OptimizeRx Corporation (OPRX) Q4 2021 Earnings Call Transcript

OptimizeRx Corporation (OPRX -0.76%)
Q4 2021 Earnings Call
Feb 24, 2022, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, and thank you for joining OptimizeRx's fourth quarter fiscal 2021 earnings discussion. With us today is the chief executive officer of OptimizeRx, William Febbo. He is joined by company Chief Financial Officer Ed Stelmakh; Chief Commercial Officer Stephen Silvestro; executive vice president of finance and accounting, Doug Baker; General Counsel and Chief Compliance Officer 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 made available for a replay via webcast only. Instructions are included in today's press release in the Investors section of the company's website. Now I'd like to turn the call over to OptimizeRx CEO, William Febbo. Sir, please go ahead.

William Febbo -- Chief Executive Officer

Thank you, operator. Hi, everyone. I want to begin by thanking all of you for joining us today. While the last 12 months have been an exciting period of operational and commercial growth for OptimizeRx, we're even more excited for the year ahead as we move forward with continued momentum as a company.

The major investments we've made over the last year have centered around setting up the organization for future scalable growth. We have completed a strategic build-out of OptimizeRx's leadership team. On the solutions and digital enablement front, we launched several AI and data-centric solutions expanding our strategic capabilities, positioning us well to focus more on the key markets, including specialty medications. And lastly, we made huge progress in building out additional reach to doctors and patients.

In essence, we have invested in our three primary growth drivers to continue our organic growth trajectory. To illustrate this point and how we build customer stickiness as a technology partner to life sciences, early this week, we announced the launch of a large-scale therapy initiation program with a top 10 pharma client. The program accelerates patients' access to a new specialty drug that can reduce inflammation for a chronic condition and significantly improve the quality of life for this previously underserved patient population. The pharma client is leveraging OptimizeRx's suite of digital solutions to streamline therapy initiation for these patients by ensuring that physicians have immediate electronic access to the appropriate enrollment forms needed to prescribe the medication.

This is our largest enterprise scale therapy initiation program launched to date. As the new specialty therapies continue entering a crowded market with complex requirements and sometimes limited pharmacy distribution networks, OptimizeRx is well-positioned to help life sciences get patients on therapy quickly and more efficiently. We are very confident in our suite of solutions, and we continue to receive overwhelmingly positive client feedback. 2021 was the last year that enterprise deals remained a measure of our success and a proxy for execution.

As an organization, we feel that we have surpassed this metric both in deal count, as well as in the overall demand for bundled solution sets. We have put forward a new set of performance metrics against which to measure our success. Ed and Andy's leadership have been key as they hit the ground running since joining our team and led the development of relevant key performance indicators, KPIs, that best represent our land-and-expand strategy within key customer accounts. As a proxy for execution, the KPIs that we introduced in advance of this call include the company's penetration within the top 20 largest pharmaceutical manufacturers, net revenue retention and revenue per employee, which Ed will go into more detail later.

From a customer capture perspective, we now serve nearly all of the top 20 large pharma manufacturers who represent the largest portion of the industry's marketing spend. Our KPIs are important from this perspective as the pharmaceutical industry is dominated by large companies with multiple brands, so our revenue is naturally going to be concentrated within these larger entities. For example, more than three-quarters of our net revenue for last year was generated through these industry bellwethers as we deepened our relationship with large pharma and their brands. We're also starting to generate more revenue per employee, which is a testament to our operational efficiency and ability to scale.

And to give you an idea of the market opportunity, our footprint in the top 20 pharma is positioning us to compete and win our share of the largest categories of addressable commercial spend, which in turn will be communicated in a transparent and measurable fashion. This focus on penetration and capturing a large share of wallet within pharma is going to be a strategic imperative for 2022 and a core to our ability to grow revenues while meeting or exceeding our financial targets. As a baseline, we believe that our total addressable market for digital-enabled solution is in the billions of dollars. Based on that, we estimate that we have captured less than 5% of this rapidly emerging market, making us confident our growth will continue.

