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Management attributes current revenue softness to short-to-intermediate term disruption from 'Most Favored Nation' pricing dynamics and macroeconomic factors impacting pharma budgets.

Performance was impacted by a specific large client account where management acknowledged execution failures and internal client turnover, though a recovery plan is now in place.

The AI-enabled Dynamic Audience Activation Platform (DAAP) grew 60% in Q1, signaling strong product-market fit and a strategic shift toward data-driven engagement.

Strategic expansion into the medtech sector and mid-tier life science companies is providing new growth vectors beyond the traditional top 20 pharmaceutical manufacturers.

Management is intentionally shifting the revenue mix toward subscription-based models, with DAAP subscription revenue increasing 45% to improve financial predictability.

Operational efficiency improved through 'Agentic' technology tools and a largely fixed-cost platform, leading to a narrowed GAAP net loss despite lower top-line revenue.

The company is evolving into a supply-side platform by enabling demand-side platforms (DSPs) to connect directly to its proprietary EHR network, targeting 80% of digital promotional dollars.

Full-year 2026 revenue guidance was lowered to $95 million - $100 million due to reduced visibility and cautious budget allocations from pharmaceutical clients.

Adjusted EBITDA guidance of $21 million - $25 million remains unchanged, supported by $3 million in annualized cost-optimization initiatives and high-60% gross margins.

Revenue is expected to be heavily weighted toward the second half of the year, following a projected 40/60 split between the first and second halves.

Management anticipates the new programmatic DSP access will begin contributing to revenue in Q4 2026, with significant scaling expected during the 2027 renewal cycle.

The company expects to lower annual interest expense by approximately $1.5 million following the refinancing of its term loan with Fifth Third Bank.

Contracted revenue is currently 15% to 20% behind prior-year levels, primarily due to shorter contract durations rather than a loss of clients.

The company successfully exited low-margin managed services, resulting in zero revenue from this segment in Q1 as part of a margin-optimization strategy.

A major client disruption remains a headwind for the next three quarters, though management believes the issue is contained to the 2026 fiscal year.

Inventory utilization for traditional HCP marketing is currently below 10%, representing a significant untapped capacity for the new programmatic channel.

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Management cited 'asynchronous disruption' at one specific large client involving agency changes and internal turnover as a primary factor for the more conservative outlook.

While some clients have returned with stronger spend, the shorter duration of new contracts has reduced overall visibility into the back half of the year.

The gap is largely mechanical, driven by customers moving from 12-month commitments to shorter, rolling renewals that do not yet sit in the formal backlog.

Management noted that despite shorter durations, renewal flow remains steady and several accounts have accelerated spend since the previous earnings call.

The integration allows agencies to buy OptimizeRx inventory through their preferred programmatic workflows, which currently control the vast majority of digital media spend.

Management declined to provide specific revenue projections but noted they are the first to offer this EHR network access at scale, with revenue expected to start flowing in Q4.