[Management View]
OptimizeRx management presented upgraded guidance methodologies, now anchored exclusively to contracted revenues and recurring client business streams instead of pipeline projections. Strategic investments in Data Activation Platform (DAP) and acquired micro-neighborhood targeting capabilities have accelerated the transition to more predictable revenue recognition and facilitated early multi-year contracts. Discussions highlighted sustained market demand across both healthcare provider (HCP) and direct-to-consumer (DTC) channels, with growing adoption among mid-tier pharmaceuticals. Operational leverage remains strong as variable expenses parallel topline performance, while stable gross margins benefit from selective channel and product mix optimization.

[Outlook]
Future revenue and profitability guidance for 2026 explicitly omits any contributions from new strategic partnerships, including Lamar Advertising, reflecting a conservative approach to forecasting. Management expects gross margins in the "upper fifties to low sixties range" supported by product mix evolution rather than short-term managed services fluctuations.

[Financial Performance]
OptimizeRx reported a modest cash-basis increase in operating expenses (~$2 million YoY), driven by higher variable compensation from outperformance. Recurring business constitutes 85%-95% of annual revenue, with new logos representing the remaining share. The company has transitioned to a more subscription-like, predictable revenue model, smoothing revenue phasing across quarters.

[Q&A Highlights]
Question 1: When you look at the implied guidance for fourth-quarter revenue, it would be slightly down year over year at the top end of guidance. Talk about either any one-time year-ago issues or other things because your net retention would argue that is sort of difficult to do.
Answer: The new guidance reflects true visibility based on contracted revenue, excluding potential buy-ups and pipeline deals without current visibility. Management emphasized a conservative approach to providing guidance, focusing on bookings already won and starting to burn into revenue.

Question 2: If you look at the adjusted EBITDA guidance, you would have an up revenue quarter, maybe 10% plus sequentially. But the adjusted EBITDA would either be slightly down to narrowly possibly up. Is there any one-time expenses year-end that create more of a headwind because it would still be down year over year as well?
Answer: Management assumes a conservative gross margin number with no significant operating expense line pops. The focus is on channel and product mix, aiming to hit or beat the top end of the range.

Question 3: Could you expand on the changes that may be creating better visibility and giving you the confidence to guide to 2026 at this point?
Answer: The transition to more subscriptive data-driven technologies like DAP and micro-neighborhood audience targeting has smoothed revenue and provided renewable views into 2026. Early multi-year contracts start earlier than transaction-level contracting, enhancing visibility.

Question 4: How much of managed services business was present in the third quarter, and are you making the same assumption for the fourth quarter and 2026 guidance?
Answer: Managed services business returned to a normalized rate in the third quarter. The forecast includes only won and starting to burn into revenue managed services business, excluding pipeline deals without visibility.

Question 5: Can you help bracket the kind of retention that is the baseline to achieve the 2026 guidance range?
Answer: Historically, 5-15% of business comes from new logos annually, with the remaining constituting net revenue retention. This assumption underlies the 2026 guidance.

Question 6: Could you provide some color on the partnership with Lamar Advertising and the size of the opportunity here?
Answer: Lamar is transforming its business model from billboards to digital screens, leveraging OptimizeRx's patient-finding capabilities. The partnership is in early stages, with optimistic initial testing results, but no contributions are factored into the 2026 forecast.

Question 7: Could you talk about the gross margin expansion in the third quarter and how should we be thinking about margins going forward?
Answer: Gross margin expansion is driven by product/channel mix and growth in DAP and GTC platforms. Management expects margins to stabilize in the upper fifties to low sixties range, with upside potential as the year progresses.

Question 8: Could you talk about the mix of gross margin expansion dependent on channel mix versus operating leverage for 2026?
Answer: Margin expansion will be driven by audience growth through DAP and M&T products and optimal channel partner mix. Execution functions are predictable, shaping gross margin expansion opportunities.

Question 9: Could you provide more color commentary on your ability to drive additional operating leverage in the business?
Answer: Operating expenses increased modestly due to higher variable compensation from overperformance. Management expects a relatively stable operating expense run rate on a cash basis.

[Sentiment Analysis]
The tone of analysts was inquisitive and supportive, seeking clarity on guidance and operational strategies. Management maintained a conservative and transparent approach, emphasizing predictability and visibility in revenue and margin forecasts.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 | YoY Change |
|-------------------------|---------|---------|------------|
| Revenue | $XXM | $XXM | +X% |
| Gross Margin | XX% | XX% | +X% |
| Operating Expenses | $XXM | $XXM | +X% |
| Net Revenue Retention | XX% | XX% | +X% |

[Risks and Concerns]
Risks include government regulation, cybersecurity incidents, dependence on a concentrated group of customers, and the ability to keep pace with evolving technology. The company also faces risks related to maintaining contracts with electronic prescription platforms and electronic health records networks.

[Final Takeaway]
OptimizeRx's strategic shift to a more predictable revenue model and conservative guidance approach reflects strong operational leverage and market demand. The company's investments in data-driven technologies and early-stage partnerships position it well for sustained growth. Management's transparency and conservative forecasting provide confidence in achieving near-term goals and long-term growth objectives.