GoodRx Holdings, Inc.: Form 10-Q for the period ended Sep 30, 2024

You should read the following discussion and analysis of our financial condition and results of operations together with

our unaudited 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, 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 September 30, 2024 as compared to the same period of 2023:

• Revenue increased 8% to $195.3 million from $180.0 million;
• Adjusted Revenue increased 3% to $195.3 million from $190.0 million;
• Net income and net income margin were $4.0 million and 2.0%, respectively, compared to net loss and net

loss margin of $38.5 million and 21.4%, respectively; and

• Adjusted EBITDA and Adjusted EBITDA Margin were $65.0 million and 33.3%, respectively, compared to $53.5

million and 28.1%, respectively.

For the nine months ended September 30, 2024 as compared to the same period of 2023:

• Revenue increased 7% to $593.7 million from $553.6 million;
• Adjusted Revenue increased 5% to $593.7 million from $563.6 million;
• Net income and net income margin were $9.7 million and 1.6%, respectively, compared to $17.0 million and

3.1%, respectively; and

• Adjusted EBITDA and Adjusted EBITDA Margin were $193.2 million and 32.5%, respectively, compared to

$160.2 million and 28.4%, respectively.

Revenue, net income (loss) and net income (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.

Recently, we have seen rapid changes in the U.S. retail pharmacy landscape with Rite Aid's store closures in addition to

announcements of store closures and reduction of footprint from various other retail pharmacies, including Walgreens and

CVS. Future store closures and reduction of footprint from retail pharmacies are expected to have an immediate adverse

impact on our prescription volume and prescription transactions revenue. However, we believe this impact to be largely

transient as we expect prescription volume to migrate to other in-network pharmacies in the near term. As an extension of

the changing retail pharmacy landscape, we have seen and continue to expect heightened renegotiations between

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pharmacies and PBMs as a result of the pharmacies' increased focus on rationalizing of their spending, which in turn has

had and may continue to have an impact on our prescription transactions revenue.

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 third quarter of 2024 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 September 30, 2024 and subscribers to our subscription plans as of September 30,

Monthly Active Consumers

Consumer demand for our prescription transactions offering is subject to seasonality. We typically experience stronger

consumer demand during the first and fourth quarters of each year. For our integrated savings programs, we may

experience stronger traffic during the first half of each year since more claims are likely to be routed through GoodRx while

plan members are in the deductible phase of their health plans. For further information regarding seasonality, refer to Part II,

There have been no material changes in our market risk from the disclosure included in Part II, Item 7A, “Quantitative

and Qualitative Disclosures About Market Risk” of our 2023 10-K.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of

the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and

procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal

executive officer and principal financial officer concluded that, as of September 30, 2024, our disclosure controls and

procedures were effective.

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Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)

under the Exchange Act) during the three months ended September 30, 2024 that have materially affected, or are

reasonably likely to materially affect, our internal control over financial reporting.

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There have been no material changes to the risk factors previously disclosed in our 2023 10-K. For a discussion of

potential risks and uncertainties related to us, see the information included in Part I, Item 1A, "Risk Factors" of our 2023 10-

K.