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 September 30, ~~2022~~

2023


☐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 OlympicBoulevard Santa Monica,, CA			90404
(Address of principal executive offices)			(Zip Code)

(~~855~~)

(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 ~~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 ~~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

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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~~November 1, 2022,~~ October 31, 2023, the registrant had ~~82,458,058~~92,400,328 shares of Class A common stock, $0.0001 par value per share, and 313,731,628 shares of Class B common stock, $0.0001 par value per share, outstanding.

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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, the ongoing impact of a grocery chain previously not accepting ~~PBM~~pharmacy benefit managers ("PBMs") pricing (the "grocer issue") on our future results of operations, the launch of new offerings, stock compensation, our stock repurchase program, anticipated impacts of the de-prioritization of certain solutions under our pharma manufacturer solutions offering and our cost savings initiatives, our direct contracting approach with retailers, realizability of deferred tax assets, potential outcomes and estimated impacts of certain legal proceedings, business strategy, 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 reliance on our prescription transactions offering and ability to expand our offerings; changes in medication pricing and pricing structures; our general inability to control the categories and types of prescriptions for which we can offer savings or discounted prices; our reliance on a limited number of industry ~~participants;~~participants, including PBMs, pharmacies, and pharma manufacturers; the competitive nature of industry; risks related to pandemics, epidemics or outbreak of ~~infection~~infectious disease, including ~~the COVID-19 pandemic;~~COVID-19; the accuracy of our estimate of our total addressable market and other operational metrics; ~~the development of the telehealth market; our ability~~risks related to ~~maintain~~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 ~~expand a network of skilled telehealth providers;~~security, advertising and consumer protection laws, standards, and other requirements; risks related to negative media coverage; our ability to respond to changes in the market for prescription pricing and to maintain and expand the use of GoodRx codes; our ability to maintain positive perception of our platform and brand; risks related to any failure to maintain effective internal control over ﬁnancial reporting; risks related to use of social media, emails, text messages and other messaging channels as part of our marketing strategy; our ability to accurately forecast revenue and appropriately plan our expenses in the future; risks related to ~~information technology and cyber-security; compliance with~~ government regulation of the internet, e-commerce, ~~and~~consumer data and ~~other regulations;~~privacy, information technology and cyber-security; our ability to utilize our net operating loss carryforwards and certain other tax attributes; our ability to attract, develop, motivate and retain well-qualified ~~employees;~~employees, and to successfully transition our Chief Executive Officer role; risks related to general economic factors, natural disasters or other unexpected events; risks related to our acquisition strategy; risks related to our debt arrangements; interruptions or delays in service on our apps or websites; our reliance on third-party platforms to distribute our platform and ~~offerings; our reliance on~~offerings, including software as-a-service ~~technologies from third parties;~~technologies; systems failures or other disruptions in the operations of these parties on which we depend; ~~changes in consumer sentiment or laws, rules or regulations regarding tracking technologies and other privacy matters;~~ the increasing focus on environmental sustainability and social initiatives; risks related to our intellectual property; risks related to climate change; risks related to operating in the healthcare industry; risks related to our organizational structure; risks related to fluctuations in our tax obligations and effective income tax rate which could materially and adversely affect our results of operations; litigation related risks; 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; the risk that we may not achieve the intended outcomes of our ~~recent~~restructuring and cost reduction ~~in force;~~efforts; as well as the other important factors discussed in the sections entitled “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 (“~~2021~~2022 10-K”) and this Quarterly Report on Form 10-Qand 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.

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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.

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				Page

PART I.		FINANCIAL INFORMATION		~~Page~~

~~PART I.~~	~~FINANCIAL INFORMATION~~
Item 1.	Condensed Consolidated Financial Statements (Unaudited)		1
		Condensed Consolidated Balance Sheets		1
		Condensed Consolidated Statements of Operations		2
		Condensed Consolidated Statements of Stockholders’ Equity		3
		Condensed Consolidated Statements of Cash Flows		5
		Notes to Condensed Consolidated Financial Statements		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		1715
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		3028
Item 4.		Controls and Procedures		3028

PART II.		OTHER INFORMATION
Item 1.		Legal Proceedings		3130
Item 1A.		Risk Factors		3130
Item 2.		Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities		3233
Item 3.		Defaults Upon Senior Securities		3334
Item 4.		Mine Safety Disclosures		3334
Item 5.		Other Information		3334
Item 6.		Exhibits		3435
		Signatures		3536

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

GoodRx Holdings, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except par values)

September 30,
2022

December 31,
2021

Assets

Current assets

Cash and cash equivalents

$
728,786

$
941,109

Accounts receivable, net

120,886

118,080

Prepaid expenses and other current assets

28,716

29,638

Total current assets

878,388

1,088,827

Property and equipment, net

22,287

21,612
��
Goodwill

415,256

329,696

Intangible assets, net

125,900

88,791

Capitalized software, net

71,299

44,987

Operating lease right-of-use assets

27,971

27,705

Other assets

25,958

6,007

Total assets

$
1,567,059

$
1,607,625

Liabilities and stockholders' equity

Current liabilities

Accounts payable

$
10,855

$
17,501

Accrued expenses and other current liabilities

61,025

50,732

Current portion of debt

7,029

7,029

Operating lease liabilities, current

6,057

5,851

Total current liabilities

84,966

81,113

Debt, net

652,814

655,858

Operating lease liabilities, net of current portion

32,551

33,592

Deferred tax liabilities, net

650

244

Other liabilities

7,675

5,138

Total liabilities

778,656

775,945

Commitments and contingencies (Note 8)

Stockholders' equity

Preferred stock, $0.0001 par value; 50,000 shares authorized and
    zero shares issued and outstanding at September 30, 2022 and
    December 31, 2021

—

—

Common stock, $0.0001 par value; Class A: 2,000,000 shares
   authorized, 82,333 and 85,028 shares issued and outstanding at
   September 30, 2022 and December 31, 2021, respectively; and
   Class B: 1,000,000 shares authorized, 313,732 and 315,534
   shares issued and outstanding at September 30, 2022 and
   December 31, 2021, respectively

40

40

Additional paid-in capital

2,234,926

2,247,347

Accumulated deficit

(1,446,563
)

(1,415,707
)
Total stockholders' equity

788,403

831,680

Total liabilities and stockholders' equity

$
1,567,059

$
1,607,625


(in thousands, except par values)	September 30, 2023		December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	794,905	$	757,165
Accounts receivable, net	121,146		117,141
Prepaid expenses and other current assets	53,047		45,380
Total current assets	969,098		919,686
Property and equipment, net	16,879		19,820
Goodwill	412,117		412,117
Intangible assets, net	89,431		119,865
Capitalized software, net	91,979		70,072
Operating lease right-of-use assets	31,501		35,906
Deferred tax assets, net	57,695		—
Other assets	39,272		27,165
Total assets	$	1,707,972	$	1,604,631
Liabilities and stockholders' equity
Current liabilities
Accounts payable	$	32,905	$	17,700
Accrued expenses and other current liabilities	74,554		47,523
Current portion of debt	7,029		7,029
Operating lease liabilities, current	3,334		4,068
Total current liabilities	117,822		76,320
Debt, net	648,729		651,796
Operating lease liabilities, net of current portion	52,387		54,131
Other liabilities	7,761		7,557
Total liabilities	826,699		789,804
Commitments and contingencies (Note 8)
Stockholders' equity
Preferred stock, $0.0001 par value; 50,000 shares authorized and zero shares issued and outstanding at September 30, 2023 and December 31, 2022	—		—
Common stock, $0.0001 par value; Class A: 2,000,000 shares authorized, 84,630 and 83,293 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively; and Class B: 1,000,000 shares authorized and 313,732 shares issued and outstanding at September 30, 2023 and December 31, 2022	40		40
Additional paid-in capital	2,312,767		2,263,322
Accumulated deficit	(1,431,534)		(1,448,535)
Total stockholders' equity	881,273		814,827
Total liabilities and stockholders' equity	$	1,707,972	$	1,604,631

See accompanying ~~Notes~~notes to ~~Condensed Consolidated Financial Statements.~~condensed consolidated financial statements.

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GoodRx Holdings, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in thousands, except per share amounts)

2022

2021

2022

2021

Revenue

$
187,318

$
195,102

$
582,445

$
532,168

Costs and operating expenses:

Cost of revenue, exclusive of depreciation and
   amortization presented separately below

17,395

11,271

47,719

32,789

Product development and technology

35,921

35,073

106,367

90,800

Sales and marketing

86,215

95,651

273,503

263,726

General and administrative

49,548

35,947

116,211

119,312

Depreciation and amortization

13,952

10,161

38,644

23,891

Total costs and operating expenses

203,031

188,103

582,444

530,518

Operating (loss) income

(15,713
)

6,999

1

1,650

Other expense, net:

Interest income

(2,920
)

(13
)

(3,829
)

(42
)
Interest expense

9,478

5,928

22,316

17,739

Total other expense, net

6,558

5,915

18,487

17,697

(Loss) income before income taxes

(22,271
)

1,084

(18,486
)

(16,047
)
Income tax (expense) benefit

(19,463
)

(19,153
)

(12,370
)

30,707

Net (loss) income

$
(41,734
)

$
(18,069
)

$
(30,856
)

$
14,660

(Loss) earnings per share:

Basic

$
(0.10
)

$
(0.04
)

$
(0.07
)

$
0.04

Diluted

$
(0.10
)

$
(0.04
)

$
(0.07
)

$
0.03

Weighted average shares used in computing
   (loss) earnings per share:

Basic

412,956

411,223

413,254

408,604

Diluted

412,956

411,223

413,254

429,695

Stock-based compensation included in costs and
   operating expenses:

Cost of revenue

$
136

$
238

$
190

$
540

Product development and technology

8,029

10,333

25,327

26,656

Sales and marketing

4,766

5,638

15,999

16,158

General and administrative

16,107

23,771

49,304

83,828


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2023		2022		2023		2022
Revenue	$	179,958	$	187,318	$	553,621	$	582,445
Costs and operating expenses:
Cost of revenue, exclusive of depreciation and amortization presented separately below	18,721		17,395		51,755		47,719
Product development and technology	39,611		35,921		103,804		106,367
Sales and marketing	91,615		86,215		247,577		273,503
General and administrative	35,317		49,548		95,144		116,211
Depreciation and amortization	33,024		13,952		64,060		38,644
Total costs and operating expenses	218,288		203,031		562,340		582,444
Operating (loss) income	(38,330)		(15,713)		(8,719)		1
Other expense, net:
Other expense	(2,200)		—		(4,008)		—
Interest income	8,649		2,920		23,697		3,829
Interest expense	(14,720)		(9,478)		(41,907)		(22,316)
Total other expense, net	(8,271)		(6,558)		(22,218)		(18,487)
Loss before income taxes	(46,601)		(22,271)		(30,937)		(18,486)
Income tax benefit (expense)	8,106		(19,463)		47,938		(12,370)
Net (loss) income	$	(38,495)	$	(41,734)	$	17,001	$	(30,856)
(Loss) earnings per share:
Basic	$	(0.09)	$	(0.10)	$	0.04	$	(0.07)
Diluted	$	(0.09)	$	(0.10)	$	0.04	$	(0.07)
Weighted average shares used in computing (loss) earnings per share:
Basic	413,437		412,956		412,698		413,254
Diluted	413,437		412,956		416,450		413,254

Stock-based compensation included in costs and operating expenses:
Cost of revenue	$	146	$	136	$	487	$	190
Product development and technology	6,829		8,029		22,952		25,327
Sales and marketing	10,273		4,766		11,665		15,999
General and administrative	15,398		16,107		40,938		49,304

See accompanying notes to condensed consolidated financial statements.

