GoodRx Reports Fourth Quarter and Full Year 2023 Results

GoodRx Reports Fourth Quarter and Full Year 2023 Results




GoodRx Reports Fourth Quarter and Full Year 2023 Results

SANTA MONICA, Calif.–(BUSINESS WIRE)–GoodRx Holdings, Inc. (Nasdaq: GDRX) (“GoodRx” or the “Company”), the leading destination for prescription savings in the U.S., has released its financial results for the fourth quarter and full year 2023, which are consistent with its preliminary results announced on January 10, 2024.


Fourth Quarter 2023 Highlights

  • Revenue1 and Adjusted Revenue1,2 of $196.6 million
  • Net loss of $25.9 million; Net loss margin of 13.2%
  • Adjusted Net Income2 of $31.1 million; Adjusted Net Income Margin2 of 15.8%
  • Adjusted EBITDA2 of $57.3 million; Adjusted EBITDA Margin2 of 29.1%
  • Net cash provided by operating activities of $15.9 million
  • Exited the quarter with over 7 million consumers of prescription-related offerings3

Full Year 2023 Highlights

  • Revenue1 of $750.3 million
  • Adjusted Revenue1,2 of $760.3 million
  • Net loss of $8.9 million; Net loss margin of 1.2%
  • Adjusted Net Income2 of $114.6 million; Adjusted Net Income Margin2 of 15.1%
  • Adjusted EBITDA2 of $217.4 million; Adjusted EBITDA Margin2 of 28.6%
  • Net cash provided by operating activities of $138.3 million
  • Over 750,000 unique healthcare providers (HCPs) visit GoodRx annually4

“We’ve locked in on creating value for consumers and ended the year strong building on our third quarter progress with accelerating momentum in the business, both financially and operationally, in the fourth quarter,” said Scott Wagner, Interim Chief Executive Officer. “We’ve been ruthlessly focused on driving prescription-savings events by leaning into our deep relationships with retail partners, bringing the fundamental benefit of GoodRx to commercial plans through our integrated savings program and bringing savings to brand drugs through our pharma manufacturer solutions offering. These all reinforce our value proposition and are expected to continue driving topline growth in the first quarter and the full year 2024.”

1

 

Revenue in the third quarter 2023 was impacted by a $10.0 million client contract termination payment, which was recognized as a reduction of revenue, in connection with our plan to de-prioritize certain solutions under our pharma manufacturer solutions offering approved by our board of directors on August 7, 2023 (the “Restructuring Plan”). Revenue excluding the $10.0 million client contract termination payment represents Adjusted Revenue for the third quarter and full year 2023. For all other periods, revenue equals Adjusted Revenue.

2

 

Adjusted Revenue and metrics presented as a percentage of Adjusted Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Net Income Margin, and adjusted costs and operating expenses are non-GAAP financial measures and are presented for supplemental informational purposes only. For the periods presented, Adjusted EBITDA Margin and Adjusted Net Income Margin are defined as Adjusted EBITDA and Adjusted Net Income, respectively, divided by Adjusted Revenue. Refer to the Non-GAAP Financial Measures section below for definitions, additional information, and reconciliations to the most directly comparable GAAP measures.

3

 

Sum of Monthly Active Consumers (MACs) for Q4’23 and subscribers to our subscription plans as of December 31, 2023. Refer to Key Operating Metrics below for definitions of Monthly Active Consumers and subscription plans.

4

 

Based on internal data on unique HCP visits to GoodRx for the year ended December 31, 2023. A unique HCP who visits GoodRx more than once during a given year is only counted as one unique HCP in that year.

Fourth Quarter 2023 Financial Overview (all comparisons are made to the same period of the prior year unless otherwise noted):

Revenue and Adjusted Revenue1,2 increased 7% to $196.6 million compared to $184.1 million. Prescription transactions revenue increased 11% to $143.9 million compared to $129.4 million, primarily driven by an 8% increase in Monthly Active Consumers as well as quarter-specific favorability related to certain client contracts. Subscription revenue decreased 6% to $23.1 million compared to $24.6 million, primarily driven by a decrease in the number of subscription plans due to the anticipated sunset of our partnership subscription program, Kroger Savings Club. Kroger Savings Club revenue was over $1 million less in the fourth quarter of 2023 than in the prior year period. Gold subscription plans grew year-over-year and quarter-over-quarter to approximately 694 thousand and Gold revenue was $21.5 million. Pharma manufacturer solutions revenue decreased 2% to $24.4 million compared to $24.9 million, primarily driven by the impacts of the Restructuring Plan. The prior year quarter included over $2 million of revenue related to vitaCare, whereas in the fourth quarter of 2023 there was essentially none. Other revenue of $5.2 million stayed relatively flat.

