GoodRx Holdings, Inc.: Form 10-Q for the period ended Sep 30, 2025

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, 2024 filed with the Securities and Exchange Commission ("SEC") on February 27,

2025 (“2024 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" sections of our 2024 10-K and this

Quarterly Report on Form 10-Q 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 Co-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 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. Effective January 1, 2025, Monthly Active Consumers from acquired companies are included

beginning from the acquisition date. Prior to January 1, 2025, Monthly Active Consumers from acquired

companies were 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

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a GoodRx code available through our platform at that same pharmacy. In certain circumstances, we may show

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 our subscription offerings,

GoodRx Gold (“Gold”), Kroger Rx Savings Club powered by GoodRx (“Kroger Savings”) which sunset in July

2024, condition-specific related subscription programs which first launched in June 2025, and RxSmartSaver+

powered by GoodRx ("RxSmartSaver+") which launched in July 2025. References to subscription plans as of

a particular date represents an active subscription to any one of our aforementioned subscription offerings as

of the specified date. For Gold, Kroger Savings, and RxSmartSaver+, 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 save time and money when filling their medications. To achieve this, we are building

the leading consumer-focused digital healthcare platform in the United States. For example, in the second quarter of 2025,

we announced the launch of our first condition-specific subscription program for erectile dysfunction, and in October 2025

expanded into hair loss. These condition-specific subscription programs offer consumers a single solution for comprehensive

care by bundling the clinician visit, prescription (if deemed medically appropriate by the treating healthcare provider), and

related delivery for a single total subscription price. We plan to continue to expand into additional conditions before the end

of 2025. In the third quarter of 2025, we also continued to grow our consumer direct pricing and announced a collaboration

with a pharmaceutical manufacturer to offer eligible patients nationwide two of the most in-demand GLP-1 medications at a

significantly lower cash price through our platform.

With respect to the healthcare landscape, change has become a constant with positive and negative impacts on our

business. For example, in July 2025, Congress passed a budget bill that cuts federal funding for Medicaid among other

health insurance programs, as well as tightens eligibility requirements and increases the frequency of Medicaid coverage

determinations. Further, copays on prescription medication have continued to trend upward in recent years and we believe

as insurance providers and government programs continue to shift the cost burden more to consumers, including through

changes to Affordable Care Act marketplace subsidies, consumers are now more than ever searching for sustainable and

affordable healthcare solutions which we believe strengthens our value proposition. Separately, certain major drug

producers and manufacturers are in negotiations with the current Presidential administration to receive relief from the

potential imposition of a 100% tariff on any branded or patented pharmaceutical product produced outside of the United

States. As a result of these negotiations, certain manufacturers have announced their participation in a new government

sponsored direct-to-consumer platform called “TrumpRx.gov,” designed to offer consumers discounts on their products and

some specialty brands. Details regarding this government sponsored platform, as well as any potential impact on our

business, offerings or results of operations, are unclear at this time but may be significant. We are actively engaged with the

administration, helping to inform policy efforts that expand access and affordability for all Americans. With the introduction of

these federal initiatives, including the renewed focus on Most-Favored-Nation pricing, the market is shifting decisively toward

greater transparency and direct-to-consumer access. For us, this evolution is both an opportunity and a clear validation of

our mission.

Conversely, we have seen rapid changes in the U.S. retail pharmacy landscape recently with announcements of store

closures and reduction of footprint from various retail pharmacies, including Rite Aid and Walgreens. In early May 2025, Rite

Aid announced its plan to pursue a sale of substantially all of its assets through a voluntary bankruptcy process.

Consequently, we saw several PBMs remove Rite Aid from their networks, causing immediate cessation in the associated

claims volume, as well as rapid store closures, which altogether adversely impacted our ability to recapture these claims in

the near term. As an extension of the changing retail pharmacy landscape, we have seen and continue to expect heightened

renegotiations between pharmacies and PBMs, including changes in retailer reimbursement models, as a result of the

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pharmacies' increased focus on rationalizing their spending. Furthermore, we saw a material volume reduction in one of our

integrated savings programs, which integrate our competitive discounts and pricing in a seamless experience at the

pharmacy counter for eligible plan members served by certain PBM partners. Integrated savings programs are operated

through PBMs who decide how to implement and manage these programs. Combined, these external factors have

adversely impacted our prescription transactions revenue, financial results, and Monthly Active Consumers that we expect

will continue in the near term with the expected impact to prescription transactions revenue estimated at $35.0 to $40.0

million in 2025.