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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
Stock options exercised	204	—		560		—		560
Stock-based compensation	—	—		21,354		—		21,354
Vesting and settlement of restricted stock units	2,148	—		—		—		—
Common stock withheld related to net share settlement	(827)	—		(4,526)		—		(4,526)
Repurchases of Class A common stock	(1,663)	—		(8,920)		—		(8,920)
Issuance of common stock through employee stock purchase plan	161	—		649		—		649
Net income	—	—		—		58,786		58,786
Balance at June 30, 2023	396,672	$	40	$	2,288,370	$	(1,393,039)	$	895,371
Stock options exercised	1,138	—		3,118		—		3,118
Stock-based compensation	—	—		36,346		—		36,346
Vesting and settlement of restricted stock units	2,749	—		—		—		—
Common stock withheld related to net share settlement	(1,059)	—		(7,355)		—		(7,355)
Repurchases of Class A common stock	(1,138)	—		(7,712)		—		(7,712)
Net loss	—	—		—		(38,495)		(38,495)
Balance at September 30, 2023	398,362	$	40	$	2,312,767	$	(1,431,534)	$	881,273

See accompanying notes to condensed consolidated financial statements.

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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, 2021	400,562	$	40	$	2,247,347	$	(1,415,707)	$	831,680
Stock options exercised	749	—		3,699		—		3,699
Stock-based compensation	—	—		32,161		—		32,161
Vesting and settlement of restricted stock units	822	—		—		—		—
Common stock withheld related to net share settlement	(364)	—		(9,561)		—		(9,561)
Repurchases of Class A common stock	(5,637)	—		(83,765)		—		(83,765)
Net income	—	—		—		12,293		12,293
Balance at March 31, 2022	396,132	$	40	$	2,189,881	$	(1,403,414)	$	786,507
Stock options exercised	1,176	—		4,109		—		4,109
Stock-based compensation	—	—		33,466		—		33,466
Vesting and settlement of restricted stock units	1,059	—		—		—		—
Common stock withheld related to net share settlement	(459)	—		(4,727)		—		(4,727)
Net loss	—	—		—		(1,415)		(1,415)
Balance at June 30, 2022	397,908	$	40	$	2,222,729	$	(1,404,829)	$	817,940
Stock options exercised	245	—		1,271		—		1,271
Stock-based compensation	—	—		32,151		—		32,151
Vesting and settlement of restricted stock units	1,256	—		—		—		—
Common stock withheld related to net share settlement	(525)	—		(3,269)		—		(3,269)
Repurchases of Class A common stock	(2,819)	—		(17,956)		—		(17,956)
Net loss	—	—		—		(41,734)		(41,734)
Balance at September 30, 2022	396,065	$	40	$	2,234,926	$	(1,446,563)	$	788,403

See accompanying notes to condensed consolidated financial statements.

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GoodRx Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
(in thousands)	2023		2022
Cash flows from operating activities
Net income (loss)	$	17,001	$	(30,856)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	64,060		38,644
Amortization of debt issuance costs	2,539		2,562
Non-cash operating lease expense	3,022		2,314
Stock-based compensation expense	76,042		90,820
Change in fair value of contingent consideration	—		16,857
Deferred income taxes	(57,989)		(141)
Loss on operating lease assets	374		—
Loss on disposal of capitalized software	7,615		—
Loss on minority equity interest investment	4,008		—
Changes in operating assets and liabilities, net of effects of business acquisitions
Accounts receivable	(4,005)		(2,370)
Prepaid expenses and other assets	(29,867)		(3,137)
Accounts payable	14,515		(8,011)
Accrued expenses and other current liabilities	26,071		9,097
Operating lease liabilities	(1,460)		(3,415)
Other liabilities	498		2,537
Net cash provided by operating activities	122,424		114,901
Cash flows from investing activities
Purchase of property and equipment	(634)		(3,817)
Acquisitions, net of cash acquired	—		(156,853)
Capitalized software	(42,260)		(36,107)
Investment in minority equity interest	—		(15,007)
Net cash used in investing activities	(42,894)		(211,784)
Cash flows from financing activities
Payments on long-term debt	(5,272)		(5,272)
Repurchases of Class A common stock	(26,149)		(101,721)
Proceeds from exercise of stock options	4,385		9,110
Employee taxes paid related to net share settlement of equity awards	(15,403)		(17,557)
Proceeds from employee stock purchase plan	649		—
Net cash used in financing activities	(41,790)		(115,440)
Net change in cash and cash equivalents	37,740		(212,323)
Cash and cash equivalents
Beginning of period	757,165		941,109
End of period	$	794,905	$	728,786
Supplemental disclosure of cash flow information
Non cash investing and financing activities:
Stock-based compensation included in capitalized software	$	9,921	$	6,958
Capitalized software included in accounts payable and accrued expenses and other current liabilities	5,789		4,247
Capitalized software transferred from prepaid assets	5,751		—

See accompanying notes to condensed consolidated financial statements.

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GoodRx Holdings, Inc.

Notes to Condensed Consolidated Financial Statements.

~~GoodRx Holdings, Inc.~~

~~Condensed Consolidated Statements of Stockholders’ Equity~~

(Unaudited)

Class A and Class B
Common Stock

Additional
Paid-in

Accumulated

Total
Stockholders'

(in thousands)

Shares

Amount

Capital

Deficit

Equity

Balance at December 31, 2021

400,562

$
40

$
2,247,347

$
(1,415,707
)

$
831,680

Stock options exercised

749

—

3,699

—

3,699

Stock-based compensation

—

—

32,161

—

32,161

Vesting of restricted stock units

822

—

—

—

—

Common stock withheld related to
   net share settlement

(364
)

—

(9,561
)

—

(9,561
)
Repurchases of Class A common stock

(5,637
)

—

(83,765
)

—

(83,765
)
Net income

—

—

—

12,293

12,293

Balance at March 31, 2022

396,132

$
40

$
2,189,881

$
(1,403,414
)

$
786,507

Stock options exercised

1,176

—

4,109

—

4,109

Stock-based compensation

—

—

33,466

—

33,466

Vesting of restricted stock units

1,059

—

—

—

—

Common stock withheld related to
   net share settlement

(459
)

—

(4,727
)

—

(4,727
)
Net loss

—

—

—

(1,415
)

(1,415
)
Balance at June 30, 2022

397,908

$
40

$
2,222,729

$
(1,404,829
)

$
817,940

Stock options exercised

245

—

1,271

—

1,271

Stock-based compensation

—

—

32,151

—

32,151

Vesting of restricted stock units

1,256

—

—

—

—

Common stock withheld related to
   net share settlement

(525
)

—

(3,269
)

—

(3,269
)
Repurchases of Class A common stock

(2,819
)

—

(17,956
)

—

(17,956
)
Net loss

—

—

—

(41,734
)

(41,734
)
Balance at September 30, 2022

396,065

$
40

$
2,234,926

$
(1,446,563
)

$
788,403

~~See accompanying Notes to Condensed Consolidated Financial Statements.~~

~~GoodRx Holdings, Inc.~~

~~Condensed Consolidated Statements of Stockholders’ Equity~~

~~(Unaudited)~~

Class A and Class B
Common Stock

Additional
Paid-in

Accumulated

Total
Stockholders'

(in thousands)

Shares

Amount

Capital

Deficit

Equity

Balance at December 31, 2020

391,660

$
39

$
2,101,773

$
(1,390,453
)

$
711,359

Stock options exercised

513

—

2,680

—

2,680

Stock-based compensation

—

—

48,254

—

48,254

Vesting of restricted stock units

608

—

—

—

—

Common stock withheld related to
   net share settlement

(324
)

—

(14,902
)

—

(14,902
)
Net income

—

—

—

1,668

1,668

Balance at March 31, 2021

392,457

$
39

$
2,137,805

$
(1,388,785
)

$
749,059

Stock options exercised

2,609

—

13,291

—

13,291

Stock-based compensation

—

—

42,366

—

42,366

Vesting of restricted stock units

631

—

—

—

—

Common stock withheld related to
   net share settlement

(304
)

—

(11,383
)

—

(11,383
)
Net income

—

—

—

31,061

31,061

Balance at June 30, 2021

395,393

$
39

$
2,182,079

$
(1,357,724
)

$
824,394

Stock options exercised

2,733

—

14,135

—

14,135

Stock-based compensation

—

—

42,593

—

42,593

Vesting of restricted stock units

985

—

—

—

—

Common stock withheld related to
   net share settlement

(430
)

—

(16,657
)

—

(16,657
)
Net loss

—

—

—

(18,069
)

(18,069
)
Balance at September 30, 2021

398,681

$
39

$
2,222,150

$
(1,375,793
)

$
846,396

~~See accompanying Notes to Condensed Consolidated Financial Statements.~~

~~GoodRx Holdings, Inc.~~

~~Condensed Consolidated Statements of Cash Flows~~

~~(Unaudited)~~

Nine Months Ended
September 30,

(in thousands)

2022

2021

Cash flows from operating activities

Net (loss) income

$
(30,856
)

$
14,660

Adjustments to reconcile net (loss) income to net cash provided by
operating activities:

Depreciation and amortization

38,644

23,891

Amortization of debt issuance costs

2,562

2,586

Non-cash operating lease expense

2,314

2,451

Stock-based compensation expense

90,820

127,182

Change in fair value of contingent consideration

16,857

—

Deferred income taxes

(141
)

(33,217
)
Loss on abandonment of operating lease assets

—

1,430

Changes in operating assets and liabilities, net of effects of business acquisitions

Accounts receivable

(2,370
)

(24,380
)
Prepaid expenses and other assets

(3,137
)

5,696

Accounts payable

(8,011
)

4,322

Accrued expenses and other current liabilities

9,097

5,311

Operating lease liabilities

(3,415
)

(1,501
)
Other liabilities

2,537

538

Net cash provided by operating activities

114,901

128,969

Cash flows from investing activities

Purchase of property and equipment

(3,817
)

(3,764
)
Acquisitions, net of cash acquired

(156,853
)

(140,268
)
Capitalized software

(36,107
)

(21,434
)
Investment in minority equity interest

(15,007
)

(4,008
)
Net cash used in investing activities

(211,784
)

(169,474
)
Cash flows from financing activities

Payments on long-term debt

(5,272
)

(5,272
)
Payment for contingent consideration

—

(832
)
Repurchases of Class A common stock

(101,721
)

—

Proceeds from exercise of stock options

9,110

29,715

Employee taxes paid related to net share settlement of equity awards

(17,557
)

(42,674
)
Net cash used in financing activities

(115,440
)

(19,063
)
Net change in cash, cash equivalents and restricted cash

(212,323
)

(59,568
)
Cash, cash equivalents and restricted cash

Beginning of period

941,109

971,591

End of period

$
728,786

$
912,023

Supplemental disclosure of cash flow information

Non cash investing and financing activities:

Right-of-use assets obtained in exchange for new operating lease liabilities

$
2,311

$
523

Stock-based compensation included in capitalized software

6,958

6,031

~~See accompanying Notes to Condensed Consolidated Financial Statements.~~

~~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 ~~subscriptions, pharma~~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 accordance 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, ~~2021~~2022 and the related notes, which are included in our Annual Report on Form 10-K filed with the SEC on March 1, 2023 ("2022 ~~("2021~~ 10-K"). The December 31, ~~2021~~2022 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 and nine months ended September 30, ~~2022~~2023 are not necessarily indicative of the results expected for the full year ending December 31, ~~2022.~~

~~Our~~2023.

There have been no material changes in significant accounting policies ~~are discussed~~during the nine months ended September 30, 2023 from those disclosed in “Note 2. Summary of Significant Accounting Policies” in the notes to our consolidated financial statements included in our ~~2021~~2022 10-K. There have been no material changes in accounting policies during the nine months ended September 30, 2022 from those disclosed in the notes to our consolidated financial statements included in our 2021 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. Results of businesses acquired are included in our condensed consolidated financial statements from their respective dates of acquisition.

