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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________________________
FORM 10-Q
________________________________
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______.
Commission File Number: 001-39549
________________________________
GoodRx Holdings, Inc.
(Exact Name of Registrant as Specified in its Charter)
________________________________
Delaware
47-5104396
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2701 Olympic Boulevard
Santa Monica, CA
90404
(Address of principal executive offices)
(Zip Code)
(855) 268-2822
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Class A common stock, $0.0001 par value per share
GDRX
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
x
Non-accelerated filer
o
Smaller reporting company
o
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of April 30, 2024, the registrant had 94,335,792 shares of Class A common stock, $0.0001 par value per share, and
280,869,320 shares of Class B common stock, $0.0001 par value per share, outstanding.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements
to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All
statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking
statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,”
“plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,”
“potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in
this Quarterly Report on Form 10-Q include, but are not limited to 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 program, the sunset of the Kroger Savings program, stock compensation, our stock
repurchase program, potential outcomes and estimated impacts of certain legal proceedings, business strategy, our plans,
market growth and our objectives for future operations.
The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these
forward-looking statements largely on our current expectations and projections about future events and financial trends that
we believe may affect our business, financial condition and results of operations. Forward-looking statements 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 significant reliance on our prescription
transactions offering and ability to expand our offerings; changes in medication pricing and the significant impact of pricing
structures negotiated by industry participants; 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
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 or maintain
and enhance our 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, regulations,
standards, and other requirements; our ability to utilize our net operating loss carryforwards and certain other tax attributes;
the risk that we may be unable to realize expected benefits from 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 or any undetected errors or design faults; 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 (“2023 10-K”) and in our other filings with the
Securities and Exchange Commission (“SEC”). The forward-looking statements in this Quarterly Report on Form 10-Q are
based upon information available to us as of the date of this Quarterly Report on Form 10-Q, 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.
You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on
Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future
results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of
our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date
of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any
forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information,
future events or otherwise.
We periodically post information that may be important to investors on our 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 our website regularly for important information, in addition to following GoodRx’s press releases,
filings with the SEC and public conference calls and webcasts. The information contained on, or that may be accessed
through, our website is not incorporated by reference into, and is not a part of, this Quarterly Report on Form 10-Q.
Table of Contents
Page
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
GoodRx Holdings, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except par values)
March 31, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$533,295
$672,296
Accounts receivable, net
144,769
143,608
Prepaid expenses and other current assets
54,735
56,886
Total current assets
732,799
872,790
Property and equipment, net
15,341
15,932
Goodwill
410,769
410,769
Intangible assets, net
58,122
60,898
Capitalized software, net
103,980
95,439
Operating lease right-of-use assets, net
30,928
29,929
Deferred tax assets, net
65,268
65,268
Other assets
36,756
37,775
Total assets
$1,453,963
$1,588,800
Liabilities and stockholders' equity
Current liabilities
Accounts payable
$33,518
$36,266
Accrued expenses and other current liabilities
70,843
71,329
Current portion of debt
7,029
8,787
Operating lease liabilities, current
5,131
6,177
Total current liabilities
116,521
122,559
Debt, net
646,678
647,703
Operating lease liabilities, net of current portion
51,339
48,403
Other liabilities
8,356
8,177
Total liabilities
822,894
826,842
Commitments and contingencies (Note 7)
Stockholders' equity
Preferred stock, $0.0001 par value; 50,000 shares authorized and zero shares
issued and outstanding at March 31, 2024 and December 31, 2023
Common stock, $0.0001 par value; Class A: 2,000,000 shares authorized,
94,074 and 92,355 shares issued and outstanding at March 31, 2024 and
December 31, 2023, respectively; and Class B: 1,000,000 shares authorized,
280,869 and 301,732 shares issued and outstanding at March 31, 2024 and
December 31, 2023
38
40
Additional paid-in capital
2,089,443
2,219,321
Accumulated deficit
(1,458,412)
(1,457,403)
Total stockholders' equity
631,069
761,958
Total liabilities and stockholders' equity
$1,453,963
$1,588,800
See accompanying notes to condensed consolidated financial statements.
1
GoodRx Holdings, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended March 31,
(in thousands, except per share amounts)
2024
2023
Revenue
$197,880
$183,986
Costs and operating expenses:
Cost of revenue, exclusive of depreciation and amortization presented
separately below
12,468
16,695
Product development and technology
31,017
32,908
Sales and marketing
89,964
78,522
General and administrative
41,108
29,619
Depreciation and amortization
15,942
14,939
Total costs and operating expenses
190,499
172,683
Operating income
7,381
11,303
Other expense, net:
Other expense
(1,808)
Interest income
7,555
7,234
Interest expense
(14,643)
(13,133)
Total other expense, net
(7,088)
(7,707)
Income before income taxes
293
3,596
Income tax expense
(1,302)
(6,886)
Net loss
$(1,009)
$(3,290)
Loss per share:
Basic and diluted
$(0.00)
$(0.01)
Weighted average shares used in computing loss per share:
Basic and diluted
390,048
412,429
Stock-based compensation included in costs and operating expenses:
Cost of revenue
$76
$161
Product development and technology
5,848
8,589
Sales and marketing
8,127
4,412
General and administrative
11,045
12,337
See accompanying notes to condensed consolidated financial statements.
