Executive Summary

Beat-and-raise quarter: Revenue grew 55% YoY to $29.2M, Non-GAAP diluted EPS was $0.24, and Adjusted EBITDA reached $5.8M; management raised FY25 guidance to $104–$108M revenue and $14.5–$17.5M Adjusted EBITDA, citing strong contracted revenue and operating leverage . Versus S&P Global consensus, revenue beat by ~31% ($29.20M vs $22.26M*) and EPS handily exceeded $0.02* with $0.24 .
Operating leverage and cash discipline: Gross margin expanded to 63.8% (from 62.2% y/y and 60.9% in Q1); OpEx stayed flat y/y, GAAP net income swung to $1.5M; company paid down $4.5M of term loan principal (>$4M above schedule) and plans to accelerate deleveraging .
Demand drivers and mix: Contracted revenue up >30% y/y; DAAP/Micro‑Neighborhood Targeting continue to scale; managed services provided one-time upside in H1 but not expected to persist in H2; mid/small pharma growth outpaced top‑20, reducing concentration to 59% .
Near-term catalysts: Clear “beat + guidance raise,” accelerating KPI trends (NRR 121%, revenue/FTE $767k), and go-to-market expansions (e.g., Simulmedia TV partnership for MNT) support estimate revisions and narrative momentum .

What Went Well and What Went Wrong

What Went Well

Outsized beat vs consensus and stronger profitability: Q2 revenue $29.2M vs $22.3M* consensus; Primary EPS $0.24 vs ~$0.02*; gross margin expanded to 63.8%; Adjusted EBITDA $5.8M vs $0.5M y/y .
“Overall, we had a strong 2025 with results ahead of both consensus estimates and our internal expectations.” — CEO .
Guidance raised with healthy visibility: FY25 revenue raised to $104–$108M and Adjusted EBITDA to $14.5–$17.5M; management also “comfortable” with 2026 consensus and highlighted contracted revenue up >30% y/y .
Balance sheet and cash generation: $8.4M YTD operating cash flow; $16.6M cash; $4.5M principal repayment in Q2, with intention to accelerate paydown .

What Went Wrong

Managed services non-recurring contribution: H1 included elevated managed services revenue that management does not expect to continue into H2, creating some risk to extrapolating H1 run-rate .
Concentration improvement reflects mix shift to smaller logos: Share of revenue from top-20 pharma declined to 59% (from 66%), reflecting faster growth below top-20; while strategically positive, it may require continued sales enablement and support intensity .
GAAP profitability still modest: GAAP diluted EPS was $0.08; the substantial outperformance versus consensus reflects non-GAAP adjustments and mix, emphasizing the importance of executing toward sustained GAAP margin expansion .

Financial Results

Core P&L and Margins (YoY and Seq)

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($)	$18.812M	$21.928M	$29.195M
Gross Profit ($)	$11.704M	$13.344M	$18.635M
Gross Margin (%)	62.2%	60.9%	63.8%
Operating Income ($)	$(3.749)M	$(2.114)M	$3.189M
GAAP Net Income ($)	$(4.008)M	$(2.199)M	$1.532M
GAAP Diluted EPS ($)	$(0.22)	$(0.12)	$0.08
Adjusted EBITDA ($)	$0.468M	$1.489M	$5.751M
Non-GAAP Diluted EPS ($)	$0.02	$0.08	$0.24

Notes: Non-GAAP figures reconcile to GAAP by adding back D&A, stock-based comp, debt issuance amortization, and other non-recurring items (e.g., severance, activist and search fees) .

Versus S&P Global Consensus (Q2 2025)

Metric	Consensus*	Actual	Surprise
Revenue ($)	$22.26M*	$29.20M	+31%
Primary EPS ($)	$0.02*	$0.24	Large beat
EBITDA ($)	$1.31M*	$4.13M*	Large beat

Footnote: *Values retrieved from S&P Global.

Company-reported Adjusted EBITDA was $5.75M, which differs from S&P Global “EBITDA” definition .

KPIs (Rolling 12 Months)

KPI	R12M Ended Mar 31, 2025	R12M Ended Jun 30, 2025
Avg revenue per top-20 pharma manufacturer	$2.960M	$3.082M
% of revenue from top-20	63%	59%
Net Revenue Retention	114%	121%
Revenue per avg FTE	$710k	$767k

Segment breakdown: Management treats DTC and HCP holistically and does not disclose segment revenue splits; DAP/audience subscription momentum continues but is not broken out in dollars .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$101–$106M	$104–$108M	Raised
Adjusted EBITDA	FY 2025	$13–$15M	$14.5–$17.5M	Raised