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, including the impact of a grocery chain that previously did not accept discounted pricing for a subset of prescription drugs from our PBMs starting late in the first quarter of 2022 ("grocer issue"); macroeconomic events and conditions, including the consideration of the economic impact of COVID-19; 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. Although the grocer issue was addressed in August 2022 and our discounted pricing ~~is currently~~has since been consistently welcomed at the point of sale by the grocery chain, the sustained effects of the grocer issue on our business, future results of operations and financial condition continue to be ~~difficult to~~an estimate ~~because there are~~with several variables that are ~~highly~~ uncertain, including, among

others, consumer response to updated consumer pricing and timing and extent of returning user ~~levels that have yet to be determined.~~

levels.

Table of Contents

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.

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 $~~642.5~~ ~~million and $852.5~~$642.5 million at September 30, ~~2022~~2023 and December 31, ~~2021, respectively, are~~2022 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 September 30, ~~2022,~~ ~~one~~ ~~customer~~2023, two customers accounted for ~~approximately~~ 13%13% and 12% of our revenue. For the three months ended September 30, ~~2021,~~ 2022, one customer accounted for 13% of our revenue. For the nine months ended September 30, 2023, two customers accounted for ~~approximately~~ 14%14% and 10%11% of our revenue. For the nine months ended September 30, 2022, one customer accounted for ~~approximately~~ 13~~% of our revenue. For the nine months ended September 30, 2021,~~ ~~three~~ ~~customers accounted for approximately~~ 13%, 12~~% and~~ 10%13% of our revenue. At September 30, ~~2022 and December 31, 2021,~~ 2023, no customer accounted for more than 10%10% of our accounts receivable balance.

At December 31, 2022, one customer accounted for 13% 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%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")~~ Topic 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 impairment losses on one of our minority equity interest investments of $2.2 million and $4.0 million during the three and nine months ended September 30, 2023, respectively, and presented it as other expense on our accompanying condensed consolidated statements of operations. We otherwise have not recognized any changes resulting from observable price changes or impairment losses on our minority equity interest investments during the three and nine months ended September 30, 2023 and 2022. Equity investments included in other assets on our accompanying condensed consolidated balance sheets as of September 30, ~~2022~~2023 and December 31, ~~2021 are $19.0~~2022 was $15.0 million and $~~4.0~~$19.0 million, respectively. ~~We did not recognize any changes resulting from observable price changes or impairment loss during the three and nine months ended September 30, 2022.~~

Recent Accounting ~~Pronouncements~~

~~Recently Adopted Accounting Pronouncements~~

Pronouncement

In ~~October 2021,~~June 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ~~(“ASU”~~("ASU") ~~2021-08,~~ ~~Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606,~~ ~~Revenue from Contracts with Customers~~ (“ASC 606”). Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, at fair value on the acquisition date. This ASU results in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under ASC 606. The amendments in this ASU do not affect the accounting for other assets or liabilities that may arise from revenue contracts with customers in accordance with ASC 606, such as refund liabilities, or in a business combination, such as customer-related intangible assets and contract-based intangible assets. The new guidance is effective for us for annual and interim periods beginning after December 15, 2022. Early adoption of this ASU is permitted, including adoption in an interim period. This update should be applied prospectively to business combinations occurring on or after the effective date of the amendments. We early adopted this guidance on January 1, 2022, and the adoption did not have a material impact to our consolidated financial statements.

~~In March 2020, the FASB issued ASU 2020-04,~~ ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting~~. The ASU provides optional guidance for a limited period of time to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The ASU applies only to contracts, hedging relationships and other transactions that reference LIBO Screen Rate or another reference rate expected to be discontinued because of the reference rate reform. The amendments in this ASU were effective upon issuance and may be applied through December 31, 2022. We adopted this guidance on January 1, 2022, and the adoption did not have a material impact to our consolidated financial statements. We intend to apply this guidance for contract modifications related to the reference rate reform as they occur through December 31, 2022.

~~Recently Issued Accounting Pronouncements - Not Yet Adopted~~

~~In June 2022, the FASB issued ASU~~ 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ("("Topic 820"), which clarifies the guidance when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. ~~The~~This guidance is effective for annual periods beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption of this ASU is permitted. This ASU should be applied prospectively and recognize in earnings on the adoption date any adjustments made as a result of adoption. We ~~are currently evaluating~~early adopted this guidance effective January 1, 2023, and the adoption did not have an impact ~~of the new guidance~~ to our consolidated financial ~~statements.~~statements and disclosures.

3. Business Combinations

vitaCare Prescription Services, Inc.

On April 14, 2022,, we acquired all of the equity interests of vitaCare Prescription Services, Inc. (“vitaCare”) ~~from TherapeuticsMD, Inc. (the "Seller")~~, ~~the sole stockholder of vitaCare for an initial cash payment of approximately $150.0~~ ~~million, subject to customary adjustments, and additional payment or adjustment for contingent consideration payable of up to $7.0~~ ~~million in cash and contingent consideration receivable based upon vitaCare's achievement of certain specified revenue described further below. We incurred a total of $1.6~~ million of transaction costs associated with this acquisition during 2022 consisting primarily of professional fees which were expensed as incurred and included within general and administrative expenses of our condensed consolidated statement of operations. vitaCare is a prescription technology and ~~service~~services platform, ~~that simplifies the prescription fulfillment process~~ for ~~consumers taking brand medications~~a total purchase consideration of $131.8 million, inclusive of $149.9 million in cash, offset by ~~helping them gain access to therapies and stay on those therapies for~~contingent considerations with a net estimated acquisition-date fair value of $18.1 million. We acquired vitaCare as ~~long as medically appropriate. The purpose of the acquisition was to~~we believed it would strengthen and expand ~~the services currently available under~~ our ~~existing~~business capabilities with respect to our pharma manufacturer solutions platform.

~~We accounted for the vitaCare acquisition using the acquisition method of accounting in accordance with ASC 805,~~ ~~Business Combinations~~ and recorded tangible and intangible assets acquired and liabilities assumed at their estimated fair values as of the acquisition date. The estimated fair values of the acquired intangible assets are determined primarily by using a discounted cash flow method which is a non-recurring fair value measurement based on Level 3 inputs. Goodwill is measured as the excess of purchase consideration over the estimated fair value of tangible and intangible assets acquired and liabilities assumed. The goodwill ~~recorded~~recognized in connection with this acquisition primarily ~~relates~~related to the expected long-term synergies and other benefits from the acquisition, including the acquired assembled workforce, and is ~~expected to be~~ tax deductible. The aggregate purchase consideration was principally allocated to goodwill of $80.6 million and other intangible assets of $52.0 million. Other intangible assets principally related to developed technology of $30.0 million and customer relationships of $21.0 million with estimated useful lives of five and eleven years, respectively.

Table of Contents

The contingent considerations recognized in connection with the vitaCare acquisition ~~date~~consisted of a contingent consideration receivable and a contingent consideration payable with estimated acquisition-date fair values of approximately $19.7 million and $1.7 million, respectively. As of September 30, 2023 and December 31, 2022, the fair value of the contingent consideration ~~payable and~~ receivable ~~associated with~~was zero as the ~~business combination are based on the amounts of the consideration expected to be transferred or received using significant inputs that are not observable~~contingency was resolved in the ~~market (Level 3 inputs). The contingent consideration payable and receivable are remeasured to their estimated fair values on a recurring basis. Changes in the estimated fair values~~year of ~~the contingent consideration payable and receivable, if any, are recorded within general and administrative expenses in our condensed consolidated statements of operations.~~

The acquisition method of accounting for vitaCare remains incomplete with respect to the acquired intangible assets, contingent consideration receivable and payable, as we continue to gather and evaluate information about circumstances that existed as of the acquisition date. The activities we are currently undertaking, include, but are not limited to, the following: review and evaluation of third-party valuations that assist us in determining the estimated fair values of the acquired intangible assets, contingent consideration receivable and payable, which have been measured based on preliminary estimates using assumptions that we believe are reasonable, utilizing information that is currently available. Measurement period adjustments, if any, will be recognized in the reporting period in which the adjustment amounts are determined within twelve months from the acquisition date.

~~We also established a management incentive plan under which certain continuing vitaCare employees are eligible to receive up to $10.0~~ million of additional cash compensation upon achievement of certain performance milestones through 2023. This management incentive plan has been accounted for separately from the business combination, excluded from the estimated purchase consideration, and is recognized as post-combination expense over the performance period to the extent the specified performance milestones are probable of being met.

~~The components of the estimated purchase consideration for vitaCare are as follows:~~

(in thousands)

Cash
$
149,877

Fair value of contingent consideration payable

1,684

Fair value of contingent consideration receivable

(19,741
)
Total estimated purchase consideration
$
131,820

~~The preliminary allocation of the estimated purchase consideration for vitaCare is as follows:~~

(in thousands)

Accounts receivable
$
433

Prepaid expenses and other current assets

50

Property and equipment

255

Intangible assets

52,000

Accounts payable

(752
)
Accrued expenses and other current liabilities

(780
)
Goodwill

80,614

Total estimated purchase consideration
$
131,820

~~The preliminary amounts assigned to the acquired intangible assets and their estimated useful lives are as follows:~~

(dollars in thousands)
Fair
Value

Weighted Average Useful Life
(in years)

Developed technology
$
30,000

5.0

Customer relationships

21,000

11.0

Tradename

1,000

3.0

$
52,000

7.4

~~Contingent Consideration Payable~~ -acquisition. The contingent consideration payable of up to $~~7.0~~$7.0 million in cash is based upon vitaCare's achievement of certain specified revenue results through the end of 2023 as stipulated by the purchase agreement. ~~The estimated fair value of the contingent consideration payable is based on the present value of the expected future payments to be made to the Seller using an option pricing model.~~ As of September 30, 2023 and December 31, 2022, no future contingent payments ~~are~~were expected to be made to the Seller as vitaCare's achievement of the specified revenue results through 2023 are no longer probable of being met. The change in the fair value of the contingent consideration payable of approximately $~~1.8~~ ~~million and $1.7~~ million for the three and nine months ended September 30, 2022, respectively, were recorded within general and administrative expenses in our accompanying condensed consolidated statements of operations.

~~Contingent Consideration Receivable~~ - vitaCare entered into a commercial agreement with the Seller in connection with the acquisition. In accordance with the terms and conditions of the commercial agreement, the Seller is required to compensate vitaCare for certain pharmacy services over an initial 5-year term following the acquisition, with annual minimum guaranteed payments over the 5-year term totaling $~~66.3~~ million. The estimated fair value of the contingent consideration receivable at the acquisition date and as of June 30, 2022 were based on the present value of the expected future annual minimum guaranteed payments in excess of the estimated fair value of pharmacy services expected to be provided to the Seller for each respective year over the initial 5-year term and contains significant unobservable inputs (Level 3 inputs). Key inputs used in this estimate include projected revenue and a discount rate which incorporate the risk of achievement associated with the forecasts and the credit risk of the Seller. Significant changes in the projected revenue or discount rate would result in a significantly higher or lower fair value measurement. As of September 30, 2022, the fair value of the contingent consideration receivable was remeasured based on a probability weighting certain scenarios which incorporates the increased risk of collectability of the contingent consideration principally due to certain events that occurred during the three months ended September 30, 2022 with respect to the Seller's financing activities that we believe cast substantial doubt on the Seller's ability to pay. Scenarios in the fair value remeasurement include (i) the Seller is no longer able to pay the contingent consideration, and (ii) the Seller obtains sufficient funding to pay the obligations and achieves the projected revenue over the 5-year term. The key inputs used in this estimate are the probabilities applied to the above

~~two assumed scenarios. A significant change in the probability weighting would result in a significantly higher fair value measurement.~~

~~The following table shows a reconciliation of the beginning and ending fair value of the contingent consideration receivable during the three and nine months ended September 30, 2022:~~

made.