2
GoodRx Holdings, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
Class A and Class B
Common Stock
Additional
Paid-in
Capital
Accumulated
Deficit
Total
Stockholders'
Equity
(in thousands)
Shares
Amount
Balance at December 31, 2023
394,087
$40
$2,219,321
$(1,457,403)
$761,958
Stock options exercised
604
2,666
2,666
Stock-based compensation
28,891
28,891
Vesting and settlement of restricted stock
units
2,535
Common stock withheld related to net
share settlement
(954)
(6,623)
(6,623)
Repurchases of Class A common stock (1)
(21,329)
(2)
(154,812)
(154,814)
Net loss
(1,009)
(1,009)
Balance at March 31, 2024
374,943
$38
$2,089,443
$(1,458,412)
$631,069
See accompanying notes to condensed consolidated financial statements.
_____________________________________________________
(1)Repurchases of Class A common stock for the three months ended March 31, 2024 include 20.9 million shares
repurchased from related parties (after giving effect to the automatic conversion of Class B common stock to Class
A common stock upon such repurchase) for an aggregate consideration of $151.4 million. See "Note 9.
Stockholders' Equity" for additional information.
3
GoodRx Holdings, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
Class A and Class B
Common Stock
Additional
Paid-in
Capital
Accumulated
Deficit
Total
Stockholders'
Equity
(in thousands)
Shares
Amount
Balance at December 31, 2022
397,025
$40
$2,263,322
$(1,448,535)
$814,827
Stock options exercised
192
895
895
Stock-based compensation
28,263
28,263
Vesting and settlement of restricted stock
units
1,668
Common stock withheld related to net
share settlement
(666)
(3,710)
(3,710)
Repurchases of Class A common stock
(1,570)
(9,517)
(9,517)
Net loss
(3,290)
(3,290)
Balance at March 31, 2023
396,649
$40
$2,279,253
$(1,451,825)
$827,468
See accompanying notes to condensed consolidated financial statements.
4
GoodRx Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31,
(in thousands)
2024
2023
Cash flows from operating activities
Net loss
$(1,009)
$(3,290)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
15,942
14,939
Amortization of debt issuance costs
837
849
Non-cash operating lease expense
895
1,042
Stock-based compensation expense
25,096
25,499
Deferred income taxes
35
Loss on minority equity interest investment
1,808
Changes in operating assets and liabilities
Accounts receivable
(1,161)
699
Prepaid expenses and other assets
3,339
(6,005)
Accounts payable
(2,452)
(4,737)
Accrued expenses and other current liabilities
924
1,184
Operating lease liabilities
(4)
(140)
Other liabilities
179
405
Net cash provided by operating activities
42,586
32,288
Cash flows from investing activities
Purchase of property and equipment
(407)
(148)
Capitalized software
(20,208)
(14,140)
Net cash used in investing activities
(20,615)
(14,288)
Cash flows from financing activities
Payments on long-term debt
(3,516)
(1,758)
Repurchases of Class A common stock (1)
(153,226)
(9,517)
Proceeds from exercise of stock options
2,584
708
Employee taxes paid related to net share settlement of equity awards
(6,814)
(3,523)
Net cash used in financing activities
(160,972)
(14,090)
Net change in cash and cash equivalents
(139,001)
3,910
Cash and cash equivalents
Beginning of period
672,296
757,165
End of period
$533,295
$761,075
Supplemental disclosure of cash flow information
Non cash investing and financing activities:
Stock-based compensation included in capitalized software
$3,795
$2,764
Capitalized software included in accounts payable and accrued expenses and other current
liabilities
4,376
2,625
Capitalized software transferred from prepaid assets
5,751
See accompanying notes to condensed consolidated financial statements.
_____________________________________________________
(1)Repurchases of Class A common stock for the three months ended March 31, 2024 include 20.9 million shares
repurchased from related parties (after giving effect to the automatic conversion of Class B common stock to Class
A common stock upon such repurchase) for an aggregate consideration of $151.4 million. See "Note 9.
Stockholders' Equity" for additional information.
5
GoodRx Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Description of Business
GoodRx Holdings, Inc. was incorporated in September 2015 and has no material assets or standalone operations other
than its ownership in its consolidated subsidiaries. GoodRx, Inc. (“GoodRx”), a Delaware corporation initially formed in
September 2011, is a wholly-owned subsidiary of GoodRx Intermediate Holdings, LLC, which itself is a wholly-owned
subsidiary of GoodRx Holdings, Inc.