This year, we've been even more focused on helping life science companies leverage the power and reach of our platform's technology. We are helping them bring therapeutic awareness to both patients and providers and, just as importantly, assisting patients to start and stay on life-impacting therapies. As a healthcare technology company, we are thrilled at the opportunity to positively affect therapeutic outcomes through the application of modern data practices and AI-driven solutions throughout the patient journey at the point of care. In that spirit, the fact is that there is a vast industry white space standing before us that is yet to be chartered.

As we progress through 2022, we will continue leveraging our team's domain expertise and our capabilities as a leading health technology company enabling engagement between life science organizations, healthcare providers and patients during critical junctures throughout the patient journey. What this translates to is doing a great job on behalf of our clients, digitally bridging the gap between life science organizations, patients and providers, all while staying in strict compliance of all regulatory requirements. Like many other industries, healthcare is undergoing a digital evolution, striving to adapt to the constant pressure of digitization and the prevailing use of mobile and digital devices and other technologies. We are facilitating the digital evolution for life science organizations in the technology solutions that our clients require to move forward in this arena so that they won't have to go it alone.

The industry evolution is one of the reasons we view our platform's adoption as still very early on the S curve, despite the strong growth we've been able to demonstrate since our refounding in 2016. Our product demand and brand penetration is also rising among our customers as they see the value of the platform's ability to meet their digital engagement needs. The fact that our enterprise engagements provide a precise, measurable return on investment against their marketing spend is key. This performance measurement will continue to be a key theme for the remainder of 2022.

Before we talk about this further, I just want to mention again that we have spent the last several years configuring our platform for scalability, including establishing a technology center of excellence in Croatia. As scalability can be a major impediment for growth, we made the decision to take care of this early on, so we are now able to focus our attention solely on efficient and rapid market expansion and the growing digitization of the healthcare industry at large. In 2021, we brought together a terrific group of data scientists to help with the build-out of our innovative digital solutions. That set of solutions now includes a full suite focused specifically on the deployment of AI, artificial intelligence, and data analytics live at the point of care to provide physicians with real-time information and support while they're making critical treatment decisions with their patients.

Providing key information in real time at the point of care can help get a patient initiated on therapy a lot sooner. This capability is unbelievably valuable to life science companies, particularly those specialty brands where early intervention can be the deciding factor in whether a patient will have a positive therapeutic outcome. Financially, as noted in our press release, we had yet another record year. Revenues grew 42% year over year to $61.3 million.

Our business is really a big example of the whole being greater than the sum of its parts. Our solutions span the entire patient journey beginning at the initial point of care to drive better engagement and revenue growth. We do this through a single platform approach, delivering everything from physician and pharma sales engagement to personalized patient support in order to improve therapeutic outcomes. Like with many industries right now, the data tools we are deploying have only started to come into the fold of mainstream customer and digital engagement in the last several years.

In terms of our new set of KPIs and outlook and given our position in the market, we're really excited to take this meaningful step. We're looking forward to another strong year of growth while helping patients start and stay on life-improving therapies. Finally, before we go to our financial review with Ed, I want to remind everyone on the call that even with our focus on growth and being in the early innings from a market penetration standpoint, we generated positive cash flow from operations in 2021. And lastly, while not an official KPI, our clients remain extremely pleased as we are delivering an average ROI of 13-1.

And as another reporting quarters, some clients are experiencing much higher ROIs. With that, I'd like to turn the call over to our CFO and COO, Ed Stelmakh, who will walk us through the financial details for Q4. Ed?

Ed Stelmakh -- Chief Financial Officer and Chief Operating Officer

Thanks, Will, and good afternoon, everyone. As for all our calls, a press release was issued with results for our fourth quarter ended December 31, 2021. 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-K, which will be filed in the coming days.

Turning to our financial results for the fourth quarter ended December 31, 2021. Our reported revenue for the period was $20.3 million an increase of 24% over the $16.4 million from the same period in 2020. The increased revenue resulted from growth in sales across our access, assurance and affordability solutions. Gross margin for the quarter increased from 52% in the year-ago period to 61% in the current reporting period.

The gross margin increase is a result of solutions and channel partner mix. As we highlighted in our earnings release, we expect our gross margin to remain relatively constant in the 57% to 60% range for the full year 2022. Operating expenses increased to approximately $11.8 million in the fourth quarter of fiscal year 2021, as compared to approximately $7.2 million in the same year ago period. The increase in operating expenses was primarily related to salaries, wages and benefits and other human-related costs as we invested in the expansion of our team to support future growth by expanding our commercial activities and enhancing and growing our solution offerings.