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 & Q1’25)	Current Period (Q2’25)	Trend
AI/Tech (DAAP, MNT), subscription shift	48 DAAP deals in 2024; plan to transition to subscription model . Early 2025: >5% of projected sales on subscription .	Pipeline visibility to ~10% subscription by year-end (if pipeline converts) .	Accelerating subscription adoption.
Macro/regulatory	“Not seeing significant headwinds; clients leaning into digital” .	Pharma focused on efficient revenue lift; no pull-forward; continued engagement earlier for H2 plans .	Constructive; preference for ROI-heavy digital.
Product/mix (DTC/HCP)	Q1 gross margin diluted by DTC managed services mix; sequential step-up expected in Q2 .	H1 uplift from managed services; not expected to persist in H2 .	One-time H1 tailwind; normalize in H2.
Customer mix & concentration	Top-20 at 63% of revenue in R12M to Q1; ARPU rising .	Top-20 share fell to 59%; mid/small caps accelerating; top-5 ARPU >$11M avg .	Broader base; deeper top-5.
Margins & OpEx leverage	Q1 GM 60.9%; OpEx down y/y from cost actions .	GM 63.8%; OpEx flat y/y despite 55% revenue growth; run-rate stable H2 .	Improving operating leverage.

Management Commentary

“We are increasing our guidance for the year… revenue between $104M and $108M with adjusted EBITDA between $14.5M and $17.5M.” — CEO .
“Gross margin… increased from 62.2%… to 63.8%… OpEx… essentially flat year over year… Net income of $1.5M or $0.08 per share.” — CFO .
“We paid down $4.5M of principal… $4.0M above our debt payment schedule… intend on paying down our debt at an accelerated rate.” — CEO/CFO .
“Contracted revenue continues to increase to more than 30% year over year… comfortable with consensus 2026 revenue and adjusted EBITDA projections.” — CEO .

Q&A Highlights

Managed services uplift is episodic: H1 included above-expected managed services (3–6 month nature), not assumed for H2 guidance .
OpEx discipline and leverage: OpEx expected to remain roughly flat H2; accruals reflect bonus/variable comp; business can scale to ~$150M with similar headcount (investments mostly capitalized) .
Mix and customer dynamics: Faster growth below top-20 pharma reduced concentration; top-5 ARPU >$11M; broad-based contracted revenue ramp .
Subscription transition: Still ~5% of revenue; pipeline implies potential ~10% for 2025 if conversions land .
Visibility: Contracted revenue >30% y/y; improved Q4 visibility underpinning guidance raise; no signs of pull-forward .

Estimates Context

Q2 2025 vs consensus: Revenue $29.20M vs $22.26M*; Primary EPS $0.24 vs ~$0.02*; EBITDA $4.13M* vs $1.31M*; company Adjusted EBITDA was $5.75M .
FY 2025 consensus revenue $108.11M* vs company guidance $104–$108M; FY 2026 revenue consensus $121.63M*, with management indicating comfort with 2026 consensus trajectory .
Footnote: *Values retrieved from S&P Global.

Where estimates may adjust: Sell-side likely moves revenue and EBITDA higher given the magnitude of the beat, raised guidance, and commentary on operating leverage and visibility .

Key Takeaways for Investors

Beat-and-raise magnitude supports positive estimate revisions: outsized revenue and EPS beats, guidance raised on both revenue and Adjusted EBITDA .
Operating leverage is materializing: GM to 63.8% and flat OpEx y/y drove a swing to GAAP profitability; management sees stable OpEx into H2 .
Quality of backlog and visibility improved: contracted revenue >30% y/y; comfort with 2026 consensus indicates multiyear confidence .
Mix normalization: H1 managed services will not repeat in H2; focus remains on higher-margin, subscription-oriented DAAP/audiences .
Diversification tailwind: Lower top‑20 concentration plus mid/small pharma uptake widen TAM and reduce dependency risk .
Cash generation enables deleveraging: $4.5M principal repaid (above schedule); accelerating paydown reduces interest drag and risk .
Strategic partnerships extend reach: Simulmedia partnership brings MNT precision to linear/CTV, enhancing omnichannel differentiation .

Appendix: Additional Data Points and Reconciliations

Non-GAAP net income in Q2: $4.494M vs GAAP net income $1.532M; adjustments include D&A ($1.074M), stock-based comp ($1.488M), amortization of debt issuance costs ($0.437M), and other items .
Cash and cash equivalents: $16.6M as of 6/30/25; operating cash flow for the first six months $8.4M .
KPI evolution: NRR 114% → 121%; revenue/FTE $710k → $767k from Q1 to Q2 R12M .

References:

Q2 2025 8‑K and press release with full financials and guidance raise .
Q2 2025 earnings call transcript for management commentary and Q&A .
Q1 2025 press release and 8‑K for prior-quarter comps and guidance baseline .
Q4 2024 press release for historical context and DAAP momentum .
Additional relevant press releases (e.g., Simulmedia MNT partnership) .
Consensus estimates from S&P Global denoted with an asterisk (*).

OptimizeRx Corp (OPRX)·Q2 2025 Earnings Summary