Despite these near term challenges, we continue to believe that we are well positioned to grow our business over the

long term.

For the three months ended September 30, 2025 as compared to the same period of 2024:

• Revenue increased to $196.0 million from $195.3 million;
• Net income and net income margin were $1.1 million and 0.6%, respectively, compared to $4.0 million and

2.0%, respectively; and

• Adjusted EBITDA and Adjusted EBITDA Margin were $66.3 million and 33.8%, respectively, compared to $65.0

million and 33.3%, respectively.

For the nine months ended September 30, 2025 as compared to the same period of 2024:

• Revenue increased to $602.1 million from $593.7 million;
• Net income and net income margin were $25.0 million and 4.2%, respectively, compared to $9.7 million and

1.6%, respectively; and

• Adjusted EBITDA and Adjusted EBITDA Margin were $205.5 million and 34.1%, respectively, compared to

$193.2 million and 32.5%, respectively.

Revenue, net income and net income margin are financial measures prepared in conformity with accounting principles

generally accepted in the United States ("GAAP"). Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial

measures. For a reconciliation and presentation of Adjusted EBITDA and Adjusted EBITDA Margin to the most directly

comparable GAAP financial measures, information about why we consider 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.

Recent Development

On October 16, 2025, we acquired substantially all of the assets and assumed certain liabilities of ScriptDrop, Inc., a

prescription delivery technology platform for $13.5 million in cash. See Note 12 to our condensed consolidated financial

statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

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. As our business continues to evolve, we are reassessing the Monthly Active Consumers metric as a primary

indicator of performance to ensure it aligns with how we measure growth and profitability.

We exited the third quarter of 2025 with over 6 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, 2025 and subscribers to our subscription plans as of September 30,

Monthly Active Consumers

The factors described in the "Overview" section have adversely impacted our Monthly Active Consumers beginning in

the second quarter of 2025 and are expected to contribute to the year-over-year decline in Monthly Active Consumers in the

near term.

(in millions)

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Subscription Plans

Subscription plans through the second quarter of 2024 included subscription plans for Kroger Savings, which sunset in

July 2024.

(in thousands)

Non-GAAP Financial Measures

Adjusted Revenue, Adjusted EBITDA and Adjusted EBITDA Margin are key measures we use to assess our financial

performance and are also used for internal planning and forecasting purposes. We believe Adjusted Revenue, Adjusted

EBITDA and Adjusted EBITDA Margin are helpful to investors, analysts and other interested parties because they can assist

in providing a more consistent and comparable overview of our operations across our historical financial periods. In addition,

these measures are frequently used by analysts, investors and other interested parties to evaluate and assess performance.

We define Adjusted Revenue for a particular period as revenue excluding client contract termination costs associated

with restructuring related activities. We exclude these costs from revenue because we believe they are not indicative of past

or future underlying performance of the business. For the three and nine months ended September 30, 2025 and 2024,

revenue was equal to Adjusted Revenue.

We define Adjusted EBITDA for a particular period as net income or loss before interest, taxes, depreciation and

amortization, and as further adjusted, as applicable, for acquisition related expenses, stock-based compensation expense,

payroll tax expense related to stock-based compensation, loss on extinguishment of debt, financing related expenses, loss

on operating lease assets, restructuring related expenses, legal settlement expenses, gain on sale of business and other

income or expense, net. These excluded items are either non-cash charges or such that we believe they do not represent

our underlying core operating performance and that their exclusion provides investors with a better understanding of the

factors and trends affecting our business. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of

Adjusted Revenue.

Adjusted Revenue, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures and are

presented for supplemental informational purposes only and should not be considered as alternatives or substitutes to

financial information presented in accordance with GAAP. These measures have certain limitations in that they do not

include the impact of certain costs that are reflected in our condensed consolidated statements of operations that are

necessary to run our business. Other companies, including other companies in our industry, may not use these measures or

may calculate these measures differently than as presented in this Quarterly Report on Form 10-Q, limiting their usefulness

as comparative measures.