We delivered net income of $623,000 in the fourth quarter of fiscal '21, as compared to a net income of approximately $1.4 million during the same period in 2020. For further details, you can refer to our MD&A section of our upcoming 10-K. On a non-GAAP basis, net income for the fourth quarter of 2021 was approximately $4 million or $0.23 and $0.22 per basic and fully diluted share, respectively, as compared to non-GAAP net income of approximately $2.7 million or $0.18 and $0.16 from the basic and fully diluted basis in the same year ago period. Now turning to our balance sheet.

Cash and cash equivalents totaled $84.7 million as of December 31, 2021, as compared to $85.1 million as of September 30, 2021. In terms of our revenue outlook for the full year 2022, the company expects net revenues of $80 million to $85 million, representing year-over-year growth of 31% to 39%, respectively. This wraps up the discussion of our financial results for 2021. Before I turn the call back to Will, I also wanted to briefly talk about the KPIs that we introduced on February 15, 2022.

We have had a lot of positive feedback from many of our investors regarding increased transparency, as well as quantifiable metrics that can be used to continue to communicate our story as our business grows and matures. Our average revenue for top 20 pharmaceutical manufacturers grew year on year by nearly 30% to $2.5 million in 2021 as we supported additional brands and our expanded solution set continues to gain ground with now 19 of the top 20 largest pharma companies in the world, which represents the bulk of the industry's commercial spend. In addition, our ability to create tangible value for our clients, as well as growing demand for our solution sets is reflected in the high net revenue retention rate of 127% in 2021. And last, but certainly not least, our operating model continues to demonstrate significant capability for leverageable growth with revenues per FTE at $730,000 in 2021, an almost 20% year-over-year improvement.

Our plan is to continue to report these KPIs on a regular basis throughout the year to ensure open and transparent communication with our shareholders. And with that, I would like to turn the call back over to Will. Will?

William Febbo -- Chief Executive Officer

Thanks, Ed. On behalf of the team at OptimizeRx, I want to thank everyone for joining us on the call today. The industry tailwinds that are driving the evolution and reinvention of how technology is getting broadly applied in the healthcare industry are going to remain a big part of our success for years to come. We have assembled an incredible team in order to help with our execution, and we have a solid strategic road map in play for 2022 and beyond.

So far as execution in KPI go, we believe that we have set a pace of achievement that is not only attainable but meaningfully transparent for our investors to track in the days ahead. It continues to be an honor to be at the helm of the OptimizeRx company, which to date has been a wonderful blend of financial performance centered around improved patient care delivery. Looking forward to the next call and a wonderful 2022. Thank you.

Operator?

Questions & Answers:

Operator

Thank you. [Operator instructions] And we will go to our first question from Ryan Daniels of William Blair.

Ryan Daniels -- William Blair -- Analyst

Congrats on the strong end to the year, and thanks for all the additional KPIs. I'll add my kudos there. It adds a lot of visibility, so we appreciate that. A couple of questions in regards to some of the metrics you frequently disclosed that weren't in the press release.

Can you update us on the current status of the pipeline and things like close rates and maybe average contract value that you saw in your enterprise deals in the most recent quarter?

William Febbo -- Chief Executive Officer

Hey, Ryan, thanks. Yeah, we're really taking the direction of sticking to the KPIs, but -- so no specific numbers, but pipeline remains incredibly strong. This is the time of the year where it is still building, but a lot is closing. And so we still feel good about all our -- all the data we shared before, but we really want to focus in on these new KPIs by revenue, by manufacturer, and employee and net revenue retention.

But I will say that we -- given the team we enhanced, given the relationships we have, just that visibility that we get, obviously, made us feel confident enough, backed by pipeline and historical close rates and all that good stuff to give guidance for the year. So we're really excited about that. And look forward to tracking against it really well.

Ryan Daniels -- William Blair -- Analyst

OK. That's fair enough. And then just a couple of more bigger picture questions. As you move more toward enterprise-level contracts and AI-driven solutions, real-world evidence, is there a need to develop any areas of your technology more or look to M&A activity to fill any gaps? Or just any thoughts about how the offering might develop going forward, given the needs in your client base?

