OptimizeRx (NASDAQ:OPRX) lowered its 2026 revenue outlook after third-quarter sales fell 17%, even as cost reductions and a favorable product mix helped the healthcare marketing technology company increase profitability.
The company now expects full-year revenue of $87 million to $93 million, while maintaining its adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, forecast of $21 million to $25 million. Management said customer spending delays and limited visibility into additional fourth-quarter purchases prompted the revenue revision.
Third-quarter revenue was $21.6 million, down from $26.1 million a year earlier. Adjusted EBITDA rose to $6.3 million from $5.1 million, with the adjusted EBITDA margin increasing to approximately 29% from 20%. Both revenue and adjusted EBITDA exceeded consensus expectations, Chief Executive Officer Stephen Silvestro said.
Customer spending weighs on outlook
Contracted revenue for 2026 continued to track approximately 20% below the comparable prior-year level, leaving more business to secure and recognize in the fourth quarter than the company previously anticipated. Chief Financial and Strategy Officer Ed Stelmakh said that increased the execution risk associated with the revised outlook.
Chief Business Officer Andy D’Silva said the company had contracted a little over 90% of the revenue needed to reach the midpoint of its full-year guidance. At the same point in the preceding two years, he said, the figure was closer to the mid-90% range.
Silvestro said the company had expected more additional purchases from customers heading into the fourth quarter but had not seen the anticipated activity. He said management believed there was pent-up demand, though it remained uncertain whether the company could contract, deliver and recognize that business before year-end.
One previously displaced top-five customer resumed spending in the fourth quarter after generating no revenue for OptimizeRx during the first nine months of 2026. The customer accounted for roughly 10% of revenue last year, D’Silva said. Silvestro said its spending had not returned to historical levels.
Net revenue retention fell to 83%, which Stelmakh attributed primarily to reduced spending by a small number of large accounts rather than broad-based customer losses. He said the measure was probably at a trough and could begin improving as the company enters 2027, depending on fourth-quarter results.
Margins improve despite lower sales
Stelmakh attributed the revenue decline in part to reduced spending by large customers, including users of lower-margin managed services, as well as budget pressure and delays related to broader market conditions, including uncertainty around most-favored-nation drug pricing.
Quarterly expenses fell by $5.1 million from a year earlier to $18.9 million, including $700,000 in severance costs. Lower costs of revenue and compensation contributed to the decline. Stelmakh said a favorable product and channel mix, including a significant reduction in direct-to-consumer managed services revenue, also supported margins. The company expects a full-year gross margin in the low 70% range.
Net income rose to $1.2 million, or $0.06 per diluted share, from $800,000, or $0.04 per diluted share, a year earlier. Non-GAAP net income was $3.8 million, or $0.20 per diluted share, compared with $3.1 million, or $0.16 per diluted share.
OptimizeRx generated $12.9 million in operating cash flow during the first nine months and ended September with $22.3 million in cash. It reduced debt to $13.4 million at quarter-end and paid off another $3 million after the quarter closed. Stelmakh said the company intended to continue paying down debt while executing its share repurchase program and expected more buyback activity in the fourth quarter.
Early 2027 bookings and partnerships
Silvestro said contracted revenue for 2027 was running about 20% ahead of the comparable point in the prior request-for-proposal season. He cautioned that it was still early and declined to provide a 2027 growth forecast. Stelmakh noted that the comparison covered only a few weeks of the new selling season, unlike the 2026 comparison, which reflected three quarters of activity.
The company has also opened its electronic health record network to programmatic ad buying through DeepIntent, The Trade Desk and PulsePoint. Silvestro estimated the three demand-side platforms represent 60% to 70% of volume in the relevant space, but said revenue generation from the partnerships remained in its early stages.
OptimizeRx expects its inventory to become available to PulsePoint advertisers throughout November. It also expanded its Natural Language Audience Builder to support direct-to-consumer audiences alongside healthcare-provider audiences, management said.
On leadership, Stelmakh will remain chief financial and strategy officer through the end of 2026. D’Silva is set to become chief financial officer on January 1, 2027, while Corporate Controller Heather Favazza will become chief accounting officer.
About OptimizeRx (NASDAQ:OPRX)
OptimizeRx Corporation (NASDAQ: OPRX) is a digital health and life sciences technology company that helps pharmaceutical and biotechnology companies connect with healthcare professionals and patients. Its platform supports prescription-related communications, treatment access, affordability, adherence and patient engagement throughout the medication journey. The company provides solutions that can be integrated into electronic health records and other healthcare workflows. Its offerings include point-of-care messaging for healthcare professionals, patient support and savings programs, medication access tools, and data and analytics services designed to help life sciences companies communicate with relevant audiences and understand engagement.