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The following table presents a reconciliation of net income, the most directly comparable financial measure calculated in

accordance with GAAP, to Adjusted EBITDA, and presents net income margin, the most directly comparable financial

measure calculated in accordance with GAAP, with Adjusted EBITDA Margin:

(dollars in thousands)

(1) Financing related expenses include third-party fees related to proposed financings.

(2) Acquisition related expenses principally include costs for actual or planned acquisitions including related third-party

fees, legal, consulting and other expenditures, and as applicable, severance costs and retention bonuses to

employees related to acquisitions and change in fair value of contingent consideration. From time to time,

acquisition related expenses may also include similar transaction related costs for business dispositions.

(3) Restructuring related expenses include costs for various workforce optimization and organizational changes to

better align with our strategic goals and future scale including employee severance and other personnel related

costs, contract termination costs, and from time to time may also include losses from the disposal of certain

technology and certain capitalized software.

(4) Legal settlement expenses consist of periodic settlement costs for significant or unusual litigation matters.

(5) Loss on operating lease asset represents losses incurred from time to time relating to the impairment or

abandonment of leased office space.

Components of our Results of Operations

For a description of the components of our results of operations, refer to Note 2 to our audited consolidated financial

statements included in our 2024 10-K. In addition, for a description of primary drivers that may cause our revenue, costs and

operating expenses to fluctuate from period to period, including seasonality, refer to Part II, Item 7, “Management’s

Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 10-K.

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Results of Operations

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The following table sets forth our results of operations for the three months ended September 30, 2025 and 2024:

(dollars in thousands)

Revenue

All of our revenue has been generated in the United States.

Prescription transactions revenue decreased $13.1 million, or 9%, year-over-year, primarily driven by a decrease in the

number of our Monthly Active Consumers (see section titled “Key Financial and Operating Metrics" above), due to the

broader changes in the retail pharmacy landscape including store closures and volume reduction in one of our integrated

savings programs as discussed above, partially offset by improved unit economics related to contracting with certain of our

customers and partners and favorable changes in sales mix. Our acquisition of VCRx (see Note 3 to our condensed

consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q) did not materially contribute to

the year-over-year changes in prescription transactions revenue and Monthly Active Consumers.

Subscription revenue decreased $0.6 million, or 3%, year-over-year, primarily driven by a decrease in the number of

subscription plans with 671 thousand subscription plans as of September 30, 2025 compared to 701 thousand as of

September 30, 2024.

Pharma manufacturer solutions revenue increased $15.2 million, or 54%, year-over-year, driven by organic growth as

we continued to expand our market penetration with pharma manufacturers and other customers. We expect pharma

manufacturer solutions to grow as a percentage of total revenue in the near to medium term as we continue to scale and

expand available services, capabilities and platforms of our pharma manufacturer solutions offering.

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Costs and Operating Expenses

Cost of revenue, exclusive of depreciation and amortization

Cost of revenue increased $1.7 million, or 15%, year-over-year, primarily driven by an increase in processing fees.

Product development and technology

Product development and technology expenses remained relatively flat year-over-year.

Sales and marketing

Sales and marketing expenses decreased $6.3 million, or 7%, year-over-year, primarily driven by a $5.3 million

decrease in stock-based compensation expense largely as a result of changes in our employee composition and a $2.7

million decrease in third-party marketing expenses.

General and administrative

General and administrative expenses increased $6.4 million, or 25%, year-over-year, primarily driven by a $5.5 million

estimated probable loss with respect to an ongoing class action litigation recognized in the third quarter of 2025.

Depreciation and amortization

Depreciation and amortization expenses increased $3.9 million, or 22%, year-over-year, primarily driven by higher

amortization related to capitalized software due to higher capitalization costs for platform improvements and the introduction

of new products and features.

Other Expense

We recognized other expense of $2.7 million in the third quarter of 2024 related to third-party transaction costs as a

result of our debt refinancing in July 2024.

Loss on Extinguishment of Debt

We recognized a loss on extinguishment of debt of $2.1 million in the third quarter of 2024 related to the write-off of a

portion of existing unamortized debt issuance costs and discounts as a result of our debt refinancing in July 2024.

Interest Income

Interest income decreased by $2.5 million, or 52%, year-over-year, primarily due to lower average balance of cash

equivalents held in U.S. treasury securities money market funds and lower interest rates.