William Febbo -- Chief Executive Officer

Yeah. You heard it in our comments or prepared remarks. We really did a lot of investing over the last few years to a point where we can layer in solutions at a fraction of the cost and get really immediate ROI just because of the access we have to the clients. So no need for extreme investment going forward.

It's really about focusing on our growth drivers, which is the land and expand within the client, keep that net revenue retention solid. It's also about just continuing to get additional reach, which we've made some really good progress over the last 12 months and anticipate being able to reach other channels as well, wherever doctors and patients are. And then, as you said, the new solutions, it really makes the relationship really -- I think we're proud of all of it, but the layering in of additional solutions through a time where teammates are not together, it's all virtual, we really spent a lot of time innovating and rolling it out and getting to commercial success pretty quickly. So I would anticipate we'll always be an innovator in the space and feel like we -- by focusing on that patient journey for our clients, we've been able to innovate and leverage and get to market very quickly.

Steve, do you want to add anything to that?

Steve Silvestro -- Chief Commercial Officer

I think that was great. Hey, Ryan, how are you doing? It's good to hear your voice. I would just add one more thing, Will, which is diversification of therapeutic areas and specialties as we expand the reach to physicians. And Ryan, I think you and I have talked about that before, but part of our focus on the channel side has been reaching more specialists, whether it's oncologists or immunologists, etc.

And we succeeded in that largely. So I think that also supports this addition of the AI and real-world evidence efforts that we've had as we're looking for sort of more difficult patients to find, harder physicians to support because of the complexity of the diagnosis of the patient. So good stuff going on there.

Ryan Daniels -- William Blair -- Analyst

Makes a lot of sense. And then given your ability to work with providers to get patients on appropriate therapy quicker, which I know is a big burden for them a lot of times, especially with prior authorization, which can impact clinical outcomes because they might not get patients on quick enough. I'm curious if there's an opportunity for you also to work with healthcare payers or at-risk provider groups to help enable that more rapidly because it should drive cost savings for the system longer term by getting these patients on medications -- specialty medications on a more rapid basis.

William Febbo -- Chief Executive Officer

Yeah, Ryan, thanks. So we really made a decision to stay focused on our client set, which are the manufacturers. But you can see why this platform is so attractive, right? What we've built are rails, right? Rails into the point of care. Today, we use that 100% for the manufacturers to reach physicians and patients for all the reasons people know, but mostly focused on access, affordability and adherence.

But if you're an investor listening to this, it's important to note that that is valuable to multiple other industries. But the team we have now is really 100% focused on the pharmaceutical manufacturers. And as we mature, we'll assess those other segments.

Ryan Daniels -- William Blair -- Analyst

OK. Great. Fair enough. I'll hop in the queue.

Thanks again, guys. Appreciate it.

William Febbo -- Chief Executive Officer

Thanks, Ryan.

Operator

And we'll go next to Sean Dodge of RBC Capital Markets.

Sean Dodge -- RBC Capital Markets -- Analyst

Yes, thanks. Good afternoon, and I'll add my congratulations on the progress this past year. I guess what I want to sort of -- it's just maybe thinking about the EBITDA trajectory. Bill, you talked about doing the work to build an infrastructure, that's a skill.

You did some investing, you kind of ramped investing in the latter part of last year. Is that pretty much done now? Or is there still some headcount you think you need to add here in near term? And I'm just trying to understand how much of this incremental revenue you're guiding to we should be expecting to drop through to EBITDA.

William Febbo -- Chief Executive Officer

Yeah. Great question. Thanks, Sean. So yeah, we went in heavy last year.

But I will say, just a reminder of last year, that was all organic growth with investing for growth forward, OK? So I think when people dissect Q4, they're going to be pretty encouraged by what we can do as a company. And I think they should expect it going forward. We are -- we're proud that we're a technology company, and we're proud of our new KPI around revenue per team member, and we really want to stay there. And we feel like we can.