GoodRx Holdings, Inc. and its subsidiaries (collectively, "we," "us" or "our") offer information and tools to help
consumers compare prices and save on their prescription drug purchases. We operate a price comparison platform that
provides consumers with curated, geographically relevant prescription pricing, and provides access to negotiated prices
through our codes that can be used to save money on prescriptions across the United States. These services are free to
consumers and we primarily earn revenue from our core business from pharmacy benefit managers ("PBMs") that manage
formularies and prescription transactions including establishing pricing between consumers and pharmacies. We also offer
other healthcare products and services, including pharmaceutical ("pharma") manufacturer solutions, subscriptions and
telehealth services.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the
Securities and Exchange Commission (“SEC”) regarding interim financial information. Certain information and disclosures
normally included in our annual consolidated financial statements prepared in accordance with GAAP have been condensed
or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with our audited
consolidated financial statements for the year ended December 31, 2023 and the related notes, which are included in our
Annual Report on Form 10-K filed with the SEC on February 29, 2024 ("2023 10-K"). The December 31, 2023 condensed
consolidated balance sheet was derived from our audited consolidated financial statements as of that date. The condensed
consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring
items, necessary for the fair statement of our condensed consolidated financial statements. The operating results for the
three months ended March 31, 2024 are not necessarily indicative of the results expected for the full year ending
December 31, 2024.
There have been no material changes in significant accounting policies during the three months ended March 31, 2024
from those disclosed in “Note 2. Summary of Significant Accounting Policies” in the notes to our consolidated financial
statements included in our 2023 10-K.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of GoodRx Holdings, Inc., its wholly owned
subsidiaries and variable interest entities for which we are the primary beneficiary. Intercompany balances and transactions
have been eliminated in consolidation.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements,
including the accompanying notes. We base our estimates on historical factors; current circumstances; macroeconomic
events and conditions; and the experience and judgment of our management. We evaluate our estimates and assumptions
on an ongoing basis. Actual results can differ materially from these estimates, and such differences can affect the results of
operations reported in future periods.
Certain Risks and Concentrations
Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash,
cash equivalents and accounts receivable.
We maintain cash deposits with multiple financial institutions in the United States which, at times, may exceed federally
insured limits. Cash may be withdrawn or redeemed on demand. We believe that the financial institutions that hold our cash
are financially sound and, accordingly, minimal credit risk exists with respect to these balances. However, market conditions
can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our
cash and cash equivalents, there can be no assurance that we will be able to access uninsured funds in a timely manner or
at all. We have not experienced any losses in such accounts.
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We consider all short-term, highly liquid investments purchased with an original maturity of three months or less at the
date of purchase to be cash equivalents. Cash equivalents, consisting of U.S. treasury securities money market funds, of
$460.5 million and $605.5 million at March 31, 2024 and December 31, 2023, respectively, were classified as Level 1 of the
fair value hierarchy and valued using quoted market prices in active markets.
We extend credit to our customers based on an evaluation of their ability to pay amounts due under contractual
arrangements and generally do not obtain or require collateral. For the three months ended March 31, 2024, one customer
accounted for 12% of our revenue. For the three months ended March 31, 2023, two customers accounted for 13% and 11%
of our revenue. At March 31, 2024 and December 31, 2023, no customer accounted for more than 10% of our accounts
receivable balance.
Equity Investments
We retain minority equity interests in privately-held companies without readily determinable fair values. Our ownership
interests are less than 20% of the voting stock of the investees and we do not have the ability to exercise significant
influence over the operating and financial policies of the investees. The equity investments are accounted for under the
measurement alternative in accordance with Accounting Standards Codification ("ASC") 321, Investments – Equity
Securities, which is cost minus impairment, if any, plus or minus changes resulting from observable price changes. Due to
indicators of a decline in the financial condition of one of our investees, we recognized a $1.8 million impairment loss on one
of our minority equity interest investments during the three months ended March 31, 2023, which was presented as other
expense on our condensed consolidated statement of operations for that period. We otherwise have not recognized any
changes resulting from observable price changes or impairment losses on our minority equity interest investments during the
three months ended March 31, 2024 and 2023. Equity investments included in other assets on our condensed consolidated
balance sheets as of March 31, 2024 and December 31, 2023 were $15.0 million.
Recent Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 
2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU is intended to enhance the
transparency and decision usefulness of income tax disclosures. The amendments in this ASU address investor requests for
enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.