(in thousands)
Three Months Ended
September 30, 2022

Nine Months Ended
September 30, 2022

Beginning balance
$
19,632

$
—

vitaCare acquisition

—

19,741

Changes in fair value

(18,432
)

(18,541
)
Ending balance
$
1,200

$
1,200

The following table reflects the pro forma unaudited consolidated results of operations for the ~~periods presented~~three and nine months ended September 30, 2022 as if the acquisition of vitaCare had occurred on January 1, 2021. The pro forma unaudited consolidated results of operations give effect to certain adjustments including: (i) transaction and severance costs incurred in connection with the acquisition; (ii) amortization expense related to the acquired intangible assets; and (iii) elimination of vitaCare's allocated interest expense related to the ~~Seller's~~seller's financing agreement whereby vitaCare was released ~~from~~ as a guarantor upon the consummation of the acquisition. The pro forma unaudited consolidated results of operations are not necessarily indicative of the operating results that would have occurred if the acquisition had been consummated as of the date indicated, nor are they necessarily indicative of future operating results.


	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2022			2021			2022			2021			(in thousands)	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Pro forma revenue	$	187,318		$	195,299		$	583,016		$	532,784		Pro forma revenue	$	187,318	$	583,016
Pro forma net loss		(41,734	)		(26,719	)		(38,929	)		(11,544	)	Pro forma net loss	$	(41,734)	$	(38,929)

~~vitaCare's revenue~~

In August 2023, our board of directors (our "Board") approved a plan to de-prioritize certain solutions under our pharma manufacturer solutions offering, which, among others, included solutions supported by vitaCare. See "Note 12. Restructuring Plan" for ~~the three and nine months ended September 30, 2022 of $2.0~~ ~~million and $3.4~~ million, respectively, is included in our accompanying condensed consolidated statements of operations. Disclosure of the standalone earnings or loss of vitaCare is not practicable as expenses associated with significant back-office, product development and technology and go-to-market processes of the vitaCare business have been substantially integrated into our consolidated operations.

additional information.

flipMD, Inc.

On February 18, 2022, we acquired all of the equity interests of flipMD, Inc. ~~("flipMD") for $7.0~~ ~~million in cash, subject to customary closing adjustments. flipMD is~~, a marketplace connecting practicing physicians with organizations seeking on-demand medical expertise, and expands both our engagement with healthcare providers and services currently available under our existing pharma manufacturer solutions platform. Unaudited supplemental pro forma financial information and the revenue and earnings from the acquisition date through September 30, 2022 for ~~the flipMD acquisition has not been presented because the effects are not material to our condensed consolidated financial statements.~~

~~The acquisition method of accounting for the flipMD acquisition remains incomplete. Measurement period adjustments, if any, will be recognized~~$7.0 million in ~~the reporting period in which the adjustment amounts are determined within twelve months from the acquisition date.~~

cash.

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:


(in thousands)	September 30, 2023		December 31, 2022
Insurance recovery receivable (1)	$	10,000	$	—
Prepaid software implementation costs	—		5,751
Reimbursable third-party payments (2)	10,591		—
Income taxes receivable	3,462		4,524
Other prepaid expenses and other current assets (3)	28,994		35,105
Total prepaid expenses and other current assets	$	53,047	$	45,380

______________________

(1)

(in thousands)

September 30,
2022

December 31,
2021

Income taxes receivable

$
2,164

$
8,331

Prepaid expenses

25,352

21,307

Contingent consideration receivable

1,200

—

Total prepaid expenses and other current assets

$
28,716

$
29,638

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)Includes other current assets of $3.1 million as of September 30, 2023 and December 31, 2022.

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5. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:


(in thousands)	September 30, 2023		December 31, 2022
Accrued bonus and other payroll related (1)	$	27,188	$	20,642
Accrued marketing	13,120		12,104
Accrued legal settlement	13,000		1,500
Deferred revenue	8,338		7,879
Income taxes payable	6,736		—
Other accrued expenses	6,172		5,398
Total accrued expenses and other current liabilities	$	74,554	$	47,523

______________________

(1)

Includes a $5.1 million restructuring related liability for personnel related costs associated with actions taken to de-prioritize certain solutions under our pharma manufacturer solutions offering as of September 30, 2023. See "Note 12. Restructuring Plan."

(in thousands)

September 30,
2022

December 31,
2021

Accrued bonus and other payroll related

$
21,900

$
24,031

Accrued marketing

16,683

15,493

Deferred revenue

10,998

6,869

Other accrued expenses

11,444

4,339

Total accrued expenses and other current liabilities

$
61,025

$
50,732

Deferred revenue represents payments received in advance of providing services for ~~subscriptions and~~ certain advertising contracts with ~~customers.~~customers and subscriptions. We expect substantially all of the deferred revenue at September 30, ~~2022~~2023 will be recognized as revenue within the subsequent twelve months. Of the $~~6.9~~$7.9 million of deferred revenue at December 31, ~~2021, $0.7~~2022, $0.8 million and $~~6.5~~$7.8 million ~~were~~was recognized as revenue during the three and nine months ended September 30, ~~2022,~~2023, respectively. Revenue recognized during the three and nine months ended September 30, ~~2021~~2022 of $~~0.8~~$0.7 million and $~~6.5~~$6.5 million, respectively, was included as deferred revenue at December 31, ~~2020.~~

2021.

6. 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. In interim periods when a reliable estimate of the annual effective tax rate cannot be made, we calculate income taxes by applying the discrete effective tax rate method which treats the year-to-date period as if it were the annual period and determine the interim income taxes on that basis.

For the three and nine months ended September 30, 2022, we calculated interim income taxes by applying an estimated annual effective income tax rate to year-to-date income or loss before income taxes and by calculating the tax effect of discrete items recognized during such periods. For the three and nine months ended September 30, 2021, we calculated interim income taxes by applying the discrete effective tax rate method because a reliable estimate of the annual effective tax rate could not be made due to forecasted level of profitability for the year and significant permanent differences that could result in wide variability in income tax expense or benefit and, hence, the estimated annual effective tax rate.

The effective income tax rate ~~was (87.4%) and~~ ~~1,766.9~~% for the three months ended September 30, 2023 and 2022 was 17.4% and ~~2021,~~(87.4%), respectively. The effective income tax rate ~~was (66.9%) and~~ ~~191.4~~% for the nine months ended September 30, 2023 and 2022 was 155.0% and ~~2021,~~(66.9%), respectively. The primary differences between our effective income tax rates and the federal statutory tax rate for the three and nine months ended September 30, 2023 and 2022 ~~and 2021 are~~were due to the effects of non-deductible officers’ stock-based compensation expense, the valuation allowance on our net deferred tax assets, state income taxes, benefits from research and development tax credits, and ~~excess~~ tax ~~benefits~~effects from our equity awards. ~~The effective income tax rate for~~

We consider all available positive and negative evidence in our assessment of the ~~three and nine months ended September 30, 2022 was further impacted by the valuation allowance on~~recoverability of our net deferred tax ~~assets.~~

~~We consider all available evidence, both positive and negative in assessing the extent to which~~assets each reporting period. As of June 30, 2023, we determined that a valuation allowance should be applied against our net deferred tax assets. Due to cumulative three-year pre-tax losses adjusted for permanent adjustments, primarily from substantial excess tax benefits realized mainly in 2021 from the exercise of stock options granted prior to our initial public offering ("IPO"), we maintain a full valuation allowance against our net deferred tax assets was no longer required primarily due to sustained tax profitability (pre-tax earnings or loss adjusted by permanent book to tax differences) beginning in ~~excess~~2022 through the first half of 2023, which was objective and verifiable evidence, and anticipated future earnings. As a result, we released $55.9 million of our valuation allowance as a discrete tax ~~amortizable goodwill as~~benefit during the three months ended June 30, 2023. For the nine months ended September 30, 2023, we continued to experience tax profitability and anticipate future earnings. As of September 30, ~~2022.~~

2023, we continued to believe that a valuation allowance against the majority of our net deferred tax assets was not required as we believed it was more likely than not that our net deferred tax assets would be realized in the future, with the exception of certain separate filing states' net deferred tax assets and professional service corporations' net deferred tax assets.

When a change in valuation allowance is recognized during an interim period, the change in valuation allowance resulting from current year income is included in the annual effective tax rate and the release of valuation allowance supported by projections of future taxable income is recorded as a discrete tax benefit in the interim period. Our judgment regarding the need offor a valuation allowance may reasonably change in ~~the next twelve months. The exact timing and amount of any release of the valuation allowance is subject~~future reporting periods due to ~~change depending on~~many factors, including changes in the level of tax profitability that we achieve, changes in tax laws or regulations, and price fluctuations of our Class A common stock and its related future tax effects ~~on future excess tax benefits~~ from our outstanding ~~stock options.~~

~~As of December 31, 2021, we had unrecognized tax benefits of $14.8~~ ~~million, of which approximately $5.1~~ ~~million of unrecognized tax benefits, if recognized, would impact the effective income tax rate. The remaining $9.7~~ million of unrecognized tax benefits would not impact the effective income tax rate to the extent that we continue to maintain a full valuation allowance against our net deferred tax assets. There were no significant changes to our unrecognized tax benefits during the three and nine months ended September 30, 2022, and we do not expect to have any significant changes to unrecognized tax benefits through the end of 2022.

~~On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA contains a number of revisions to the Internal Revenue Code, including a~~ 15~~% corporate minimum income tax and a~~ 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022. We are in the process of evaluating the provisions of the IRA, but we do not currently believe the IRA will have a material impact on our financial results.

equity awards.

7. Debt

~~We have~~

Our First Lien Credit Agreement (as amended from time to time, the "Credit Agreement") provides for (i) a $700.0 million term loan ~~with an original principal amount of $700.0~~ ~~million (the “First~~maturing on October 10, 2025 (“First Lien Term Loan Facility”); and (ii) a revolving credit facility for up to $100.0 million maturing on October 11, 2024 (the “Revolving Credit Facility”). On June 29, 2023 and July 7, 2023, we amended our Revolving Credit Facility and First Lien Term Loan Facility, respectively, to replace London Interbank Offered Rate (“LIBOR”)

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with Secured Overnight Financing Rate (“SOFR”) as the benchmark interest rate for borrowings under our ~~first lien credit agreement (the “First~~Revolving Credit Facility and First Lien Term Loan Facility, beginning in July 2023. The First Lien Term Loan Facility and Revolving Credit ~~Agreement”) obtained through our wholly owned subsidiary, GoodRx, as borrower and~~Facility are collateralized by substantially all of our assets and ~~100~~%100% of the equity interest of GoodRx.~~The~~

First Lien Term Loan Facility

Up to and including June 30, 2023, borrowings under our First Lien Term Loan Facility ~~requires~~ ~~quarterly~~ ~~payments through September 2025, with any unpaid principal and interest due upon maturity in October 2025,~~ ~~and bears~~accrued interest at ~~a rate per annum equal to the LIBO Screen Rate~~an adjusted LIBOR plus a variable margin based on our most recently determined First Lien Net Leverage Ratio (as defined in the Credit Agreement), ranging from ~~2.75~~%2.75% to ~~3.00~~%3.00%. Beginning in July 2023, borrowings under our First Lien Term Loan Facility bear interest, at our option, at either (i) a term rate based on SOFR (“Term SOFR”) plus an adjustment ranging from 0.10% to 0.25% based on the term of the interest rate period plus a margin ranging from 2.75% to 3.00%; or (ii) an alternate base rate plus a margin ranging from 1.75% to 2.00%, both depending on our First Lien Net Leverage Ratio (as defined in the Credit Agreement). The effective interest rate on the First Lien Term Loan Facility for the three months ended September 30, 2023 and 2022 was 8.80% and ~~2021 was~~ ~~5.50% and~~ ~~3.41~~%5.50%, respectively. The effective interest rate on the First Lien Term Loan Facility for the nine months ended September 30, 2023 and 2022 was 8.33% and ~~2021 was~~ ~~4.31% and~~ ~~3.40~~%4.31%, respectively.