And if you think about our client set, as they are digesting this massive shift in sort of methodology around commercialization to incorporate more digital, they're looking for partners who can take and scale and not have to -- and do it at speed. And I think we meet all those criteria, right? We're compliant, speed, transparent and we're nowhere near at capacity against our network either by solution or by reach. So yes, lots of room ahead on that. I think you can expect limited investment, although I will caveat all of this that we're still an early stage public company with a lot of opportunity.

And I think we've built the credibility up that when we want to invest, it usually pays off for everybody.

Sean Dodge -- RBC Capital Markets -- Analyst

OK. Great. And maybe on the opportunity. So you've talked before about the ROI your solutions are generating right now.

I think you said in the prepared remarks, 13-1 is where you're at currently. And then the pricing power that should afford you at some point. How far away do you think we are from you being able to get more aggressive with pricing? And then maybe what are your thoughts around how you actually operationalize or how you actually do that?

William Febbo -- Chief Executive Officer

Yeah, I'll start, and then I'll ask Steve to kick in. But our clients are very sophisticated at procurement, right? It's not like it's a resin and you could just increase at 1% or 2%. These are technologies and digital services that are new. And what you really need to do is prove your value with your ROI and then keep adding value, right? Just because you were great last year doesn't mean just do the same thing over and over.

You have to continue to innovate in that value. So our goal, as we saw with adding RWD to what was a preexisting type of message is we could bring that at a higher value to the client. And therefore, it's not deemed a price increase, it's just an additional service. So we're really focused on that.

It's how you innovate and get away from a transaction mentality, which a lot of I think the market has, and we want to stay more on that high value, high touch, high ROI. But Steve, maybe you can chip in a little there.

Steve Silvestro -- Chief Commercial Officer

I think you nailed it, Will. In addition to that, Sean, I think as we continue to migrate into that specialty area and looking at harder-to-find patients and trying to access those and communicate with those physicians that are treating those cohorts of patients, the value volume discussion comes into play. And so where volume of patients may be lower, the capture is much more valuable. And so we've got additional pricing power in those areas.

So it's sort of that one, two punch of commercialization of new technologies that allow us some margin expansion in that regard and looking for very hard to find patients that now the technology stack that we've built that underpins all of these efforts gives us the luxury of being able to say, hey, we can find patients in the healthcare deserts of the Midwest. We can plan the physicians that are treating and we can communicate at relevant points of time when the patient is with the physician.

Sean Dodge -- RBC Capital Markets -- Analyst

OK. That's helpful. Thanks again.

William Febbo -- Chief Executive Officer

Thanks, Sean.

Operator

And we'll move to our next question from Marc Wiesenberg of B. Riley Securities.

Marc Wiesenberger -- B. Riley Securities -- Analyst

Thank you. Good afternoon. I'm wondering if you could talk about the buy-up activity in the fourth quarter relative to the fourth quarter of 2020. And do you get a sense going forward that 2020 was an anomaly and this past fourth quarter will be more representative of future periods? And then also, given that we understand your contracts, you're usually structured on an annual basis, what percentage of your customers last year made intra-year changes to contracts, either up or down? And I guess as your offerings evolve, is that something we should expect to see move around more?

William Febbo -- Chief Executive Officer

Hey, Marc, good question. So I believe -- well, we talked about this a little bit back in the Q3 call. But obviously, going into 2020, our clients have no idea what was coming, right? So you had massive disruption spend and therefore, outsized potential of buy-up, probably unprecedented buy-up for Q4 of 2020. Coming into '21, they knew the disruption and assumed it would be all year just given that we're in the healthcare space, and they are closely monitoring hospitals and patients and doctors.

So yes, I would say that was the main reason. And frankly, we don't budget or plan around buy-ups. I've said that a couple of times. It can happen if it does.

If you're a company like ours, you can execute on those buy-up dollars. That being said, we obviously saw that net revenue retention to grow. We saw really steady climb through the year. And we anticipate that in '22 as well.

But I do think the digital shift makes the spend more efficient. They really do get more of their money. And I'd like to maybe have Ed comment a little bit on that because he came over from one of the pharmaceutical companies just from his perspective. But I would see it just moving out over time just because of the efficiency around digital spend.

Ed?

Ed Stelmakh -- Chief Financial Officer and Chief Operating Officer

Yeah. Thanks, Will. Hey, Marc, thanks for the question. Just to kind of round off what Will was saying.