Interest Expense

Interest expense decreased by $1.5 million, or 12%, year-over-year, primarily due to lower average debt balances and

lower interest rates.

Income Taxes

For the three months ended September 30, 2025 and 2024, we had income tax expense of $5.0 million and $4.1

million, respectively, and an effective income tax rate of 81.7% and 51.1%, respectively. The year-over-year increase in

income tax expense was primarily driven by an increase in the tax effects from our equity awards partially offset by a

decrease in income before income taxes.

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Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The following table sets forth our results of operations for the nine months ended September 30, 2025 and 2024:

(dollars in thousands)

Revenue

The year-over-year changes in prescription transactions revenue, subscription revenue, and pharma manufacturer

solutions revenue were driven by the same factors described above for the three months ended September 30, 2025

compared to the same period of 2024.

For expected revenue trends, see our discussion and analysis above for the three months ended September 30, 2025

compared to the same period of 2024.

Costs and Operating Expenses

Cost of revenue, exclusive of depreciation and amortization

Cost of revenue increased $4.1 million, or 11%, year-over-year, primarily driven by an increase in processing fees.

Product development and technology

Product development and technology expenses remained relatively flat year-over-year.

Sales and marketing

Sales and marketing expenses decreased $20.3 million, or 7%, year-over-year, primarily driven by a $11.0 million

decrease in stock-based compensation expense largely as a result of changes in our employee composition, a $7.9 million

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decrease in third-party marketing expenses, and a $5.8 million decrease in advertising expenses. The impact from these

drivers was partially offset by a $4.8 million increase in other personnel related expenses.

General and administrative

General and administrative expenses decreased $4.3 million, or 5%, year-over-year, primarily driven by a $7.5 million

decrease in estimated legal settlement expense with respect to an ongoing class action litigation, and a $4.4 million

decrease in stock-based compensation expense related to awards granted to our Co-Founders in 2020 that fully vested by

the end of 2024. The impact of these drivers was partially offset by a $4.4 million impairment loss related to a leased office

space we recognized in the first quarter of 2025 and a $2.4 million increase in professional fees.

Depreciation and amortization

Depreciation and amortization expenses increased $11.6 million, or 23%, year-over-year, primarily driven by the same

factors described above for the three months ended September 30, 2025 compared to the same period of 2024.

Other Expense, Loss on Extinguishment of Debt, Interest Income and Interest Expense

The year-over-year changes in other expense, loss on extinguishment of debt, interest income and interest expense

were primarily driven by the same factors described above for the three months ended September 30, 2025 compared to the

same period of 2024.

Income Taxes

For the nine months ended September 30, 2025 and 2024, we had income tax expense of $17.3 million and $10.4

million, respectively, and an effective income tax rate of 40.9% and 51.9%, respectively. The year-over-year increase in

income tax expense was primarily driven by an increase in income before income taxes and the tax effects from our equity

awards, partially offset by a decrease in the estimated annual effective income tax rate.

Liquidity and Capital Resources

Since our inception, we have financed our operations primarily through net cash provided by operating activities, equity

issuances, and borrowings under our long-term debt arrangements. As of September 30, 2025, our principal sources of

liquidity are our cash and cash equivalents and borrowings available under our $88.0 million secured revolving credit facility

that matures on April 10, 2029. As of September 30, 2025, we had cash and cash equivalents of $273.5 million and $80.2

million available under our revolving credit facility.

Other than as disclosed in Note 8 to our condensed consolidated financial statements appearing elsewhere in this

Quarterly Report on Form 10-Q, as of September 30, 2025, there were no material changes to our primary short-term and

long-term requirements for liquidity and capital or to our contractual commitments as disclosed in Part II, Item 7,

"Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2024 10-K.

Based on our current conditions, we believe that our net cash provided by operating activities and cash on hand will be

adequate to meet our operating, investing and financing needs for at least the next twelve months from the date of the

issuance of the accompanying unaudited condensed consolidated financial statements. Our future capital requirements will

depend on many factors, including the growth of our business, the timing and extent of investments, sales and marketing

activities, and many other factors as described in Part I, Item 1A, "Risk Factors" of our 2024 10-K.

