Ed was articulating. And so to be able to, you know, get all of that accomplished inside of six weeks at a broader level, we just want to make sure we’re communicating clearly around it.

As Ed said, the pent-up demand is there and we could, it could materialize, but we don’t have visibility to it. And so we don’t want to overpromise in that regard. But it is there. And most of the time, as you know, David, from our conversations, these are use-it-or-lose-it dollars. So they’re going to have to do something with the dollars that they had warehoused for the first three quarters. We’ll see how they deploy them, interestingly enough.

Yeah, go ahead, Ed, that’s fine.

Edward Stelmakh (Chief Financial Officer)

Yeah. I was going to add to Steve’s comments. I think, you know, quantitatively speaking, the fact that we’re up 20% year over year on contract revenue same time period, it’s kind of a good early indicator of some demand that was really visible in 2026.

Stephen Silvestro (Chief Executive Officer)

Yeah. There’s one other thing I would say to you, David, and I’ll give you the next question, but if you look at some of the other guys that have reported or companies that have reported that have a different revenue model that might be subscription in nature, they’re reporting quarters that are up for Q3, Q4 outlook, and that’s mostly because they’re looking more in a forward-looking way in their subscription-based models. And that’s an indication, it’s a bellwether of where the industry is trending, I believe.

So we could talk more about it on the call after if you want.

David Grossman (Analyst at Stifel)

Right, okay. No, thank you for that. And then Just back to your comment about the one large client that has pulled back this year. Is it fair to say, just based on the number you just provided us, that that’s about 10 points of NRR year to date? Is that the way to look at that, or for the year it’ll be about 10 points of NRR?

Stephen Silvestro (Chief Executive Officer)

Yeah, Ed, you can verify that, but. Or Andy. Sure, Andy, go ahead. I can do the math that fast.

Andrew DSilva (Chief Business Officer)

That’s about right. There’s 10% customers last year and this year they’re, you know, the first nine months of the year they didn’t do any revenue. So that’s about right.

David Grossman (Analyst at Stifel)

Okay. And if I think about that, and let’s just say you’re going to get a bit of a, you know, the headwind goes away because you comp out, right, because you say they’re going to start growing a little bit at least in, or spending in the fourth quarter. Is there any reason to think that NRR wouldn’t be 100% or better for next year?

Edward Stelmakh (Chief Financial Officer)

No, I mean we haven’t given guidance yet, so I wouldn’t say we can really give you. I mean that would be bridging that gap pretty significantly on giving guidance. So obviously if our business grows a meaningful portion next year, our NRR would be over 100%. Historically speaking, roughly 5 to 15% of our business comes from new logos every year. So I mean if you kind of think about that and apply a growth rate that you believe is reasonable for next year, you can kind of back-of-the-envelope get to what you would think the NRR would be.

David Grossman (Analyst at Stifel)

Yeah, I guess what I’m getting at is do we have any other known divots coming that would impact 27?

Stephen Silvestro (Chief Executive Officer)

No, not in 27. We’ve got some 28 like LOE that we’ll have, which we’re planning for and have already planned around. You and I talked about that at our last conference. So just normal course of business stuff, but no major, no major divots that we see at this point.

David Grossman (Analyst at Stifel)

Got it. All right, guys, good luck.

Stephen Silvestro (Chief Executive Officer)

Thank you. Thanks, David.

OPERATOR

This will conclude our question and answer session. I would like to turn the floor back over to Steve Silvestro for closing comments.

Stephen Silvestro (Chief Executive Officer)

Thank you, operator. And thank you to everyone for joining our call today, it was really a—excuse me, pardon me. Sorry about that. As we conclude our call today, there’s really three things that I want us to be focused on. First, our third quarter results demonstrate the progress we’ve made in strengthening the financial foundation of OptimizeRx. And I think we’ve talked about that. Questions reflect that. And while revenue growth remains below our expectations for the fourth quarter, our ability to deliver significant adjusted EBITDA outperformance reflects the benefits of our margin optimization efforts, our disciplined cost management, and the operating efficiencies we’ve implemented throughout the year.