So back in Q4 of 2020, our buy-ups amounted probably to about $4 million, $4.5 million, and we certainly saw that drop quite a bit in Q4 of this year. Just back to what Will said, I think pharma companies were much better prepared for what was in front of them in 2021. As far as what that means for '22 and beyond, I think this new model is now starting to solidify itself as the new normal, kind of the hybrid model of using digital and using technologies to supplement the traditional model of sales force engagement with HCPs. It seems to be sort of the new normal.

And that's basically what we're bidding on. So hopefully, that helps you.

Marc Wiesenberger -- B. Riley Securities -- Analyst

It does. I appreciate it. But if you could also just specifically touch on kind of the intra-year changes to contracts and is that something that maybe could flex up based on the efficiency and kind of speed in how digital can be allocated?

William Febbo -- Chief Executive Officer

Yeah. Obviously, we saw a big increase in brand count last year, which was people we maybe hadn't worked with before coming in and testing. And as we've said, our client, they trust to verify and build the relationship. They're not an all-in kind of entrant.

So we do see six-month contracts. We see 12-month contracts. Really, it depends on the ROI that's going to be driving whether there's an increase in our year. I can't give you percentages of a breakdown on midyear versus 12.

But obviously, our net revenue retention speaks to growth within our current client base. And I would expect we'd anticipate that to continue. As a matter of fact, there might be a chance for upside given so many people came into the platform last year, and a lot of that measurement has now happened. So I'm pretty encouraged by the last year momentum into this year thus far.

Marc Wiesenberger -- B. Riley Securities -- Analyst

Very helpful. I know that you're providing total NRR, but could you talk about that for your top five and top 10 customers?

William Febbo -- Chief Executive Officer

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

Ed Stelmakh -- Chief Financial Officer and Chief Operating Officer

Yeah, sure. Yeah. So as you know, I'm sure, Marc, large pharma companies have lots of affiliates. So the way we look at NRR, in our case, is to really home in on the parent companies.

So if you look at the top five at the parent level, that's 127% number that you saw for the total top 20 becomes about 142%. And if you spend it out to parent plus affiliate, we're in the 160s. But our plan is to really stay consistent to the parent company level just to be basically on an apples-to-apple basis going forward.

Marc Wiesenberger -- B. Riley Securities -- Analyst

Understood. Can you talk about or quantify, I guess, the percent of revenue that comes directly from pharma relationships versus through agencies? And I guess as your engagement with direct pharma kind of increases, moves up the food chain, do you have a sense of how much your customers' current digital marketing spend is allocated toward point-of-care initiatives? And I guess maybe ultimately where that percentage could move over time?

William Febbo -- Chief Executive Officer

Steve, do you want to start with that one?

Steve Silvestro -- Chief Commercial Officer

Yeah, happy to. It's a fantastic question. In terms of what the percentages of the actual budget that's moving toward digital, I think it's a little bit of a moving target. I mean, you've seen several announcements throughout the last sort of quarter of last year and even the first quarter of this year by large manufacturers that are scaling back on face-to-face commercial resources, so sales people there in the office.

And some of those dollars, a lot of those dollars, are being redeployed and repositioned in digital ways. A good portion of that is point of care. I think that will continue to be the case because we need to be able to communicate with a physician when a prescribing decision is being contemplated. Still early to tell how much of it will be deployed against point of care, but I would say it's probably a good portion of it.

So sort of more to come on that.

William Febbo -- Chief Executive Officer

Yeah. And I would just add that I could chip in on the question around agency versus direct. Marc, as you've heard from others who sell to pharma, pharma relies pretty heavily on agencies for a couple of things. One is just screening new entrants with really great solutions that just haven't proven themselves yet.

They also do a lot of the content generation, which we do not do any of. And so they really act as service or consulting businesses to the pharma. So it doesn't matter if you have a direct or indirect, you absolutely will deal with agencies if you're doing anything on marketing side of pharma. That being said, what we found is since last year and clearly a top-down [Inaudible] to digital enablement to reach doctors and patients, there's just a higher level of involvement which generally means you get more direct relationships.

And you have to remember, OptimizeRx is not a website. It's not a place doctors have to go to. It's where they work. It's their day to day, six hours a day.