This ASU applies to all public entities and will be effective for fiscal years beginning after December 15, 2024, and for interim
periods for fiscal years beginning after December 15, 2025. Early adoption of this ASU is permitted. We are currently
evaluating the impact of the adoption of this ASU on our consolidated financial statement disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable
Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment
expenses that are regularly provided to the chief operating decision maker and included within each reported measure of
segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a
reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public
entities with a single reportable segment. This ASU applies to all public entities that are required to report segment
information in accordance with ASC 280, and is effective for fiscal years beginning after December 15, 2023 and is effective
for interim periods within fiscal years beginning after December 15, 2024. Early adoption of this ASU is permitted. We are
currently evaluating the impact of the adoption of this ASU on our consolidated financial statement disclosures.
3. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following:
(in thousands)
March 31, 2024
December 31, 2023
Insurance recovery receivable (1)
$14,900
$12,900
Income taxes receivable
2,268
3,537
Reimbursable third-party payments (2)
12,752
15,481
Other prepaid expenses and other current assets (3)
24,815
24,968
Total prepaid expenses and other current assets
$54,735
$56,886
_____________________________________________________
(1)Represents a receivable for the probable recovery related to an incurred loss in connection with certain
contingencies. Loss recoveries are recognized when a loss has been incurred and the recovery is probable. This
determination is based on our analysis of the underlying insurance policies, historical experience with insurers, and
ongoing review of the solvency of insurers, among other factors.
(2)Represents payments we make to third parties on behalf of, and reimbursable from, certain customers.
(3)Other current assets were not material as of March 31, 2024 and December 31, 2023.
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4. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
(in thousands)
March 31, 2024
December 31, 2023
Accrued bonus and other payroll related
$12,202
$30,401
Accrued legal settlement
27,500
12,500
Accrued marketing
14,493
10,650
Deferred revenue
6,528
7,105
Other accrued expenses
10,120
10,673
Total accrued expenses and other current liabilities
$70,843
$71,329
Deferred revenue represents payments received in advance of providing services for certain advertising contracts with
customers and subscriptions. We expect substantially all of the deferred revenue at March 31, 2024 will be recognized as
revenue within the subsequent twelve months. Of the $7.1 million of deferred revenue at December 31, 2023, $5.4 million
was recognized as revenue during the three months ended March 31, 2024. Revenue recognized during the three months
ended March 31, 2023 of $5.7 million was included as deferred revenue at December 31, 2022.
5. Income Taxes
We generally calculate income taxes in interim periods by applying an estimated annual effective income tax rate to
income or loss before income taxes and by calculating the tax effect of discrete items recognized during such periods. Our
estimated annual effective income tax rate is based on our estimated full year income or loss and the related income taxes
for each jurisdiction in which we operate. This rate can be affected by estimates of full year pre-tax income or loss and
permanent differences.
The effective income tax rate for the three months ended March 31, 2024 and 2023 was 444.4% and 191.5%,
respectively. The primary differences between our effective income tax rates and the federal statutory tax rate for the three
months ended March 31, 2024 and 2023 were due to the effects of non-deductible officers’ stock-based compensation
expense, state income taxes, benefits from research and development tax credits, and effects from our equity awards. The
effective income tax rate for the three months ended March 31, 2023 was further impacted by the valuation allowance on our
net deferred tax assets.
6. Debt
Our First Lien Credit Agreement (as amended from time to time, the "Credit Agreement") provides for (i) a $700.0 million
term loan maturing on October 10, 2025 (“First Lien Term Loan Facility”); and (ii) a revolving credit facility for up to $100.0
million (the “Revolving Credit Facility”). On February 20, 2024, we amended our Revolving Credit Facility to extend its
maturity date from October 11, 2024 to July 11, 2025. As of March 31, 2024, there were no changes to the terms of our First
Lien Term Loan Facility and Revolving Credit Facility as disclosed in Note 12 to our consolidated financial statements
included in our 2023 10-K.
The effective interest rate on the First Lien Term Loan Facility for the three months ended March 31, 2024 and 2023
was 8.77% and 7.81%, respectively.
We had no borrowings against the Revolving Credit Facility as of March 31, 2024 and December 31, 2023.
We had outstanding letters of credit issued against the Revolving Credit Facility for $8.3 million and $9.2 million as of
March 31, 2024 and December 31, 2023, respectively, which reduces our available borrowings under the Revolving Credit
Facility.
Our debt balance is as follows:
(in thousands)
March 31, 2024
December 31, 2023
Principal balance under First Lien Term Loan Facility
$658,281
$661,797
Less: Unamortized debt issuance costs and discounts
(4,574)
(5,307)
$653,707
$656,490
The estimated fair value of our debt approximated its carrying value as of March 31, 2024 and December 31, 2023,
based on inputs categorized as Level 2 in the fair value hierarchy.