The First Lien Term Loan Facility requires quarterly principal payments through September 2025, with any remaining unpaid principal and any accrued and unpaid interest due upon maturity. We ~~also have a line of credit with a maximum principal amount of $100.0~~ ~~million (the “Revolving~~may prepay the First Lien Term Loan Facility without penalty.

Revolving Credit ~~Facility”) which matures in~~ ~~October 2024~~ ~~and bears interest at LIBO Screen Rate plus rates ranging from~~ ~~2.50% to~~ ~~3.00% on used amounts and~~ ~~0.25% to~~ ~~0.50% on unused amounts. There are~~ Facility

We had no borrowings ~~outstanding~~against the Revolving Credit Facility as of September 30, 2023 and December 31, 2022. ~~The~~Beginning in July 2023, borrowings under our Revolving Credit Facility, if any, bear interest, at our option, at either (i) Term SOFR plus a margin ranging from 2.50% to 3.00%; or (ii) an alternate base rate plus a margin ranging from 1.50% to 2.00%, each with the applicable margin dependent on our First Lien Net Leverage Ratio (as defined in the Credit Agreement). We incur a commitment fee ranging from 0.25% to 0.50% per annum, depending on our First Lien Net Leverage Ratio (as defined in the Credit Agreement), on any unused commitments.

We had outstanding letters of credit issued ~~total $9.2~~against the Revolving Credit Facility for $9.2 million as of September 30, 2023 and December 31, 2022, which ~~reduce~~reduced our available borrowings under the Revolving Credit Facility.

Our debt ~~consists of the following:~~

(in thousands)

September 30,
2022

December 31,
2021

Principal balance under First Lien Term Loan Facility

$
668,825

$
674,097

Less: Unamortized debt issuance costs and discounts

(8,982
)

(11,210
)

$
659,843

$
662,887

balance is as follows:


(in thousands)	September 30, 2023		December 31, 2022
Principal balance under First Lien Term Loan Facility	$	661,796	$	667,068
Less: Unamortized debt issuance costs and discounts	(6,038)		(8,243)
	$	655,758	$	658,825

The estimated fair value of our debt ~~approximated its carrying value as of December 31, 2021,~~was $660.1 million and ~~is approximately $633.7~~$649.6 million as of September 30, ~~2022. The estimated fair value is~~2023 and December 31, 2022, respectively, based on inputs categorized as Level 2 in the fair value hierarchy.

~~As of September 30, 2022,~~

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 and other nonfinancial ~~covenants under the First Lien Credit Agreement.~~covenants. Additionally, GoodRx is restricted from making dividend payments, loans or advances to us. At September 30, ~~2022,~~2023, we ~~are~~were in compliance with our covenants.

8. Commitments and Contingencies

Aside from the below, as of September 30, ~~2022,~~2023, there ~~are~~were no material changes to our commitments and contingencies as disclosed in the notes to our consolidated financial statements included in our ~~2021~~2022 10-K.

~~Legal Contingencies~~

On December 18, 2020, R. Brian Terenzini, 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. 2:20-cv-11444). On January 8, 2021, Bryan Kearney, individually and on behalf of all others similarly situated, also 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. 2:21-cv-00175). The plaintiffs seek compensatory damages as well as interest, fees and costs. The complaints allege violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and assert that we failed to disclose to investors that Amazon.com, Inc. was developing its own mobile and online prescription medication ordering and fulfillment service that would compete directly with us. According to the complaints, when Amazon announced its competitor service, our stock price fell, causing investor losses. Lead plaintiff applications were submitted February 16, 2021, and on April 8, 2021, the court consolidated the ~~two~~ lawsuits under the caption In re GoodRx Holdings, Inc. (Case No. 2:20-cv-11444) and appointed Betty Kalmanson, Lawrence Kalmanson, Shawn Kalmanson, and Janice Kasbaum as Lead Plaintiffs. On June 7, 2021, Lead Plaintiffs filed a consolidated complaint containing substantially similar factual allegations as the prior complaints, but adding claims under Section 11 of the Securities Act of 1933. We filed a motion to dismiss the consolidated case on August 6, 2021, and Lead Plaintiffs subsequently filed an omnibus opposition to our motion to dismiss on October 5, 2021. We subsequently filed a reply in support of notice of motion and motion to dismiss. The court granted our motion to dismiss on January 2, 2022. The Lead Plaintiffs filed an amended complaint on February 7, 2022, and we filed a motion to dismiss the amended complaint on

March 10, 2022. The Lead Plaintiffs filed a response to file an opposition to our motion to dismiss the amended complaint on April 14, 2022 and we filed a response on May 4, 2022. On June 9, 2022, the court granted our motion; the complaint was dismissed with prejudice and the case was subsequently closed during the three months ended September 30, 2022.

On April 29, 2021, May 5, 2021 and September 15, 2021, Neesha Patel, Wayne Geist and Alan Pinyavat, respectively, each filed a derivative lawsuit purportedly on behalf of us against certain of our officers and directors in the United States District Court for the Central District of California (Case No. 2:21-cv-03671, Case No. 2:21-cv-03829 and Case No. 1:21-cv-01309, respectively). The plaintiffs assert claims for breach of fiduciary duty and contribution under the Exchange Act. Neesha Patel asserts additional claims for unjust enrichment and corporate waste and Alan Pinyavat asserts additional claims for unjust enrichment, abuse of control and gross mismanagement. These claims are based on allegations substantially similar to those in the class action lawsuit described above. On August 12, 2022, Alan Pinyavat filed a notice of voluntary dismissal and the case was subsequently closed during the three months ended September 30, 2022. On August 24, 2022, the parties for the consolidated Patel and Geist case filed a joint stipulation to dismiss the consolidated case and the case was subsequently closed during the three months ended September 30, 2022.

~~Based upon information presently known to our management, we have not accrued a loss for the class action and derivative lawsuits described above as the possibility of loss is remote.~~

In March 2020, we received a letter from the Federal Trade Commission ("FTC") indicating its intent to investigate our privacy and security practices to determine whether such practices comply with Section 5 of the FTC Act. In April 2020, the FTC sent an initial request for information to us regarding our sharing of data regarding individuals’ use of our website, app and services with service providers, including Google and Facebook. Since April 2020, we have timely responded to the FTC’s information requests and follow-up questions. On October 14, 2021, staff at the FTC notified us that they intended to recommend that the agency pursue an enforcement action against us and certain of our officers and employees. On January 12, 2022, staff at the FTC sent us an initial draft complaint and consent order. Notwithstanding our belief that we ~~have~~ complied with applicable regulations and ~~have~~had meritorious defenses to any claims or assertions to the contrary, on February 1, 2023, we ~~are negotiating~~reached a negotiated settlement with the FTC ~~in an effort~~(a "proposed consent order") to resolve all claims and allegations arising out of or relating to the FTC ~~investigation. Settlement with~~investigation which included a monetary settlement amount of $1.5 million that was accrued as of December 31, 2022 and paid during the ~~FTC, and/~~three months ended March 31, 2023. The proposed consent order was filed in the United States District Court for the Northern District of California ("NDCA") and was approved and entered on February 17, 2023. The consent order also includes agreements to effect or ~~related litigation with other parties, could include monetary costs and/or~~maintain, as applicable, certain changes to our business practices, policies and compliance requirements that may impose additional costs ~~to us. These costs may~~that we do not believe will be material both individually and in the ~~aggregate.~~ aggregate to us.

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

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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 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 and is scheduled to be heard on November 21, 2023. In addition, the court referred the parties to mediation and the parties have a meeting planned to discuss the mediation schedule on November 28, 2023.

In addition, 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 and 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, 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 and the SDFL has scheduled a final approval hearing for March 7, 2024. 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 is expected to hold a hearing on November 14, 2023.

Based on ~~ongoing discussions with~~ the ~~FTC and ongoing~~proposed settlement ~~proposals,~~agreement, we have determined that a loss is probable and have accrued a reasonable estimate of the loss of $~~2.8~~$13.0 million during the ~~second~~third quarter of ~~2022,~~2023, which iswas included ~~as a component of~~in accrued expenses and other current liabilities onin the accompanying condensed consolidated balance sheet as of September 30, ~~2022.~~2023. 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 ~~FTC’s position with respect~~court. This pending proceeding involves complex questions of fact and law and may require the expenditure of significant funds and the diversion of other resources to ~~the ongoing settlement negotiations. No assurance can be given regarding the ultimate outcome~~defend. The results of ~~this matter. Actual loss can be significantly greater or less than our estimated accrual. In the event~~legal proceedings are inherently uncertain, and upon final resolution of these matters, it is reasonably possible that the ~~FTC investigation results in a settlement payment by us, or a judgment against us, in an amount significantly in excess of~~actual loss may differ from our ~~accrual, the resulting liability could have a material adverse effect upon our financial condition, results of operations and liquidity.~~

estimate.

In addition, during the normal course of business, we may become subject to, and are presently involved in, legal proceedings, claims and ~~litigation.~~litigations. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. We have not accrued for a loss for any other matter as a loss is not probable and a loss, or a range of loss, is not reasonably estimable. Accruals for loss contingencies are ~~recorded~~recognized when a loss is probable, and the amount of such loss can be reasonably estimated.

See "Note 5. Accrued Expenses and Other Current Liabilities." Loss recoveries are recognized when a loss has been incurred and the recovery is probable. See "Note 4. Prepaid Expenses and Other Current Assets."

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9. Revenue

~~Revenue consist of~~For the three and nine months ended September 30, 2023 and 2022, revenue comprised the following:

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in thousands)

2022

2021

2022

2021

Prescription transactions revenue

$
131,216

$
155,652

$
421,126

$
434,570

Subscription revenue

26,450

16,226

71,545

42,549

Pharma manufacturer solutions revenue (1)

24,499

18,548

74,519

41,060

Other revenue

5,153

4,676

15,255

13,989

Total revenue

$
187,318

$
195,102

$
582,445

$
532,168


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Prescription transactions revenue	$	135,427	$	131,216	$	406,874	$	421,126
Pharma manufacturer solutions revenue (1)	15,897		24,499		60,662		74,519
Subscription revenue	23,240		26,450		71,261		71,545
Other revenue	5,394		5,153		14,824		15,255
Total revenue	$	179,958	$	187,318	$	553,621	$	582,445

______________________

(1)

~~Represents revenue from pharma manufacturers and other customers primarily for advertising, including integrating onto our platform their affordability solutions to our consumers.~~ Pharma manufacturer solutions revenue ~~is disclosed separately from other revenue beginning~~for the three and nine months ended September 30, 2023 included a $10.0 million contract termination payment to a pharma manufacturer solutions client in ~~the first quarter~~connection with our restructuring activities, which was recognized as a reduction of ~~2022. Prior period amounts have been recast to conform with the current period presentation.~~revenue. See "Note 12. Restructuring Plan" for additional information.

10. Stockholders' Equity

Share Repurchases

On February 23, 2022, our ~~board of directors~~Board authorized the repurchase of up to an aggregate of $~~250.0~~$250.0 million of our Class A common stock through February 23, 2024 (the "repurchase program"). Repurchases under the repurchase program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at our discretion, depending on market conditions and corporate ~~needs. Open market repurchases will be structured~~needs, or under a trading plan intended to ~~occur in accordance with applicable federal securities laws, including within~~satisfy the ~~pricing and volume requirements~~affirmative defense conditions of Rule ~~10b-18~~10b5-1(c)(1) under the ~~Securities~~ Exchange Act ~~of 1934, as amended. We may also, from time to time, enter into Rule~~(a "Rule 10b5-1 ~~plans to facilitate repurchases of our shares under this authorization.~~Plan"). This repurchase program does 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~~Board. As of ~~directors.~~

~~During the three months ended~~ September 30, ~~2022,~~2023, we ~~repurchased and retired~~ ~~2.8~~ ~~million shares of our Class A common stock for an aggregate purchase price of $18.0~~ ~~million under the repurchase program. During the nine months ended September 30, 2022, we repurchased and retired~~ ~~8.5~~ ~~million shares of our Class A common stock for an aggregate purchase price of $101.7~~ ~~million under the repurchase program. We have $148.3~~had $122.1 million available for future repurchases of our Class A common stock under the repurchase ~~program~~program.