If necessary, we may borrow funds under our revolving credit facility to finance our liquidity requirements, subject to

customary borrowing conditions. To the extent additional funds are necessary to meet our long-term liquidity needs as we

continue to execute our business strategy, we anticipate that they will be obtained through the incurrence of additional

indebtedness, additional equity financings or a combination of these potential sources of funds; however, such financing

may not be available on favorable terms, or at all. In particular, the current economic uncertainty, including rising inflation,

new or increased tariffs and socio-political events, has resulted in, and may continue to result in, significant disruption of

global financial markets, including rising interest rates, which could reduce our ability to access capital. If we are unable to

raise additional funds when needed or on the terms desired, our business, financial condition and results of operations could

be adversely affected.

Holding Company Status

GoodRx Holdings, Inc. is a holding company that does not conduct any business operations of its own. As a result,

GoodRx Holdings, Inc. is largely dependent upon cash distributions and other transfers from its subsidiaries to meet its

obligations and to make future dividend payments, if any. Our debt arrangements contain covenants restricting payments of

dividends by our subsidiaries, including GoodRx, Inc., unless certain conditions are met. These covenants provide for

certain exceptions for specific types of payments. Based on these restrictions, all of the net assets of GoodRx, Inc. were

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restricted pursuant to the terms of our debt arrangements as of September 30, 2025. Since the restricted net assets of

GoodRx, Inc. and its subsidiaries exceed 25% of our consolidated net assets, in accordance with Regulation S-X, see Note

18 to our consolidated financial statements included in our 2024 10-K for the condensed parent company financial

information of GoodRx Holdings, Inc.

Cash Flows

(in thousands)

Net cash provided by operating activities

The $4.1 million year-over-year decrease in net cash provided by operations was driven by a $18.5 million increase in

net income after adjusting for non-cash adjustments, offset by a $22.6 million increase in cash outflow from changes in

operating assets and liabilities. Changes in operating assets and liabilities were principally driven by the timing of payments

of prepaid services, accounts payable and accrued expenses, income tax payments and refunds, as well as collections of

accounts receivable.

Net cash used in investing activities

The $34.5 million year-over-year increase in net cash used in investing activities was primarily driven by a $30.0 million

increase in cash paid for the acquisition of a business and a $3.3 million increase in cash paid for software development.

Net cash used in financing activities

The $112.3 million year-over-year decrease in net cash used in financing activities was primarily driven by a

$165.9 million decrease in payments on our term loans and debt issuance costs as a result of our refinancing in July 2024

and a $13.1 million decrease in employee taxes paid related to net share settlement of equity awards. The impact from

these drivers was partially offset by a $48.3 million increase in payments for repurchases of our Class A common stock and

a $18.4 million decrease in proceeds from the exercise of stock options.

Recent Accounting Pronouncements

Refer to Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on

Form 10-Q.

Critical Accounting Policies and Estimates

During the three months ended September 30, 2025, there have been no significant changes to our critical accounting

policies and estimates compared with those disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial

Condition and Results of Operations” of our 2024 10-K.

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 2024 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, 2025, 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, 2025 that have materially affected, or are

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

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For a discussion of potential risks and uncertainties related to us, see the information included in Part I, Item 1A, "Risk

Factors" of our 2024 10-K. There have been no material changes to the risk factors previously disclosed in our 2024 10-K,

except as noted below:

General economic factors, natural disasters or other unexpected events may adversely affect our business,

financial performance and results of operations.

Although we only operate in the United States, our business, financial performance and results of operations depend in

part on worldwide macroeconomic economic conditions and their impact on consumer spending. Recessionary economic

cycles, changing interest rates, volatile fuel and energy costs, inflation, levels of unemployment, conditions in the residential

real estate and mortgage markets, access to credit, consumer debt levels, tariffs, government spending freezes, unsettled

financial markets and other economic factors that may affect costs of manufacturing prescription medications, consumer

spending or buying habits could materially and adversely affect our customers, our consumers, and demand for our

offerings. Volatility in the financial markets and deterioration in economic conditions, increasing inflation or increasing

unemployment levels has also had and may continue to have a negative impact on consumer spending patterns. Changes

and uncertainty can, among other things, reduce or shift spending away from medical treatments, procedures and doctors’

office visits.