Under the Credit Agreement, we are subject to a financial covenant requiring maintenance of a First Lien Net Leverage
Ratio (as defined in the Credit Agreement) not to exceed 8.2 to 1.0 only in the event that the amounts outstanding under the
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Revolving Credit Facility exceed a specified percentage of commitments under the Revolving Credit Facility, and other
nonfinancial covenants under the Credit Agreement. At March 31, 2024, we were in compliance with our covenants.
7. Commitments and Contingencies
Aside from the below, as of March 31, 2024, there were no material changes to our commitments and contingencies as
disclosed in the notes to our consolidated financial statements included in our 2023 10-K.
Between February 2, 2023, and March 30, 2023, five individual plaintiffs filed five separate putative class actions
lawsuits against Google, Meta, Criteo and us, alleging generally that we have not adequately protected consumer privacy
and that we communicated consumer information to third parties, including the three co-defendants. Four of the plaintiffs
allege common law intrusion upon seclusion and unjust enrichment claims, as well as claims under California’s
Confidentiality of Medical Information Act, Invasion of Privacy Act, Consumer Legal Remedies Act, and Unfair Competition
Law. One of these four plaintiffs additionally brings a claim under the Electronic Communications Privacy Act. The fifth
plaintiff brings claims for common-law unjust enrichment and violations of New York’s General Business Law. Four of these
cases were originally filed in the United States District Court for the Northern District of California ("NDCA) (Cases No. 3:23-
cv-00501; 3:23-cv-00744; 3:23-cv-00940; and 4:23-cv-01293). One case was originally filed in the United States District
Court for the Southern District of New York (Case No. 1:23-cv-00943); however, that case was voluntarily dismissed and re-
filed in the NDCA (Case No. 3:23-cv-01508). These five matters have been consolidated and assigned to U.S. District Judge
Araceli Martínez-Olguín in the NDCA. The court also set a briefing schedule for filing a single consolidated complaint, which
the plaintiffs filed on May 21, 2023 (Case No. 3:23-cv-00501-AMO; the "NDCA Class Action Matter"), as well as motions to
dismiss and motions to compel arbitration. In addition to the aforementioned claims, the plaintiffs in the now consolidated
matter bring claims under the Illinois Consumer Fraud and Deceptive Business Practices Act, common law negligence and
negligence per se, in each case, pleaded in the alternative. The plaintiffs are seeking various forms of monetary damages
(such as statutory damages, compensatory damages, attorneys’ fees and disgorgement of profits) as well as injunctive
relief. Briefing on the motions to dismiss and motions to compel arbitration was completed on August 24, 2023.
On October 27, 2023, six plaintiffs filed a class action complaint (Case No. 1:23-cv-24127-BB; the “SDFL Class Action
Matter”) against us in the United States District Court for the Southern District of Florida ("SDFL"). The plaintiffs alleged, on
behalf of the same nationwide class as the NDCA Class Action Matter, substantially the same statutory and common law
violation claims as alleged in that matter as well as claims based on the federal Electronic Communications Privacy Act,
invasion of privacy under California common law and the California constitution, invasion of privacy under New Jersey's
Constitution, and violations of Pennsylvania’s Wiretapping and Electronic Surveillance Control Act, Florida’s Security of
Communications Act, New York’s Civil Rights Law and Stop Hack and Improve Electronic Data Security Act. The plaintiffs in
the SDFL Class Action Matter seek various forms of monetary damages as well as injunctive and other unspecified equitable
relief.
On October 27, 2023, we entered into a proposed settlement agreement with the plaintiffs in the SDFL Class Action
Matter, on behalf of a nationwide settlement class that includes the NDCA Class Action Matter, which provides for a payment
of $13.0 million by us. On October 30, 2023, the plaintiffs in the SDFL Class Action Matter filed a motion and memorandum
in support of preliminary approval of the proposed class action settlement and, on October 31, 2023, the SDFL granted
preliminary approval of the proposed settlement. The proposed settlement is subject to final approval of the court. Members
of the class have the opportunity to opt-out of the class and commence their own actions.
In response to the proposed settlement in the SDFL Class Action Matter, plaintiffs in the NDCA Class Action Matter filed
(i) on November 1, 2023, a motion in the NDCA for an order to require us to cease litigation of, or alternatively file a motion
to stay in, the SDFL Class Action Matter and enjoin us from seeking settlement with counsel other than plaintiffs’ counsel in
the NDCA Class Action Matter; and (ii) on November 2, 2023, a motion in the SDFL for that court to allow them to intervene
and appear in the SDFL action, transfer the SDFL Class Action Matter to the NDCA and reconsider and deny its preliminary
approval of the proposed settlement. The SDFL has issued an order requiring the SDFL plaintiffs to, among other things, file
a response to the NDCA plaintiffs' motion to intervene. Additionally, U.S. District Judge Araceli Martínez-Olguín in the NDCA
issued an order for us to show cause as to why we should not be sanctioned for an alleged failure to provide notification to
the NDCA of the pendency of the SDFL Class Action Matter. We filed our written response to this order on November 8,
2023. The NDCA held a hearing on November 14, 2023, and ordered parties to the litigation to participate in mediation. The
parties participated in mediation on January 10, 2024, and have agreed to participate in an additional day of mediation.
which occurred on March 7, 2024. Negotiations between the parties remain ongoing.