And so it's a business. And I think you just get a different level of seriousness from the client when it's that way. Now that's good and bad. Good in that it's serious, and you get more exposure.

Bad, it just takes a little longer to make sure everyone is OK with it because it's so serious. And so I would say we will trend toward more direct relationships, but we will always work with the agencies just like partners because they're essential to the ecosphere.

Marc Wiesenberger -- B. Riley Securities -- Analyst

Very helpful color there. And then just a final question from me. I think it's been long understood that certain EHR platforms have different interoperability standards relative to others. And with the recent Oracle Cerner deal, how do you expect the policies to change, if at all? And what impact could that have on your business in the near and medium term? Thank you.

William Febbo -- Chief Executive Officer

Sure. Thanks, Marc. That is a big question, and we are not in EHR, so probably not the best qualified to opine on it. But I would say if I think of it from the doctors' and the patients' perspective, you've got a lot of pressure on having a good user interface today.

And I think the companies that employ the tools that doctors and patients want in a digital way where it's not painful to look at and it doesn't take too many clicks or all this user interface we're getting used to. I think those are going to be real winners. What happens with Cerner Oracle, that's hard for me to know. But I do think it's positive.

I think it puts more tech energy into the ecosphere, and I do think consumerism is going to drive the need to have access to everything, all your data, whenever you want it. So we shall see.

Marc Wiesenberger -- B. Riley Securities -- Analyst

Great. Thank you very much.

William Febbo -- Chief Executive Officer

Thanks, Marc.

Operator

We'll move on to our next question from Eric Martinuzzi of Lake Street.

Eric Martinuzzi -- Lake Street Advisors -- Analyst

Hey, guys. I had a question. I really want to focus a couple of questions on the profitability of the business. I know you didn't give guidance for adjusted EBITDA, but you kind of leaned that way a little bit in one of your prior responses, Will, talking about the profitability of Q4, and I believe that that's repeatable.

My mind immediately goes into something simple like Q4 $20 million revenue, $4 million adjusted EBITDA. They just gave guidance for $80 million for this year, 20% EBITDA margins on that. Is that an oversimplification? Is that what you were implying by the comment regarding Q4 profitability?

William Febbo -- Chief Executive Officer

That's why I love you, Eric, you hold us accountable. Actually, it goes back further. Eric's been with us a long time, first analyst to cover on us, I'll call out. So you remember, Eric, when we were talking and trying to tell everyone about our story, the aspirational $100 million run rate with 25% to 35% EBITDA.

That hasn't changed. And I think we're just building more and more credibility toward it, right? So the reason why we don't include such granular guidance is because we also are early stage. And I know the investors trust us to invest if we see we need to. And we get that back.

But now I still feel very good about our profile. It's very important. It's interesting. Obviously, the market is valuing it very highly right now, and we've always valued it highly.

So having those two come together is going to be, I think, good for us as a company.

Eric Martinuzzi -- Lake Street Advisors -- Analyst

OK. No, and I realize that the danger of getting into the guidance game is the -- you give them lots of cookies, they want a glass of milk, but I certainly appreciate the transparency here. As we look out to -- as we look at the cash on the balance sheet, and I'm setting aside kind of opportunistic M&A, but what is the thinking on where that cash is by year-end? Would you go down a path of potentially using it for share repurchases? Would you double up on product investments, again, aside from opportunistic M&A?

William Febbo -- Chief Executive Officer

Yeah. We've really ruled out -- we're not at the stage of buying back equity. I don't think our investors want to do that. They want us to invest.

If you talk about a big TAM and a lot of white space, that means you keep investing forward. Maybe we'll get there someday. But we actually, last year, set out a pretty aggressive plan to invest in ourselves for this year, particularly with our channel partners where part of the -- part of what the pandemic did for physicians and patients, it just enabled them digitally to look at tools to -- you're a physician running your practice and deliver care, if you're a patient, just everything from savings to adherence to telehealth. And we're really going to work hard with our partners to make sure all of our tools get to every doctor.

And so that's where we would be investing if we do. Obviously, M&A, as you said, is opportunistic.

Eric Martinuzzi -- Lake Street Advisors -- Analyst

And that -- is that more of a people or is that more of an incentives dollar?