In addition, negative national or global economic conditions have adversely affected the PBMs, partner pharmacies and

pharma manufacturers we contract with and their associated industry participants, financial performance, liquidity and

access to capital, and may continue to impact them. This may affect their ability to renew contracts with us on the same or

better terms, which could impact the competitiveness of the discounted prices we are able to offer our consumers. Trade

barriers, duties, tariffs, and retaliatory measures by the U.S. and other governments may impact the pharma manufacturers

we contract with by increasing their costs of business, which could cause them to decrease their marketing spend on our

offerings. All of these factors may be exacerbated by global financial conditions and other geopolitical factors, which could

harm our business, financial condition and results of operations.

Economic factors such as increased insurance and healthcare costs, commodity prices, tariffs, shipping costs, inflation,

higher costs of labor, and changes in or interpretations of other laws, regulations and taxes may also increase our costs and

make our offerings less competitive, increase general and administrative expenses, and otherwise adversely affect our

financial condition and results of operations.

Additionally, global public health crises, natural disasters, such as earthquakes and wildfires, and other adverse weather

and climate conditions, political crises, such as terrorist attacks, war and other political instability or other unexpected

events, could disrupt our operations, internet or mobile networks or the operations of PBMs and their pharmacy networks.

For example, our corporate headquarters and other facilities are located in California, which in the past has experienced

both severe earthquakes and wildfires. Certain of these events may become more frequent or intense as a result of climate

change or other environmental or social pressures. For more information, see our risk factor titled “We are subject to a

series of risks related to climate change” previously disclosed in our 2024 10-K. If any of these events occur, our business

could be adversely affected.

The impact of healthcare reform legislation and other proposed or future changes impacting the healthcare

industry and healthcare spending on us is currently unknown, but may adversely affect our business, financial

condition and results of operations.

Our revenue is dependent on the healthcare industry and could be affected by changes in healthcare spending and

policy. The healthcare industry is subject to changing political, regulatory and other influences. The Affordable Care Act (the

“ACA”), enacted in March 2010, made major changes in how healthcare is delivered and reimbursed, and increased access

to health insurance benefits to the uninsured and underinsured population of the United States. The ACA, among other

things, increased the number of individuals with Medicaid and private insurance coverage, implemented reimbursement

policies that tie payment to quality, facilitated the creation of accountable care organizations that may use capitation and

other alternative payment methodologies, strengthened enforcement of fraud and abuse laws and encouraged the use of

information technology.

New and changing laws, regulations, executive orders and other governmental actions, particularly from the new

presidential administration, may also create uncertainty about how laws and regulations will be interpreted and applied.

Such changes can adversely affect our business by increasing our costs, reducing spending by our customers, limiting the

Company’s ability to pursue or offer new offerings, and requiring changes to our business. Regulatory changes and other

actions that materially adversely affect our business may be announced with little or no advance notice and we may not be

able to effectively mitigate all adverse impacts from such measures. Differing interpretations of such legal obligations can

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expose us to significant fines, government investigations, litigation and reputational harm. If we are found to have violated

laws, regulations, or executive orders, it could materially adversely affect our business, reputation, results of operations and

financial condition.

In addition, recently there has been heightened governmental scrutiny of the manner in which pharma manufacturers

set prices for their marketed products, which has resulted in several U.S. congressional inquiries and proposed and enacted

federal and state legislation designed to, among other things, bring more transparency to medication pricing, reduce the cost

of prescription medications under government payor programs, and review the relationship between pricing and

manufacturer patient programs. For example, in August 2022, former President Biden signed the Inflation Reduction Act of

2022 (the “IRA”) into law. This statute marks the most significant action by Congress with respect to the pharmaceutical

industry since adoption of the ACA in 2010. Among other things, the IRA requires manufacturers of certain drugs to engage

in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates under Medicare

Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); redesigns the Medicare Part

D benefit (beginning in 2024); and replaces the Part D coverage gap discount program with a new manufacturer discounting

program (beginning in 2025). The Centers for Medicare & Medicaid Services has published the negotiated prices for the

initial ten drugs, which will first be effective in 2026, and has published the list of the subsequent 15 drugs that will be subject

to negotiation. The IRA permits the Secretary of the Department of Health and Human Services ("HHS") to implement many

of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and

update guidance as these programs are implemented, although the drug price negotiation program is currently subject to

legal challenges. In addition, the IRA delayed the final rule removing safe harbor protection for price reductions given by

pharmaceutical manufacturers to plan sponsors under Part D, either directly or through PBMs, unless the price reduction is

required by law, until 2032. In July 2025, the government enacted the One Big Beautiful Bill Act (the “OBBBA”), which

included reforms to programs such as Medicaid and restrictions for certain groups to access the Affordable Care Act

Marketplace. These changes may result in an increase in the number of individuals who are unable to access health

insurance benefits and medical care, and their ability to receive prescriptions and certain prescribed medications. The

impact of the IRA and OBBBA on our business and the pharmaceutical industry cannot yet be fully determined but is likely to

be significant.