Based on the proposed settlement agreement, we determined that an estimated $13.0 million loss was probable and
accrued $12.5 million as of December 31, 2023, which was net of an initial $0.5 million payment to a third party qualified
settlement fund that we do not own, which will be disbursed to the plaintiffs if required conditions are satisfied. Based on
ongoing negotiations and mediation between the parties, we determined the estimated probable loss to be $28.0 million as
of March 31, 2024, for which $27.5 million was accrued within accrued expenses and other current liabilities in our
condensed consolidated balance sheet as of March 31, 2024. While this amount represents our best judgment of the
probable loss based on the information currently available to us, it is subject to significant judgments and estimates and
numerous factors beyond our control, including, without limitation, final approval of the court or the results of mediation. The
results of legal proceedings are inherently uncertain, and upon final resolution of these matters, it is reasonably possible that
the actual loss may differ from our estimate.
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On April 22, 2024, Lisa Marie Barsuli, individually and on behalf of all others similarly situated, filed a class action
lawsuit against us and certain of our executive officers in the United States District Court for the Central District of California
(Case No. 2:24-cv-3282). The plaintiffs seek compensatory damages and equitable relief as well as interest, fees and costs.
The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder,
and asserts that we and certain of our executive officers failed to disclose to investors the risk relating to a grocery chain
taking actions that impacted acceptance of our discounted pricing for a subset of prescription drugs from PBMs, whose
pricing we promote on our platform (the “grocer issue”), which occurred late in the first quarter of 2022. As alleged in the
complaint, when we disclosed the occurrence of the grocer issue, our stock price fell, causing investor losses. We intend to
vigorously defend against these claims. We believe we have meritorious defenses to the claims of the plaintiff and members
of the class and based upon information presently known to management, we have not accrued a loss for this class action
lawsuit as a loss is not probable and reasonably estimable. While it is reasonably possible a loss may have been incurred,
we are unable to estimate a loss or range of loss in this matter.
These pending proceedings involve complex questions of fact and law and may require the expenditure of significant
funds and the diversion of other resources to defend. In addition, during the normal course of business, we may become
subject to, and are presently involved in, legal proceedings, claims and litigation. Such matters are subject to many
uncertainties and outcomes are not predictable with assurance. We have not accrued for a loss for any other matters as a
loss is not probable and a loss, or a range of loss, is not reasonably estimable. Accruals for loss contingencies are
recognized when a loss is probable, and the amount of such loss can be reasonably estimated. See "Note 4. Accrued
Expenses and Other Current Liabilities." Loss recoveries are recognized when a loss has been incurred and the recovery is
probable. See "Note 3. Prepaid Expenses and Other Current Assets."
In February 2023, we initiated arbitration against Famulus Health, LLC (“Famulus”) before the American Arbitration
Association in relation to Famulus’ breach of an agreement entered into by Famulus and us in June 2020, as amended (the
“Agreement”). GoodRx asserted claims for Famulus' breach of the confidentiality and exclusivity provisions in the
Agreement, seeking to recover damages and injunctive relief. On February 15, 2024, an arbitration award was rendered,
which included a damages award and a permanent injunction (the "Arbitration Award"). Famulus filed a petition to vacate the
Arbitration Award on February 21, 2024 in the United States District Court for the District of South Carolina ("DSC"). GoodRx
filed a petition to confirm the Arbitration Award on February 22, 2024 in the DSC. In April 2024, several motions and
oppositions were filed, which were consolidated by the DSC on April 12, 2024. The DSC held a hearing on April 30, 2024 on
the consolidated actions and an order issuance is pending. We can not make any assurance as to the outcome of the
Arbitration Award and when the Arbitration Award will be collected. Any gain on this matter is considered a gain contingency
and will be recognized in the period in which the Arbitration Award is realized or realizable, pursuant to ASC 450,
Contingencies.