And these improvements position us to generate stronger operating leverage as revenue growth returns, which I think is great news for all of us. Second, we believe our technology platform and proprietary data are highly differentiated. Our continued investments in our patent-protected DAP technology, our expanded NLAB capabilities, our strategic partnerships with programmatic DSPs such as DeepIntent, The Trade Desk, and PulsePoint, and our continued product innovation are creating new ways for pharmaceutical manufacturers to engage healthcare providers and patients. Together, these advancements strengthen our competitive position and expand our long-term growth opportunities.

And third, and lastly, we remain focused on translating these investments into improved commercial execution. While we’ve yet to recognize revenue from the investments we’ve made in 2026, we are very encouraged by the demand signals from customers. We’re also encouraged by the improvements made in our commercial organization, bringing renewed strength and firepower to OptimizeRx’s culture and the opportunities associated with our expanding product portfolio.

These changes are showing up in our year-to-date contracted revenue growth for 2027 and are an encouraging indicator of what lies ahead. We believe the progress we’ve made in 2026 has established a stronger foundation for the future of OptimizeRx, and we remain committed to delivering sustainable growth, improving profitability, and creating long-term value for our shareholders. Finally, I’d like to thank our employees for their dedication and execution, our customers and our partners for their continued trust, and our shareholders for their ongoing support.

In particular, I’d also like to thank Ed for his guidance, his direction, his stewardship during his tenure at OptimizeRx as he continues to transition finance leadership to Andy and Heather and to help ensure that we’re prepared for the next chapter of the company’s growth. We appreciate you joining us today and look forward to updating you on the progress of the next quarter.

OPERATOR

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 contain forward-looking statements within the definition of Section 27 of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

These forward-looking statements should not be used to make investment decisions. The words anticipate, believe, estimate, expect, intend, may, plan, possible, seeking, will, 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 regarding the company’s full year 2026 revenue and adjusted EBITDA guidance, the company’s ability to secure, convert, and recognize revenue during the fourth quarter, the timing and normalization of customer spending including expected pent-up demand and the 2027 RFP season, renewed spending from a previously significant customer, expected gross margin for the full year 2026, the benefits of the company’s cost reduction and margin optimization initiatives and resulting operating leverage, the company’s commercial organization and go-to-market strategy, the company’s programmatic strategy and partnerships including the expected availability of its inventory to PulsePoint advertisers, the commercialization and adoption of the company’s products and AI-enabled capabilities including DAP, NLAB, and CoPayQ, the company’s competitive advantages and position, the company’s ability to create recurring revenue opportunities and achieve sustainable long-term growth, the company’s intention to repay its outstanding debt ahead of schedule and potential share repurchases, the orderly transition of finance leader responsibilities, and the company’s ability to create long-term value for its shareholders.

Forward-looking statements also include management’s expectations for the rest of the year and for 2027. 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 forth in, contemplated by, or underlying these forward-looking statements.

The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, the timing and amount of customer spending and the company’s ability to convert contracted and pipeline opportunities into recognized revenue, the effects of government regulation and drug pricing policy, competition, dependence on a concentrated group of customers, the success of new products and programmatic partnerships, cybersecurity incidents that could disrupt operations, the ability to keep pace with growing and evolving technology, the ability to maintain contracts with the electronic prescription platforms and electronic health records networks, risks related to the company’s indebtedness, and other material risks.

Risks and uncertainties to which forward-looking statements are subject that could affect business and financial results are included in the company’s annual report on Form 10-K for the year ended December 31, 2025, its subsequent quarterly reports on Form 10-Q, 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. 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, running through for a year on the investor section of the company’s website. Thank you for joining us today. This concludes today’s conference call. You may now disconnect your lines.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.