Cost of revenues decreased 13% to $15.2 million, or 8% of revenue, compared to $17.4 million, or 9% of revenue, primarily driven by a decrease in personnel related costs due to lower average headcount principally as a result of the run-rate cash savings from the Restructuring Plan implemented beginning in the third quarter of 2023. Adjusted cost of revenues2 decreased 19% to $13.8 million, or 7% of Adjusted Revenue2, compared to $17.0 million, or 9% of Adjusted Revenue2.

Product development and technology expenses decreased 13% to $32.0 million, or 16% of revenue, compared to $36.8 million, or 20% of revenue, primarily driven by a decrease in payroll and related costs due to higher capitalization of certain qualified costs related to software development and lower average headcount. Adjusted product development and technology expenses2 decreased 8% to $24.2 million, or 12% of Adjusted Revenue2, compared to $26.3 million, or 14% of Adjusted Revenue2.

Sales and marketing expenses increased 11% to $93.8 million, or 48% of revenue, compared to $84.1 million, or 46% of revenue, primarily driven by an increase in payroll and related costs as well as a net increase in advertising and promotional expenses. Adjusted sales and marketing expenses2 increased 6% to $83.8 million, or 43% of Adjusted Revenue2, compared to $78.9 million, or 43% of Adjusted Revenue2.

General and administrative expenses increased 6% to $30.4 million, or 15% of revenue, compared to $28.6 million, or 16% of revenue, primarily driven by a non-cash charge related to the disposal of allocated goodwill associated with the Restructuring Plan recognized in the fourth quarter of 2023. In addition, the year-over-year change was impacted by increases in payroll and related expenses and third-party professional services costs, substantially offset by decreases in stock-based compensation expense principally related to the non-recurring awards granted to our co-founders in connection with our IPO, legal settlement costs and change in fair value of contingent consideration. Adjusted general and administrative expenses2 increased 43% to $17.6 million, or 9% of Adjusted Revenue2, compared to $12.3 million, or 7% of Adjusted Revenue2.

Net loss was $25.9 million compared to a net loss of $2.0 million, primarily driven by the individual factors described above as well as due to an income tax expense of $1.2 million, compared to an income tax benefit of $2.8 million. Net loss margin was 13.2% compared to a net loss margin of 1.1%. Adjusted Net Income2 was $31.1 million compared to Adjusted Net Income2 of $27.4 million.

Adjusted EBITDA2 was $57.3 million compared to $49.6 million, primarily driven by higher prescription transactions revenue. Adjusted EBITDA Margin2 was 29.1% compared to 26.9%.

Cash Flow and Capital Allocation

Net cash provided by operating activities in the fourth quarter was $15.9 million compared to $31.9 million in the comparable period last year, largely driven by the impact of higher net losses year-over-year. As of December 31, 2023, GoodRx had cash and cash equivalents of $672.3 million and total outstanding debt of $661.8 million.

GoodRx is focused on a disciplined approach to capital allocation, centered on furthering the Company’s mission and creating shareholder value. Our capital allocation priorities are investing for profitable growth, paying down debt, buying back shares, and M&A that aligns with our strategic priorities. These capital allocation priorities support GoodRx’s long-term growth strategy while also providing flexibility to navigate near-term challenges.

Share Repurchases

During the fourth quarter of 2023, we repurchased $77.8 million in shares of Class A common stock, representing approximately 14.1 million shares, under our then-current share repurchase program, which expired on February 23, 2024. As of December 31, 2023, we had $44.3 million of unused authorized share repurchase capacity under our then-current share repurchase program.

On February 27, 2024, our board of directors approved a new stock repurchase program (the “New Repurchase Program”) that authorized the repurchase of up to $450.0 million of our Class A common stock. Repurchases under the New Repurchase Program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at the Company’s discretion, depending on market conditions and corporate needs. GoodRx may also, from time to time, enter into trading plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934, as amended, to facilitate repurchases under the New Repurchase Program. Any repurchases are expected to be funded with the Company’s existing cash and cash equivalents, working capital, cash flows from operations, or funds available through various borrowing arrangements. The New Repurchase Program has no expiration date, does not obligate GoodRx to acquire any particular amount of Class A common stock and may be modified, suspended or terminated at any time at the discretion of our board of directors.