8. Revenue
For the three months ended March 31, 2024 and 2023, revenue comprised the following:
Three Months Ended March 31,
(in thousands)
2024
2023
Prescription transactions revenue
$145,395
$134,907
Subscription revenue
22,601
24,143
Pharma manufacturer solutions revenue
24,509
20,435
Other revenue
5,375
4,501
Total revenue
$197,880
$183,986
9. Stockholders' Equity
On February 23, 2022, our board of directors ("Board") authorized the repurchase of up to an aggregate of
$250.0 million of our Class A common stock through February 23, 2024. On February 27, 2024, our Board approved a new
stock repurchase program which authorized the repurchase of up to an aggregate of $450.0 million of our Class A common
stock with no expiration date. Repurchases under these repurchase programs may be made in the open market, in privately
negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at our discretion,
depending on market conditions and corporate needs, or under a trading plan intended to satisfy the affirmative defense
conditions of Rule 10b5-1(c)(1) under the Exchange Act (a "Rule 10b5-1 Plan"). These repurchase programs do not obligate
us 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. Repurchased shares are subsequently retired and returned to the status of authorized but
unissued. As of March 31, 2024, we had $295.2 million available for future repurchases of our Class A common stock under
the new stock repurchase program.
On March 6, 2024, we entered into two Stock Purchase Agreements with related parties, one with Spectrum Equity VII,
L.P., Spectrum VII Investment Managers' Fund, L.P., and Spectrum VII Co-Investment Fund, L.P. (collectively, "Spectrum"),
10
and one with Francisco Partners IV, L.P. and Francisco Partners IV-A (collectively, "Francisco Partners"), pursuant to which
we agreed to repurchase 6.2 million and 14.6 million shares of our Class A common stock (after giving effect to the
automatic conversion of our Class B common stock to Class A common stock upon such repurchase) from Spectrum and
Francisco Partners, respectively, for an aggregate repurchase o20.9 million shares of our Class A common stock at a price
of $7.19 per share, in each case representing a discount from our closing share price of $7.57 on the date of the execution
of the Stock Purchase Agreements (the "Spectrum and Francisco Partners Repurchase"). The repurchase was approved by
our Board and its Audit Committee as part of the $450.0 million repurchase program approved in February 2024. Closing of
the Spectrum and Francisco Partners Repurchase occurred on March 11, 2024 for an aggregate consideration of $151.4
million, inclusive of direct costs and estimated excise taxes associated with the repurchases.
The following table presents information about our repurchases of our Class A common stock:
Three Months Ended March 31,
(in thousands)
2024
2023
Number of shares repurchased
21,329
1,570
Cost of shares repurchased
$154,814
$9,517
10. Basic and Diluted Loss Per Share
As we have net losses for the three months ended March 31, 2024 and 2023, diluted loss per share is the same as
basic loss per share, because potentially dilutive shares are excluded from the computation of loss per share as their effect
is anti-dilutive.
The following weighted average potentially dilutive shares are excluded from the computation of diluted loss per share
for the periods presented because including them would have been antidilutive:
Three Months Ended March 31,
(in thousands)
2024
2023
Stock options, restricted stock awards and restricted stock units
50,062
38,027
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with
our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-
Q, as well as Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and
Part II, Item 8, “Financial Statements and Supplementary Data” included in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2023 filed with the Securities and Exchange Commission ("SEC") on February 29, 2024 (“2023
10-K”). This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving
risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements
as a result of various factors, including those set forth in the "Risk Factors" section of our 2023 10-K and other factors set
forth in other parts of this Quarterly Report on Form 10-Q and our filings with the SEC.
Glossary of Selected Terminology
As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to:
we,” “us,” “our,” the “Company,” “GoodRx,” and similar references refer to GoodRx Holdings, Inc. and its
consolidated subsidiaries.
Co-Founders” refers to Trevor Bezdek, our Chairman and a director of the Company, and Douglas Hirsch,
our Chief Mission Officer and a director of the Company.
consumers refer to the general population in the United States that uses or otherwise purchases healthcare
products and services. References to “our consumers” or “GoodRx consumers” refer to consumers that
have used one or more of our offerings.
discounted price” refers to a price for a prescription provided on our platform that represents a negotiated
rate provided by one of our PBM partners at a retail pharmacy or under a direct contract with one of our
partner pharmacies. Through our platform, our discounted prices are free to access for consumers by saving a
GoodRx code to their mobile device for their selected prescription and presenting it at the chosen pharmacy.
The term “discounted price” excludes prices we may otherwise source, such as prices from patient assistance
programs for low-income individuals and Medicare prices, and any negotiated rates offered through our
subscription offerings: GoodRx Gold (“Gold”), and Kroger Rx Savings Club powered by GoodRx (“Kroger
Savings”).
GoodRx code refers to codes that can be accessed by our consumers through our apps or websites or that
can be provided to our consumers directly by healthcare professionals, including physicians and pharmacists,
that allow our consumers free access to our discounted prices or a lower list price for their prescriptions when
such code is presented at their chosen pharmacy.