William Febbo -- Chief Executive Officer

It's -- yeah. No, it's more tech and incentive, not people.

Eric Martinuzzi -- Lake Street Advisors -- Analyst

OK. Thanks for taking my question.

William Febbo -- Chief Executive Officer

Thanks, Eric.

Operator

We'll go to our next question from Harvey Poppel of Poptech Capital LLP.

Harvey Poppel -- Poptech Capital -- Analyst

Yes. Will, another sensational quarter. I sound like a broken record, but a very positive broken record. I'd like to keep sounding like that.

The question I have is to focus on the channels. Your channel of delivery is primarily through EHR, as it always has been. And I don't hear too much mention. You did answer one of the questions about Oracle acquisition of Cerner.

But when you talk about the EHRs and specialty, are you at all constrained as you move into these specialties? I know some of them are very fragmented with a lot of tiny, tiny EHRs and no dominant EHRs. Do you run into that as a gating factor in your ability to generate more revenue even if you have the brands and the pharma and everything else?

William Febbo -- Chief Executive Officer

Yeah. Thanks, Harvey. Keep the record broken. It's good.

So we -- about two years ago, we really set out as an initiative to increase our access to the ologies, as I've said, mostly oncology and cardiology. And I'm really happy to report we've increased both by an exponential amount. And to your point, they are fragmented, but there are ways to get to them. And I can tell you, we figured it out, and we do it in a way that's incredibly smooth to the HCP.

And so, no, we do not have any bottlenecks in any therapeutic areas today. And we do still anticipate half of our attention to be focused on those specialty medications. We had -- the biggest increase last year was just access to oncology. It's sensational.

The team did a great job, and I want to call them out because that's material for this company. And so to date, no bottlenecks.

Harvey Poppel -- Poptech Capital -- Analyst

Great. That's it for me. Thanks a lot, Will.

William Febbo -- Chief Executive Officer

Thanks, Harvey.

Operator

And with no other questions in the queue, I will now turn the call back to Will Febbo for final comments.

William Febbo -- Chief Executive Officer

Terrific. Thank you. We're really proud of the quarter. Questions were terrific.

We look forward to talking to the investors over the next couple of weeks, really focusing in on the KPIs. What we found so far is having those KPIs really allows us to talk more about the business than the numbers because we've given guidance for the year. So hats off to the team for being able to do it and have that kind of visibility with our clients. And culture is a big deal at OptimizeRx and we continue to just create a great place to work with a lot of value to the clients and, ultimately, the investors.

So thanks, everyone, for your time, and we look forward to talking to you again next quarter.

Operator

And all right. Thank you, sir. And before we conclude today's call, I'd 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 27A in the Securities Act of 1933 and Section 21E of the Securities Act of 1934 as amended.

These forward-looking statements should not be used to make investment decisions. The words anticipate, estimate, expect, possible and seeking and similar expressions identify forward-looking statements. They may speak only to the date that such statements are made. Such forward-looking statements in this call include statements regarding the estimation of total addressable market size, market penetration, revenue growth, gross margin, operating expenses, profitability, cash flow, technology, investments, growth opportunities, acquisitions, upcoming announcements and the need for raising additional capital.

They also include the management's expectations for the rest of the year and adoption of the company's digital health platform. 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 and contemplated by or underlying these forward-looking statements.

The risks and uncertainties to which forward-looking statements are subject to, include, but are not limited to, the effect of government regulations, competition and other material risks. Risks and uncertainties to which forward-looking statements are subject to could affect business and financial results included in the company's annual report on Form 10-Q for the quarter ended March 31, 2021. This form is available on the company's website and on the SEC website at sec.gov.

Duration: 48 minutes

Call participants:

William Febbo -- Chief Executive Officer

Ed Stelmakh -- Chief Financial Officer and Chief Operating Officer

Ryan Daniels -- William Blair -- Analyst

Steve Silvestro -- Chief Commercial Officer

Sean Dodge -- RBC Capital Markets -- Analyst

Marc Wiesenberger -- B. Riley Securities -- Analyst

Eric Martinuzzi -- Lake Street Advisors -- Analyst

Harvey Poppel -- Poptech Capital -- Analyst

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