The following table presents information about our repurchases of our Class A common stock:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Number of shares repurchased	1,138		2,819		4,371		8,456
Cost of shares repurchased	$	7,712	$	17,956	$	26,149	$	101,721

Former Co-Chief Executive Officers and Interim Chief Executive Officer

On April 25, 2023, Trevor Bezdek and Douglas Hirsch transitioned from our co-Chief Executive Officers to Chairman of the Board and Chief Mission Officer, respectively, in addition to continuing as directors of our Board (the “Transition”). Pursuant to their restated employment agreements as a result of the Transition, Messrs. Bezdek and Hirsch have agreed not to sell their ownership of any of our common stock without approval from our Board, subject to certain exceptions including, but not limited to, pursuant to any new, modified or amended contract, instruction or written plan intended as a Rule 10b5-1 Plan that has been approved or will be approved by our Board after April 25, 2023 or an existing Rule 10b5-1 Plan as of ~~September 30, 2022.~~

such date.

~~11. Stock-Based Compensation~~

~~Stock Options~~

In connection with the Transition, our Board appointed Scott Wagner as our Interim Chief Executive Officer (principal executive officer), effective April 25, 2023. Pursuant to Mr. Wagner's employment agreement, Mr. Wagner was eligible to receive, amongst other compensation terms and conditions, a stock option award covering between 2.5 million and 3.0 million shares of our Class A ~~summary~~common stock, with the final number determined by our Board in its sole discretion. On May 12, 2023, our Board granted Mr. Wagner a stock option award covering 3.0 million shares of our Class A common stock. The grant date fair value of the stock option ~~activity is as follows:~~

Weighted

Weighted

Average

Average

Remaining

Aggregate

Exercise

Contractual

Intrinsic

(in thousands, except per share amounts and term information)

Shares

Price

Term

Value

Outstanding at December 31, 2021

13,568

$
7.55

7.3 years

$
341,929

Granted

1,163

17.17

Exercised

(749
)

4.94

Expired / Cancelled / Forfeited

(281
)

16.80

Outstanding at March 31, 2022

13,701

$
8.32

7.0 years

$
165,307

Granted

3,782

6.69

Exercised

(1,176
)

3.49

Expired / Cancelled / Forfeited

(386
)

9.47

Outstanding at June 30, 2022

15,921

$
8.26

7.9 years

$
8,326

Granted

2,635

6.10

Exercised

(245
)

5.18

Expired / Cancelled / Forfeited

(607
)

11.70

Outstanding at September 30, 2022

17,704

$
7.86

7.9 years

$
5,395

Exercisable at September 30, 2022

7,492

$
6.65

6.3 years

$
5,395

~~The weighted average grant date fair value per share~~award was $9.6 million, which vests and becomes exercisable in twelve substantially equal installments on each monthly anniversary of ~~stock options granted for the three and nine months ended September 30, 2022 was $4.24~~ ~~and $5.41, respectively.~~

~~For the three months ended September 30, 2022 and 2021, the stock-based compensation expense related to stock options was $3.2~~ ~~million and $3.0~~ ~~million, respectively. For the nine months ended September 30, 2022 and 2021, the stock-based compensation expense related to stock options was $8.8~~ ~~million and $11.1~~ ~~million, respectively. At September 30, 2022, there is $48.3~~ ~~million of total unrecognized stock-based compensation cost related to stock options, which is expected to be recognized over a weighted average remaining service period of~~ ~~3.0~~ ~~years.~~

~~Restricted Stock Awards and Restricted Stock Units~~

~~A summary of the Restricted Stock Awards and Restricted Stock Units (“RSUs”) activity is as follows:~~

Restricted

Restricted
Stock Units
for Class A

Restricted
Stock Units
for Class B

Weighted
Average

Stock

Common

Common

Grant Date

(in thousands, except per share amounts)

Awards

Stock

Stock

Fair Value

Nonvested restricted stock awards or restricted
   stock units at December 31, 2021

939

4,431

5,645

$
29.64

Granted

—

2,283

—

17.88

Vested

—

(309
)

(513
)

31.83

Forfeited

—

(201
)

—

38.32

Nonvested restricted stock awards or restricted
   stock units at March 31, 2022

939

6,204

5,132

$
27.15

Granted

—

8,256

—

6.80

Vested

(470
)

(546
)

(513
)

22.24

Forfeited

—

(472
)

—

22.91

Nonvested restricted stock awards or restricted
   stock units at June 30, 2022

469

13,442

4,619

$
18.60

Granted

—

8,080

—

6.18

Vested

—

(743
)

(513
)

23.80

Forfeited

—

(1,280
)

—

16.97

Nonvested restricted stock awards or restricted
   stock units at September 30, 2022

469

19,499

4,106

$
14.25

~~Restricted Stock Units for Class A Common Stock~~

~~For the three months ended September 30, 2022 and 2021, the stock-based compensation expense related to RSUs for Class A common stock was $15.1~~ ~~million and $16.5~~ ~~million, respectively. For the nine months ended September 30, 2022 and 2021, the stock-based compensation expense related to RSUs for Class A common stock was $44.6~~ ~~million and $40.6~~ ~~million, respectively. At September 30, 2022, there is $204.6~~ ~~million of total unrecognized stock-based compensation cost related to these RSUs, which is expected to be recognized over a weighted average remaining service period of~~ ~~3.5~~ ~~years.~~

~~Restricted Stock Units for Class B Common Stock~~

~~In September 2020, our board of directors granted RSUs covering an aggregate of~~ ~~24.6~~ ~~million shares of Class B common stock to our Co-Chief Executive Officers (the “Founders Awards”),~~April 25, 2023, subject to ~~the completion of our IPO and~~Mr. Wagner’s continued employment through the applicable vesting ~~dates. Each~~date.

Table of ~~our Co-Chief Executive Officers received (i)~~ Contents~~8.2~~ ~~million RSUs that vest based on the achievement of certain stock price goals (the “Performance-Vesting Founders Awards”) and (ii)~~ ~~4.1~~ ~~million RSUs that vest and settle in equal quarterly installments over~~ ~~four years, subject to certain vesting acceleration terms (the “Time-Vesting Founders Awards”). The grant date fair value of these awards was $533.3~~ ~~million. All of the Performance-Vesting Founders Awards vested in 2020 and we settled~~ ~~0.7~~ ~~million RSUs at that time sufficient to satisfy certain tax withholding obligations due in the year of vesting. The remaining~~ ~~15.7~~ million Performance-Vesting Founders Awards shares will not be settled until October 2023 or, if earlier, upon a change in control event, as defined in the RSU agreements governing the Founders Awards.

~~For the three months ended September 30, 2022 and 2021, the stock-based compensation expense related to the Time-Vesting Founders Awards was $10.2~~ ~~million and $20.1~~ ~~million, respectively. For the nine months ended September 30, 2022 and 2021, the stock-based compensation expense related to the Time-Vesting Founders Awards was $36.0~~ ~~million and $74.1~~ ~~million, respectively. At September 30, 2022, there is $33.4~~ ~~million of total unrecognized stock-based~~

~~compensation cost related to the Time-Vesting Founders Awards, which is expected to be recognized over a weighted average remaining service period of~~ ~~1.1~~ ~~years.~~

~~12.~~11. Basic and Diluted (Loss) Earnings Per Share

The computation of (loss) earnings per share for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 is as follows:

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in thousands, except per share amounts)

2022

2021

2022

2021

Numerator:

Net (loss) income

$
(41,734
)

$
(18,069
)

$
(30,856
)

$
14,660

Denominator:

Weighted average shares - basic

412,956

411,223

413,254

408,604

Dilutive impact of stock options, restricted stock
awards and restricted stock units

—

—

—

21,091

Weighted average shares - diluted

412,956

411,223

413,254

429,695

(Loss) earnings per share:

Basic

$
(0.10
)

$
(0.04
)

$
(0.07
)

$
0.04

Diluted

$
(0.10
)

$
(0.04
)

$
(0.07
)

$
0.03

Three Months Ended
September 30, Nine Months Ended
September 30,
(in thousands, except per share amounts) 2023 2022 2023 2022
Numerator:
Net (loss) income $ (38,495) $ (41,734) $ 17,001 $ (30,856)
Denominator:
Weighted average shares - basic 413,437 412,956 412,698 413,254
Dilutive impact of stock options, restricted stock awards and restricted stock units — — 3,752 —
Weighted average shares - diluted 413,437 412,956 416,450 413,254
(Loss) earnings per share:
Basic $ (0.09) $ (0.10) $ 0.04 $ (0.07)
Diluted $ (0.09) $ (0.10) $ 0.04 $ (0.07)

The following weighted average potentially dilutive shares are excluded from the computation of diluted (loss) earnings per share for the periods presented because including them would have been antidilutive:


	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands)	2023	2022	2023	2022
Stock options, restricted stock awards and restricted stock units	52,965	34,755	27,808	28,540

12. Restructuring Plan

On August 7, 2023, our Board approved a plan to de-prioritize certain solutions under our pharma manufacturer solutions offering (the “Restructuring Plan”), which included (i) a reduction in force involving employees of our wholly-owned subsidiaries GoodRx and vitaCare; (ii) the entry into retention agreements with certain other employees for the purpose of maintaining business continuity; and (iii) the restructuring or termination of certain solutions and arrangements with our clients to better align with our strategic goals and future scale. These actions are part of our continued strategic focus on scaling and re-balancing our cost structure to drive improved profitability. The Restructuring Plan is expected to be substantially complete by the end of 2023.

The following table summarizes restructuring related costs by type incurred through September 30, 2023, and estimated remaining costs to be incurred through the end of the Restructuring Plan:


(in thousands)	Three and Nine Months Ended September 30, 2023		Estimated Remaining Costs (4)		Estimated Total Costs
Non-cash charges (1)	$	23,869	$	30,780	$	54,649
Cash charges
Personnel related costs (2)	6,223		2,908		9,131
Client contract termination costs (3)	10,000		—		10,000
Total restructuring related costs	$	40,092	$	33,688	$	73,780

______________________

(1)

Non-cash charges principally relate to (i) amortization of certain intangible assets that have been accelerated through December 31, 2023, the date the Restructuring Plan is expected to be substantially complete; and (ii) a loss on the disposal of certain capitalized software that are not yet ready for their intended use. The accelerated amortization primarily relates to (i) developed technology and customer relationships acquired in connection with the acquisition of vitaCare; and (ii) certain in-service capitalized software. Of the estimated total costs, we expect to recognize (i) $46.7 million of accelerated amortization expense, of which $17.5 million was recognized during the three and nine months ended September 30, 2023 and presented within depreciation and amortization in the accompanying condensed consolidated statements of operations; and (ii) $7.0 million loss on the disposal of certain capitalized software not yet ready for their intended use, all of which was recognized during the three and

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in thousands)

2022

2021

2022

2021

Stock options, restricted stock awards and
restricted stock units

34,755

28,267

28,540

2,171

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nine months ended September 30, 2023 and presented within product development and technology in the accompanying condensed consolidated statements of operations.