Guidance

For the first quarter and full year 2024, management is anticipating the following:

$ in millions

1Q 2024

1Q 2023

YoY Change

Revenue5

~$195-$198

$184.0

~6%-8%

Adjusted Revenue5

~$195-$198

$184.0

~6%-8%

Adjusted EBITDA Margin6

High twenty-percent range, potentially up to 30%

 

$ in millions

FY 2024

FY 2023

YoY Change

Revenue5

~$800

$750.3

~7%

Adjusted Revenue5

~$800

$760.3

~5%

Adjusted EBITDA6

~$250

“We are guiding to first quarter revenue and Adjusted Revenue in the range of about $195 million to $198 million, representing about 6% to 8% year-over-year growth, and Adjusted EBITDA Margin in the high twenty-percent range, potentially up to 30%. Our first quarter guide includes our current estimate of the impact of the recent system outages disclosed by UnitedHealth Group that we believe, at this early stage, is not reasonably likely to have a material impact on our financials, despite the impact lasting a couple of days,” said Karsten Voermann, Chief Financial Officer. “For the full year 2024, we expect revenue and Adjusted Revenue to be about $800 million, representing about 7% and 5% year-over-year growth, respectively. These full year growth rates are tempered by the approximately $25 million topline impact associated with our pharma manufacturer solutions restructuring, including the deprioritization of vitaCare, the anticipated sunset of the Kroger Savings Club, and our continued investments in consumer incentives which we expect will reduce revenue. We believe our Adjusted EBITDA trajectory is continuing to ramp as we delivered Adjusted EBITDA Margin in the high twenties over the last couple of quarters and we expect to achieve approximately $250 million of Adjusted EBITDA for the full year 2024.”

“Our balance sheet and liquidity position remained strong in the fourth quarter, with a healthy cash balance that affords us significant flexibility. We will continue to prioritize cash conversion and disciplined capital deployment to support our strategic priorities and accelerate value creation,” concluded Voermann.

5

 

Adjusted Revenue is a non-GAAP financial measure and is presented for supplemental informational purposes only. We expect revenue, the most directly comparable financial measure calculated in accordance with GAAP, to equal Adjusted Revenue for the first quarter and full year of 2024. For the first quarter 2023, revenue equals Adjusted Revenue. For the full year 2023 Adjusted Revenue, refer to the Non-GAAP Financial Measures section below for reconciliation to the most directly comparable GAAP measure.

6

 

Adjusted EBITDA Margin is Adjusted EBITDA divided by Adjusted Revenue. Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures and are presented for supplemental informational purposes only. We have not reconciled our Adjusted EBITDA and Adjusted EBITDA Margin guidance to GAAP net income or loss and GAAP net income or loss margin, respectively, because we do not provide guidance for such GAAP measures due to the uncertainty and potential variability of stock-based compensation expense, acquired intangible assets and related amortization and income taxes, which are reconciling items between Adjusted EBITDA and Adjusted EBITDA Margin and their respective most directly comparable GAAP measures. Because such items cannot be provided without unreasonable efforts, we are unable to provide a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measure. However, such items could have a significant impact on our future GAAP net income or loss and GAAP net income or loss margin.

Investor Conference Call and Webcast

GoodRx management will host a conference call and webcast today, February 29, 2024, at 5:00 a.m. Pacific Time (8:00 a.m. Eastern Time) to discuss the results and the Company’s business outlook.

To access the conference call, please pre-register using the following link:

https://register.vevent.com/register/BIc3b837c2f5dc4943bcc1355119820c4d
Registrants will receive a confirmation with dial-in details and a unique passcode required to join.

The call will also be webcast live on the Company’s investor relations website at https://investors.goodrx.com, where accompanying materials will be posted prior to the conference call.

Approximately one hour after completion of the live call, an archived version of the webcast will be available on the Company’s investor relations website at https://investors.goodrx.com for at least 30 days.

About GoodRx

GoodRx is the leading destination for prescription savings in the U.S. We offer consumers free access to transparent and lower prices for generic and brand medications, as well as comprehensive healthcare research and information. We also equip healthcare professionals with efficient ways to find and prescribe affordable medications. Since 2011, GoodRx has helped consumers save nearly $70 billion and is one of the most downloaded medical apps over the past decade.