Monthly Active Consumers 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 used our
telehealth offering. When presented for a period longer than a month, Monthly Active Consumers is averaged
over the number of calendar months in such period. For example, a unique consumer who uses a GoodRx
code twice in January, but who did not use our prescription transactions offering again in February or March, is
counted as 1 in January and as 0 in both February and March, thus contributing 0.33 to our Monthly Active
Consumers for such quarter (average of 1, 0 and 0). A unique consumer who uses a GoodRx code in January
and in March, but did not use our prescription transactions offering in February, would be counted as 1 in
January, 0 in February and 1 in March, thus contributing 0.66 to our Monthly Active Consumers for such
quarter. Monthly Active Consumers from acquired companies are only included beginning in the first full
quarter following the acquisition.
"partner pharmacies" refers to select licensed pharmacies with whom we have direct contractual agreements.
PBM refers to a pharmacy benefit manager. PBMs aggregate demand to negotiate prescription medication
prices with pharmacies and pharma manufacturers. PBMs find most of their demand through relationships with
insurance companies and employers. However, nearly all PBMs also have consumer direct or cash network
pricing that they negotiate with pharmacies for consumers who choose to purchase prescriptions outside of
insurance.
pharma” is an abbreviation for pharmaceutical.
savings,saved and similar references refer to the difference between the list price for a particular
prescription at a particular pharmacy and the price paid by the GoodRx consumer for that prescription utilizing
a GoodRx code available through our platform at that same pharmacy. In certain circumstances, we may show
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a list price on our platform when such list price is lower than the negotiated price available using a GoodRx
code and, in certain circumstances, a consumer may use a GoodRx code and pay the list price at a pharmacy
if such list price is lower than the negotiated price available using a GoodRx code. We do not earn revenue
from such transactions, but our savings calculation includes an estimate of the savings achieved by the
consumer because our platform has directed the consumer to the pharmacy with the low list price. This
estimate of savings when the consumer pays the list price is based on internal data and is calculated as the
difference between the average list price across all pharmacies where GoodRx consumers paid the list price
and the average list price paid by consumers in the pharmacies to which we directed them. We do not
calculate savings based on insurance prices as we do not have information about a consumer’s specific
coverage or price. We do not believe savings are representative or indicative of our revenue or results of
operations.
subscribers” and similar references refers to our consumers that are subscribed to either of our subscription
offerings, Gold or Kroger Savings. References to subscription plans as of a particular date represents an active
subscription to either one of our aforementioned subscription offerings as of the specified date. Each
subscription plan may represent more than one subscriber since family subscription plans may include multiple
members.
Certain monetary amounts, percentages, and other figures included in this Quarterly Report on Form 10-Q have been
subject to rounding adjustments. Percentage amounts included in this Quarterly Report on Form 10-Q have not in all cases
been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason,
percentage amounts in this Quarterly Report on Form 10-Q may vary from those obtained by performing the same
calculations using the figures in our condensed consolidated financial statements included elsewhere in this Quarterly
Report on Form 10-Q. Certain other amounts that appear in this Quarterly Report on Form 10-Q may not sum due to
rounding.
Overview
Our mission is to help Americans get the healthcare they need at a price they can afford. To achieve this, we are
building the leading consumer-focused digital healthcare platform in the United States. We believe our financial results
reflect the significant market demand for our offerings and the value that we provide to the broader healthcare ecosystem.
For the three months ended March 31, 2024 as compared to the same period of 2023:
Revenue and Adjusted Revenue increased 8% to $197.9 million from $184.0 million;
Net loss and net loss margin were $1.0 million and 0.5%, respectively, compared to net loss and net loss
margin of $3.3 million and 1.8%, respectively; and
Adjusted EBITDA and Adjusted EBITDA Margin were $62.8 million and 31.7%, respectively, compared to $53.2
million and 28.9%, respectively.
Revenue, net loss and net loss margin are financial measures prepared in conformity with accounting principles
generally accepted in the United States ("GAAP"). Adjusted Revenue, Adjusted EBITDA and Adjusted EBITDA Margin are
non-GAAP financial measures. For a reconciliation and presentation of Adjusted Revenue, Adjusted EBITDA and Adjusted
EBITDA Margin to the most directly comparable GAAP financial measures, information about why we consider Adjusted
Revenue, Adjusted EBITDA and Adjusted EBITDA Margin useful and a discussion of the material risks and limitations of
these measures, please see “Key Financial and Operating Metrics—Non-GAAP Financial Measures" below.
Key Financial and Operating Metrics
We use Monthly Active Consumers, subscription plans, Adjusted Revenue, Adjusted EBITDA and Adjusted EBITDA
Margin to assess our performance, make strategic and offering decisions and build our financial projections. The number of
Monthly Active Consumers and subscription plans are key indicators of the scale of our consumer base and a gauge for our
marketing and engagement efforts. We believe these operating metrics reflect our scale, growth and engagement with
consumers.
We exited the first quarter of 2024 with approximately 8 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 March 31, 2024 and subscribers to our subscription plans as of
March 31, 2024.
13
Monthly Active Consumers
Three Months Ended