(2)Cash expenditures consist of termination charges arising from severance obligations, continuation of salaries and benefits over a 60-day transitional period during which impacted employees remain employed but are not expected to provide active service, and other customary employee benefit payments in connection with a reduction in force as well as retention charges for certain other employees. During the three and nine months ended September 30, 2023, $3.2 million of these costs was recognized in cost of revenue and $1.9 million in product development and technology, with the remainder in sales and marketing and general and administrative expenses in the accompanying condensed consolidated statements of operations. In addition, the $6.2 million total incurred costs excludes a $0.9 million benefit from the reversal of previously recognized discretionary bonus accruals for certain impacted employees which is presented as a reduction of non-cash charges in the table above.

(3)Cash payment relating to the termination of certain contracts with a pharma manufacturer solutions client in connection with the Restructuring Plan, which was recognized as a reduction of revenue in the accompanying condensed consolidated statements of operations.

(4)These restructuring related charges are estimates and subject to a number of assumptions, and actual results may differ from such estimates.

The following table summarizes the activities for the restructuring related liability included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets:


(in thousands)	Personnel Related Costs
Balance at December 31, 2022	$	—
Provision	6,223
Cash payments	(1,113)
Balance at September 30, 2023	$	5,110

13. Subsequent ~~Event~~

Events

Net Settlement of the Performance-Vesting Founders Awards

As disclosed in Note 15 to our consolidated financial statements in our 2022 10-K, the remaining vested 15.7 million shares of Class B common stock underlying the Performance-Vesting Founders Awards (as defined therein) for our co-founders (formerly Co-Chief Executive Officers) were subject to settlement in October 2023, or earlier upon a change in control event, as defined in the agreement governing the award.

In ~~May 2021,~~accordance with the terms of the Performance-Vesting Founders Awards, we may withhold shares and remit income taxes on behalf of our co-founders at applicable statutory rates on the date of settlement. We refer to such settlement as net settlement. In October 2023, we net settled the remaining vested 15.7 million shares of Class B common stock underlying the Performance-Vesting Founders Awards and remitted cash consideration of $44.5 million on behalf of our co-founders to the relevant tax authorities to satisfy income tax withholding obligations. We delivered an aggregate of 7.6 million shares of our Class B common stock to our co-founders to net settle the award, after withholding an aggregate of approximately 8.1 million shares of our Class B common stock. At our co-founders' election, the delivered 7.6 million shares of our Class B common stock were converted to 7.6 million shares of our Class A common stock on the settlement date.

SDFL Class Action Matter

In October 2023, we entered into a ~~noncancelable lease~~proposed settlement agreement with a third-party to lease additional office space that is adjacent to and expands our existing corporate headquarters in Santa Monica, California. The lease commenced on October 1, 2022, upon our access to the ~~leased premises, and we expect to recognize an operating lease right-of-use asset and lease liability of approximately $20.0~~ ~~million to $30.0~~ million as of that date. Given changes in our property needs since the date we executed this lease, we no longer plan to occupy this premise and are seeking to sublease the property. We expect to record an impairment charge during the fourth quarter of 2022 as rental rates have declined since the date the lease was executed. We areplaintiffs in the ~~process~~SDFL Class Action Matter. See "Note 8. Commitments and Contingencies" for additional information.

Table of ~~determining the amounts of the right-of-use asset and lease liability and impairment charge, if any, as it depends on our completion of a valuation, including our assessment of comparable lease rates.~~Contents

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 ~~Operation”~~Operations” and Part II, Item 8, “Financial Statements and Supplementary Data” included in our ~~Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 10-K”) filed with the SEC on March 1, 2022.~~2022 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 ~~2021~~2022 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.

•

“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. 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 offerings. 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.

•

“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 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

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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~~resource for healthcare ~~platform~~savings and information 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. Our~~ecosystem; however, our financial results for the three and nine months ended September 30, ~~2022~~2023 have been materially impacted by ~~actions taken~~certain restructuring related activities undertaken by ~~a grocery chain described below.~~

us during 2023 and the sustained effects of certain events that occurred during 2022.

Late in the first quarter of 2022, a grocery chain ~~had taken~~took actions that impacted acceptance of discounted pricing for a subset of prescription drugs from PBMs, who are one category of our customers, and whose pricing we promote on our platform ("(such events referred to as the grocer ~~issue")~~issue). This ~~had an immaterial adverse impact on our prescription transactions revenue and Monthly Active Consumers in the first quarter of 2022, but~~ had a material adverse impact on our prescription transactions revenue and Monthly Active Consumers, ~~in the second and third quarters of 2022,~~ which was partially offset by our ability to shift certain prescription transactions to other retailers. Although the grocer issue was addressed in August 2022 and our discounted pricing ~~is currently~~has since been consistently welcomed at the point of sale by the grocery chain, beginning in the second quarter of 2022, it has had and ~~is expected to~~will continue to have a sustained adverse impact on our prescription transactions revenue and Monthly Active Consumers ~~in the future that may continue to be material~~ due to ~~uncertainty around~~ consumer response to updated consumer pricing and the timing and ~~the~~ extent of returning user levels. ~~The estimated impact of the grocer issue on our prescription transactions revenue in the second~~We have not experienced, and ~~third quarters of 2022 was approximately $30.0 million and $40.0 million, respectively. We~~ are not aware of, ~~similar~~ PBM-pharmacy issues at any other large volume pharmacies, with the exception of the grocery chain ~~in question,~~described above, and we believe our pharmacy and PBM relationships remain strong. For additional information, please see ~~Part I, Item 1A,~~sections entitled “Risk ~~Factors – We rely on a limited number of industry participants.”~~Factors" in our ~~2021 10-K.~~ 2022 10-K and this Quarterly Report on Form 10-Q.

In addition to the above, but to a lesser extent, the acquisition of vitaCare Prescription Services, Inc. ("vitaCare") in April 2022 also had a negative impact on our net ~~loss,~~(loss) income, net ~~loss~~(loss) income margin, Adjusted EBITDA and Adjusted EBITDA Margin for the three and nine months ended September 30, ~~2022.~~2023. vitaCare has a higher cost of revenue due to the operational nature of the ~~business~~solutions it supports and has historically generated net losses and negative Adjusted ~~EBITDA,~~EBITDA.

On August 7, 2023, our board of directors (our "Board") approved a plan to de-prioritize certain solutions provided under our pharma manufacturer solutions offering, including vitaCare (the “Restructuring Plan”). The Restructuring Plan included (i) a reduction in force involving employees of our wholly-owned subsidiaries GoodRx, Inc. and vitaCare; (ii) the entry into retention agreements with certain other employees for the purpose of maintaining business continuity; and (iii) the restructuring or termination of certain solutions and arrangements with our clients to better align with our strategic goals and future scale. These actions are part of our continued strategic focus on scaling and re-balancing our cost structure to drive improved profitability and are expected to be substantially complete by the end of 2023. Our revenue and net (loss) income for the three and nine months ended September 30, 2023 have been impacted by costs incurred due to the Restructuring Plan, which we expect will continue through the end of 2023. These restructuring activities are expected to result in approximately $18 million to $22 million of annualized run rate cash savings. The annualized run rate cash savings are estimates and subject to a number of assumptions, and actual results may differ materially. In addition, we expect the ~~near~~run rate cash savings to ~~medium term.~~

principally impact future cost of revenues. For additional information regarding the Restructuring Plan, see Note 12 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

For the three months ended September 30, ~~2022~~2023 as compared to the same period of ~~2021:~~

2022:

•

Revenue decreased 4% to $180.0 million (which was impacted by $10.0 million of client contract termination costs incurred in connection with the Restructuring Plan) from $187.3 ~~million from $195.1 million.~~million;

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•Adjusted Revenue increased 1% to $190.0 million (which represents revenue excluding the $10.0 million of client contract termination costs incurred in connection with the Restructuring Plan, which was recognized as a reduction of revenue) from $187.3 million;

•Net loss and net loss margin were ~~$41.7~~$38.5 million and ~~22.3%~~21.4%, respectively, compared to ~~$18.1 million and 9.3%, respectively. Net~~net loss and net loss margin ~~for the three months ended September 30, 2022 were further impacted by a $16.6~~of $41.7 million loss from a change in fair value of contingent consideration related to the vitaCare acquisition in April 2022, partially offset by a $10.9 million decrease in stock-based compensation expense primarily related to the

~~Founders Awards (as defined~~ and ~~described in Note 11 to our condensed consolidated financial statements) made in connection with our initial public offering ("IPO")~~22.3%, respectively; and ~~a decrease in sales and marketing expense.~~

•

Adjusted EBITDA and Adjusted EBITDA Margin were $53.5 million and 28.1%, respectively, compared to $52.0 million and 27.8%, ~~respectively, down from $61.8 million and 31.7%,~~ respectively.

For the nine months ended September 30, ~~2022~~2023 as compared to the same period of ~~2021:~~

•

~~Revenue grew 9% to $582.4 million from $532.2 million.~~

2022:

•Revenue decreased 5% to $553.6 million (which was impacted by $10.0 million of client contract termination costs incurred in connection with the Restructuring Plan) from $582.4 million;

•Adjusted Revenue decreased 3% to $563.6 million (which represents revenue excluding the $10.0 million of client contract termination costs incurred in connection with the Restructuring Plan, which was recognized as a reduction of revenue) from $582.4 million;

•Net income and net income margin were $17.0 million and 3.1%, respectively, compared to net loss and net loss margin ~~were~~of $30.9 million and 5.3%, ~~respectively, compared to net income~~respectively; and net income margin of $14.7 million and 2.8%, respectively. Net loss and net loss margin for the nine months ended September 30, 2022 were further impacted by $12.4 million of income tax expense, compared to a $30.7 million of income tax benefit for the same period of 2021, and a $16.9 million loss from a change in fair value of contingent consideration related to the vitaCare acquisition in April 2022, partially offset by a $36.4 million decrease in stock-based compensation expense primarily related to the Founders Awards made in connection with our IPO.

•

Adjusted EBITDA and Adjusted EBITDA Margin were $160.2 million and 28.4%, respectively, compared to $163.9 million and 28.1%, ~~respectively, down from $167.4 million~~respectively.

Revenue, net (loss) income and ~~31.5%, respectively.~~

net (loss) income 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 ~~their~~the most directly comparable GAAP financial measures, information about why we consider Adjusted Revenue, Adjusted EBITDA and Adjusted EBITDA Margin useful ~~to investors~~ and a discussion of the material risks and limitations of these measures, please see “Key Financial and Operating Metrics—Non-GAAP Financial Measures" below.

~~Impact of COVID-19~~

We believe COVID-19 continues to have an adverse impact on our prescription transactions offering due to the cumulative impact of lower healthcare utilization for more than two years since the pandemic began, and continued improvement in future periods remains uncertain. Any decrease in the number of consumers seeking to fill prescriptions could negatively impact demand for and use of certain of our offerings, particularly our prescription transactions and subscription offerings, which would have an adverse effect on our business, financial condition and results of operations.

Seasonality

We typically experience stronger consumer demand during the first and fourth quarters of each year, which coincide with generally higher consumer healthcare spending, doctor office visits, annual benefit enrollment season, and seasonal cold and flu trends. In addition, we may experience stronger demand for our pharma manufacturer solutions offering during the fourth quarter of each year, which coincides with pharma manufacturers' annual budgetary spending patterns. This seasonality may impact revenue and sales and marketing ~~expenses.~~expense. The ~~rapid growth of our business through the first quarter of 2020 may have masked the extent of these trends. Since the second quarter of 2020, we saw~~grocer issue and the ongoing impact of COVID-19 ~~pandemic further disrupt~~may have masked these trends ~~which~~in recent periods and may continue ~~in future periods. Finally, the grocer issue may also~~to impact ~~sequential and year-over-year growth~~these trends in the future.

