OPRX Delivers Solid Q1 Earnings: But Can It Sustain the Momentum?

OptimizeRx OPRX delivered solid first-quarter 2025 results, with revenues rising 11% year over year to $21.9 million and adjusted EBITDA improving to $1.5 million. But beyond these financials, the company’s momentum increasingly hinges on the performance and adoption of its proprietary digital health tools — particularly its DAAP (Dynamic Audience Activation Platform) and related data-driven solutions.

At the heart of OPRX’s strategy is a robust omnichannel technology platform designed to enhance engagement at both the healthcare provider (HCP) and direct-to-consumer (DTC) levels. DAAP enables real-time patient identification through micro-neighborhood targeting and point-of-care integrations, empowering pharma clients to deliver precision messaging that can improve script lift and reduce abandonment. The company claims an ROI exceeding 10:1 and 25% script lift on active programs — a solid proof of value for pharmaceutical brands seeking greater commercial efficiency.

A key development is OPRX’s pivot toward a subscription-based revenue model. In just one quarter, over 5% of projected annual revenues have already transitioned to subscriptions. These contracts — centered on data assets like DAAP and legacy Medicx audience segments — are highly scalable, offering higher margins and greater revenue visibility. While currently structured as one-year evergreen deals, their conversion into multi-year contracts would further strengthen recurring revenue streams.

Yet, risks persist. The digital health space remains crowded and competitive, and while current client engagement levels remain robust, future federal regulatory shifts and macroeconomic constraints on pharma marketing budgets could dampen long-term momentum. Moreover, OPRX’s margin mix remains vulnerable to variations in managed service volumes, especially in DTC, where gross margin compression was noted during the first quarter.

Still, OPRX’s tech stack, strategic positioning and growing data capabilities appear well aligned with pharma’s evolving commercialization needs. If the company can continue to grow its subscription base and enhance gross margin mix, it may indeed sustain its first-quarter momentum through the year.

Peer Performance

Health Catalyst HCAT posted first-quarter 2025 revenues of $79.4 million, which rose 6.3% year over year and beat expectations. Adjusted EBITDA loss narrowed to $6.3 million and the company reaffirmed its 2025 guidance. The Technology segment, key to customer retention, grew 10%, supported by long-term contracts and high renewal rates. New wins and expansion within existing accounts drove bookings, while SaaS revenues showed steady contribution. Management emphasized continued focus on profitability, innovation in data operating systems and early traction from GenAI integration. Despite macro pressures, HCAT's strong visibility — anchored in multi-year SaaS and services contracts — positions it for sustained growth and potential margin expansion by late 2025.

HealthStream HSTM reported first-quarter 2025 revenues of $73.5 million, up just 1% year over year, and EPS of 14 cents, which missed estimates by 3 cents. Adjusted EBITDA declined 5% as macro headwinds and customer hesitancy delayed medium-sized deal closures.

However, a record $14 million multi-year deal and strong growth in core SaaS products — CredentialStream (+25%), ShiftWizard (+19%) and Competency Suite (+12%) — highlight solid underlying momentum. While legacy product attrition continues to pressure the top line, the company’s 96% subscription revenue base and robust implementation backlog offer medium-term visibility. Management expects stronger revenue contributions in the second half of 2025 as implementation catch-up drives conversions and workforce optimization demand rebounds.

OPRX’s Price Performance, Valuation and Estimates

Shares of OptimizeRx have surged 186.9% year to date compared with the industry’s growth of 18.3%.

OPRX’s forward 12-month P/S of 2.32X is lower than the industry’s average of 8.88X, and also lower than its five-year median of 3.56X. However, it carries a Value Scoreof F.

The Zacks Consensus Estimate for OPRX’s 2025 earnings per share suggests a 63.6% improvement from the 2024 level.

OptimizeRx stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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