More recently, the current presidential administration has proposed the imposition of a 100% tariff on branded or

patented pharmaceutical product produced outside of the United States. Such tariff may increase costs to our customers

and decrease demand for pharmaceutical products and consequently our offerings, which could have a material adverse

effect on our business, financial condition and results of operations. Certain major drug producers and manufacturers are in

negotiations with the administration to receive relief from such tariff. As a result of these negotiations, certain manufacturers

have announced their participation in a new government sponsored direct-to-consumer platform called “TrumpRx.gov,”

designed to offer consumers discounts on their products and some specialty brands. Details regarding this government

sponsored platform, as well as any potential positive or negative impact on our business, offerings or results of operations,

are unclear at this time but may be significant.

Our ability to realize the benefits of opportunities that we elect to pursue, such as initiatives related to TrumpRx.gov,

may be limited, and we may be unable to fully achieve related business goals. At the same time, ongoing changes and shifts

in healthcare policy, or changes in applicable legal standards, may reduce or even eliminate opportunities we may wish to

pursue. As a result, any returns on our investment in developing these opportunities are uncertain and the failure to achieve

related business goals may adversely affect our financial condition and results of operations.

Congress has and is likely to continue to scrutinize key participants in the healthcare industry, including PBMs. A

number of bills have been introduced in Congress that would further regulate PBMs and impose additional requirements.

The Federal Trade Commission (the "FTC") has issued statements about PBMs and conducted a study of PBMs that

resulted in two published reports, which could motivate further actions by Congress with respect to PBM regulation. Any

findings in the report may motivate further actions by Congress with respect to PBM regulation. In September 2024, the FTC

filed an administrative complaint against the three largest PBMs and their affiliated group purchasing organizations alleging

that the PBMs engaged in anti-competitive and unfair practices that increased costs for insulin medication. It is unclear what

the results of this matter will be, and what impact this will have on the PBM industry and our business, financial condition

and results of operations. See our risk factor titled “We are, and may become in the future, subject to various legal

proceedings and claims that arise in or outside the ordinary course of business, which may require significant management

time and attention, result in significant legal expenses and may result in unfavorable outcomes, which may have a material

adverse effect on our business, operating results and financial condition, and negatively affect the price of our Class A

common stock ” previously disclosed in our 2024 10-K.

Individual states in the United States have also increasingly passed legislation and implemented regulations designed

to control medication pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product

access, disclosure, transparency and reporting requirements to regulatory agencies regarding marketing costs and

discounts provided to patients, such as those provided through our prescription transactions offering and subscription

offerings, for prescription medications dispensed by pharmacies, and, in some cases, designed to encourage importation

from other countries and bulk purchasing. Some states have enacted legislation creating so-called prescription drug

affordability boards, which ultimately may attempt to impose price limits on certain drugs in these states. In addition, the

Supreme Court held in December 2020 in Rutledge v. Pharmaceutical Care Management that ERISA, a federal statute, did

not preempt an Arkansas state law that regulates PBM reimbursements to network pharmacies and other standards for

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PBMs’ reimbursements to network pharmacies. As a result of this holding, some states have passed, and other states may

pass similar legislation or may otherwise attempt to regulate PBMs, which could have impacts on the healthcare industry.

Further, we may see heightened regulatory scrutiny from state regulators related to our integrated savings programs,

particularly with respect to insurance laws. These regulatory requirements and related scrutiny may impose timing and

expense constraints on us or our industry partners that could adversely affect our partnerships or our operations.

We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could

impact the amounts that federal and state governments and other third-party payors will pay for healthcare products and

services or require us to restructure our existing arrangements with PBMs and pharma manufacturers, any of which could

adversely affect our business, financial condition and results of operations.