GoodRx periodically posts information that may be important to investors on its investor relations website at https://investors.goodrx.com. We intend to use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors and potential investors are encouraged to consult GoodRx’s website regularly for important information, in addition to following GoodRx’s press releases, filings with the Securities and Exchange Commission and public conference calls and webcasts. The information contained on, or that may be accessed through, GoodRx’s website is not incorporated by reference into, and is not a part of, this press release.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding our future results of operations and financial position, industry and business trends, our value proposition, our collaborations and partnerships with third parties, including our integrated savings programs, the anticipated sunset of the Kroger Savings Club, the New Repurchase Program, anticipated impacts of the de-prioritization of certain solutions under our pharma manufacturer solutions offering and our cost savings initiatives, our direct contracting approach with retailers, realizability of deferred tax assets, expected impact of recent outages disclosed by UnitedHealth Group, business strategy, cash conversion and capital deployment, our plans, market opportunity and growth and our objectives for future operations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, risks related to our limited operating history and early stage of growth; our ability to achieve broad market education and change consumer purchasing habits; our general ability to continue to attract, acquire and retain consumers in a cost-effective manner; our reliance on our prescription transactions offering and ability to expand our offerings; changes in medication pricing and pricing structures; our general inability to control the categories and types of prescriptions for which we can offer savings or discounted prices; our reliance on a limited number of industry participants, including pharmacy benefit managers, pharmacies, and pharma manufacturers; the competitive nature of industry; risks related to pandemics, epidemics or outbreak of infectious disease, such as COVID-19; the accuracy of our estimate of our total addressable market and other operational metrics; our ability to respond to changes in the market for prescription pricing and to maintain and expand the use of GoodRx codes; our ability to maintain positive perception of our platform and brand; risks related to any failure to maintain effective internal control over financial reporting; risks related to use of social media, emails, text messages and other messaging channels as part of our marketing strategy; our dependence on our information technology systems and those of our third-party vendors, and risks related to any failure or significant disruptions thereof; risks related to government regulation of the internet, e-commerce, consumer data and privacy, information technology and cybersecurity; risks related to a decrease in consumer willingness to receive correspondence or any technical, legal or any other restrictions to send such correspondence; risks related to any failure to comply with applicable data protection, privacy and security, advertising and consumer protection laws, standards, and other requirements; our ability to utilize our net operating loss carryforwards and certain other tax attributes; the risk that we may not achieve the intended outcomes of our restructuring and cost reduction efforts; our ability to attract, develop, motivate and retain well-qualified employees; risks related to our acquisition strategy; risks related to our debt arrangements; interruptions or delays in service on our apps or websites; our reliance on third-party platforms to distribute our platform and offerings, including software as-a-service technologies; systems failures or other disruptions in the operations of these parties on which we depend; risks related to climate change; the increasing focus on environmental sustainability and social initiatives; risks related to our intellectual property; risks related to operating in the healthcare industry; risks related to our organizational structure; litigation related risks; our ability to accurately forecast revenue and appropriately plan our expenses in the future; risks related to general economic factors, natural disasters or other unexpected events; risks related to fluctuations in our tax obligations and effective income tax rate which could materially and adversely affect our results of operations; risks related to the recent healthcare reform legislation and other changes in the healthcare industry and in healthcare spending which may adversely affect our business, financial condition and results of operations; as well as the other important factors discussed in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and in our other filings with the Securities and Exchange Commission. The forward-looking statements in this press release are based upon information available to us as of the date of this press release, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

Key Operating Metrics

Monthly Active Consumers (MACs) refers to the number of unique consumers who have used a GoodRx code to purchase a prescription medication in a given calendar month and have saved money compared to the list price of the medication. A unique consumer who uses a GoodRx code more than once in a calendar month to purchase prescription medications is only counted as one Monthly Active Consumer in that month. A unique consumer who uses a GoodRx code in two or three calendar months within a quarter will be counted as a Monthly Active Consumer in each such month. Monthly Active Consumers do not include subscribers to our subscription offerings, consumers of our pharma manufacturer solutions offering, or consumers who use our telehealth offerings. When presented for a period longer than a month, Monthly Active Consumers are averaged over the number of calendar months in such period. Monthly Active Consumers from acquired companies are only included beginning in the first full quarter following the acquisition.

Subscription plans represent the ending subscription plan balance across both of our subscription offerings, GoodRx Gold and Kroger Savings Club. Each subscription plan may represent more than one subscriber since family subscription plans may include multiple members.

We exited the fourth quarter of 2023 with over 7 million prescription-related consumers that used GoodRx across our prescription transactions and subscription offerings. Our prescription-related consumers represent the sum of Monthly Active Consumers for the three months ended December 31, 2023 and subscribers to our subscription plans as of December 31, 2023.

 

Three Months Ended

(in millions)

December 31,
2023

 

September 30,
2023

 

June 30,
2023

 

March 31,
2023

 

December 31,
2022

 

September 30,
2022

 

June 30,
2022

 

March 31, 2022

Monthly Active Consumers

6.4

 

6.1

 

6.1

 

6.1

 

5.9

 

5.8

 

5.8

 

6.4

 

As of

(in thousands)

December 31,
2023

 

September 30,
2023

 

June 30,
2023

 

March 31,
2023

 

December 31,
2022

 

September 30,
2022

 

June 30,
2022

 

March 31, 2022

Subscription plans

884

 

930

 

969

 

1,007

 

1,030

 

1,060

 

1,133

 

1,203

Contacts

Investor Contact
GoodRx

Whitney Notaro

wnotaro@goodrx.com

Press Contact
GoodRx

Lauren Casparis

lcasparis@goodrx.com

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