Recent ~~Development~~

~~Refer~~Developments

In October 2023, we net settled the remaining vested 15.7 million shares of Class B common stock underlying the Performance-Vesting Founders Awards (as defined in our 2022 10-K) and remitted aggregate cash consideration of $44.5 million on behalf of our co-founders to the relevant tax authorities to satisfy income tax withholding obligations. Additionally, in October 2023, we entered into a proposed settlement agreement with respect to an ongoing class action litigation. See Note 13 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form ~~10-Q.~~

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.

~~Monthly Active Consumers~~

~~Our Monthly Active Consumers include consumers we acquired through the acquisition of RxSaver, Inc. (acquired in April 2021) beginning in~~

We exited the third quarter of ~~2021. RxSaver, Inc.~~2023 with over 7 million prescription-related consumers that used GoodRx across our prescription transactions and subscription offerings. Our prescription-related consumers represent the sum of Monthly Active Consumers ~~are estimated due~~for the three months ended September 30, 2023 and subscribers to ~~incomplete consumer information.~~ our subscription plans as of September 30, 2023.

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Monthly Active Consumers

Monthly Active Consumers beginning with the second quarter of 2022 were impacted by the grocer issue.

Three Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

June 30,

March 31,

(in millions)

2022

2022

2022

2021

2021

2021

2021

Monthly Active Consumers

5.8

5.8

6.4

6.4

6.4

6.0

5.7


	Three Months Ended
(in millions)	September 30, 2023	June 30, 2023	March 31, 2023	December 31, 2022	September 30, 2022	June 30, 2022	March 31, 2022
Monthly Active Consumers	6.1	6.1	6.1	5.9	5.8	5.8	6.4

Subscription Plans

~~Subscription plans~~

Beginning in 2022, ~~were~~subscription plans have been impacted by a pricing increase for Gold subscribers that went into effect in the first half of 2022 and a sequential decline in our subscription plans for Kroger Savings as a result of reduced marketing spend in relation to the offering.

As of

September 30,

June 30,

March 31,

December 31,

September 30,

June 30,

March 31,

(in thousands)

2022

2022

2022

2021

2021

2021

2021

Subscription plans

1,060

1,133

1,203

1,210

1,129

1,051

931

We expect our subscription plans for Kroger Savings to continue to sequentially decline through July 2024, the expected sunset of the program.


	As of
(in thousands)	September 30, 2023	June 30, 2023	March 31, 2023	December 31, 2022	September 30, 2022	June 30, 2022	March 31, 2022
Subscription plans	930	969	1,007	1,030	1,060	1,133	1,203

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 isand 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.

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 ~~the periods presented, for~~ acquisition related expenses, ~~cash bonuses to vested option holders,~~ stock-based compensation expense, payroll tax expense related to stock-based compensation, loss on extinguishment of debt, financing related expenses, loss on ~~abandonment and impairment of~~ operating lease assets, restructuring related expenses, legal settlement expenses, charitable stock donation, gain on sale of business and other income or expense, net. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of ~~revenue.~~

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 ~~expenses~~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.

The following table presents a reconciliation of net (loss) income and revenue, the most directly comparable financial ~~measure~~measures calculated in accordance with GAAP, to Adjusted EBITDA and Adjusted Revenue, respectively, and presents net

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(loss) income margin, the most directly comparable financial measure calculated in accordance with GAAP, with Adjusted EBITDA Margin:

Three Months Ended
September 30,

Nine Months Ended
September 30,

(dollars in thousands)

2022

2021

2022

2021

Net (loss) income

$
(41,734
)

$
(18,069
)

$
(30,856
)

$
14,660

Adjusted to exclude the following:

Interest income

(2,920
)

(13
)

(3,829
)

(42
)
Interest expense

9,478

5,928

22,316

17,739

Income tax expense (benefit)

19,463

19,153

12,370

(30,707
)
Depreciation and amortization

13,952

10,161

38,644

23,891

Financing related expenses (1)

5

134

14

449

Acquisition related expenses (2)

18,656

1,714

23,630

7,784

Restructuring related expenses (3)

5,880

—

6,236

—

Legal settlement expenses (4)

—

—

2,800

—

Stock-based compensation expense

29,038

39,980

90,820

127,182

Payroll tax expense related to stock-based compensation

184

2,150

1,739

4,994

Loss on abandonment of operating lease assets (5)

—

650

—

1,430

Adjusted EBITDA

$
52,002

$
61,788

$
163,884

$
167,380

Revenue

$
187,318

$
195,102

$
582,445

$
532,168

Net (loss) income margin (6)

(22.3
%)

(9.3
%)

(5.3
%)

2.8
%
Adjusted EBITDA Margin

27.8
%

31.7
%

28.1
%

31.5
%


	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	2023			2022			2023			2022
Net (loss) income	$	(38,495)		$	(41,734)		$	17,001		$	(30,856)
Adjusted to exclude the following:
Interest income	(8,649)			(2,920)			(23,697)			(3,829)
Interest expense	14,720			9,478			41,907			22,316
Income tax (benefit) expense	(8,106)			19,463			(47,938)			12,370
Depreciation and amortization (1)	33,024			13,952			64,060			38,644
Other expense (2)	2,200			—			4,008			—
Financing related expenses (3)	—			5			—			14
Acquisition related expenses (4)	162			18,656			1,603			23,630
Restructuring related expenses (5)	22,389			5,880			22,389			6,236
Legal settlement expenses (6)	3,000			—			3,000			2,800
Stock-based compensation expense	32,646			29,038			76,042			90,820
Payroll tax expense related to stock-based compensation	580			184			1,425			1,739
Loss on operating lease assets (7)	—			—			374			—
Adjusted EBITDA	$	53,471		$	52,002		$	160,174		$	163,884
Revenue	$	179,958		$	187,318		$	553,621		$	582,445
Adjusted to exclude the following:
Client contract termination costs (8)	10,000			—			10,000			—
Adjusted Revenue	$	189,958		$	187,318		$	563,621		$	582,445
Net (loss) income margin (9)	(21.4		%)	(22.3		%)	3.1		%	(5.3		%)
Adjusted EBITDA Margin (10)	28.1		%	27.8		%	28.4		%	28.1		%

______________________

(1)Depreciation and amortization for the three and nine months ended September 30, 2023 included $17.5 million of amortization related to certain intangible assets in connection with the Restructuring Plan, which have been accelerated through December 31, 2023, the date the Restructuring Plan is expected to be substantially complete.

(2)Other expense represents the impairment loss on one of our minority equity interest investments.

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

~~(2)~~(4)

Acquisition related expenses principally include ~~third party fees~~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.

~~(3)~~(5)

Restructuring related expenses include employee severance and other personnel related costs in connection with various workforce optimization and organizational changes tothat better align with our strategic goals and future ~~scale, including~~scale. In connection with the Restructuring Plan, restructuring related expenses for the three and nine months ended September 30, 2023 included (i) a loss of $7.0 million relating to the disposal of certain capitalized software that were not yet ready for their intended use; (ii) net charge of $5.3 million relating to various headcount reduction in force approved by our board of directors in August 2022 involving approximately 140 employees of our indirect wholly owned subsidiary GoodRx, Inc., representing approximately 16% of its workforce primarily in its technology-focused and ~~marketing groups.~~

personnel initiatives; and (iii) a $10.0 million contract termination payment to a pharma manufacturer solutions client.

~~(4)~~(6)

Legal settlement expenses for the three and nine months ended September 30, 2023 represent the estimated ~~accrual of the probable~~net loss with respect to an ongoing class action litigation. Legal settlement expenses for the ~~ongoing~~nine months ended September 30, 2022 represent the estimated amount accrued with respect to the Federal Trade Commission ("FTC") ~~investigation.~~negotiated settlement. The estimated accrual was adjusted in the fourth quarter of 2022 to reflect the actual negotiated settlement amount of $1.5 million. See Note 8 to our condensed consolidated financial statements for additional information.

~~(5)~~(7)

~~Non-cash loss with respect~~Loss on operating lease assets include, as applicable for the periods presented, losses incurred relating to the abandonment or sublease of certain leased office ~~space that~~spaces and disposal of related capitalized costs.

(8)Client contract termination costs represent a payment to a pharma manufacturer solutions client to terminate certain contracts in connection with the Restructuring Plan, which was ~~abandoned.~~

recognized as a reduction of revenue.

~~(6)~~(9)

Net (loss) income margin represents net loss or net income, as applicable, as a percentage of revenue.

(10)Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of Adjusted Revenue.

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Components of our Results of Operations

Revenue

Our revenue is primarily derived from prescription transactions revenue that is generated when pharmacies fill prescriptions for consumers, and from other revenue streams such as our ~~subscription offerings,~~ pharma manufacturer solutions, ~~offering,~~subscription offerings, and our telehealth offerings. We expect subscription and pharma manufacturer solutions revenue to continue to grow as a percentage of total revenue in the near to medium term as we continue to scale the capabilities and platforms of our subscription and pharma manufacturer solutions offerings.offering. All of our revenue has been generated in the United States.

We consider PBMs, pharmacies, pharma manufacturers and our subscribers, with whom we have direct contractual agreements, to be our primary customers.

•

Prescription transactions revenue: Consists primarily of revenue generated from PBMs ~~or customers,~~ when a prescription is filled with a GoodRx code provided through our platform. The majority of our contracts with PBMs provide for fees that represent a percentage of the fees that PBMs charge to the pharmacy, and a minority of our contracts provide for a fixed fee per transaction. Our percentage of fee contracts often also include a minimum fixed fee per transaction. Certain contracts also provide that the amount of fees we receive is based on the volume of prescriptions filled each month. We expect the revenue contribution from contracts with fixed fee arrangements to remain largely stable over the medium term, and do not expect that changes in revenue contribution from fixed fee versus percentage of fee arrangements will materially impact our ~~revenue. Certain contracts also~~revenue from PBMs. Beginning in late 2022, we began to enter into direct contractual agreements with pharmacies, which generally provide ~~that the amount of~~for lower fees ~~we receive is based on the volume of~~per transaction relative to prescriptions filled ~~each month.~~through our agreements with PBMs. Our contracts with pharmacies provide consumers access to discounted prices. We earn fixed fees per transaction from such pharmacies when a prescription is filled with a GoodRx code provided through our platform. We expect to increase direct contractual relationships with more pharmacies in proportion to existing contractual agreements with our PBMs in the near term. Consumer incentives principally in the form of discounts on prescription drugs processed through pharmacies that we directly contract with are recognized as a reduction of prescription transactions revenue.

•

~~Subscription revenue: Consists of revenue from our Gold and Kroger Savings subscription offerings.~~

•

Pharma manufacturer solutions revenue: Consists primarily of revenue generated from pharma manufacturers and other customers for advertising, including integrating onto our platform their affordability solutions to our ~~consumers.~~consumers, and also from prescription transaction fees generated when pharmacies fill prescriptions for products sold by pharma manufacturers via our vitaCare pharmacy services solution, net of consideration paid or payable to clients in connection with terminating pharma manufacturer solutions contracts.

•Subscription revenue: Consists of revenue from our Gold and Kroger Savings subscription offerings.

•Other revenue: Consists ~~primarily~~ of revenue generated by our telehealth ~~offerings~~offering that ~~allow~~allows consumers to access healthcare professionals online.

Beginning in the first quarter of 2022, pharma manufacturer solutions revenue is disclosed separately from other revenue. Prior period amounts have been recast to conform with the current period presentation.

Costs and Operating Expenses

We incur the following expenses directly related to our cost of revenue and operating expenses:

•

Cost of revenue: Consists primarily of costs related to outsourced consumer ~~support,~~support; healthcare provider ~~costs for GoodRx Care, fulfilment costs for certain solutions provided to customers under our pharma manufacturer solutions offering,~~costs; personnel costs including salaries, benefits, bonuses and stock-based compensation expense, for our consumer support ~~employees,~~employees; hosting and cloud ~~costs,~~costs; merchant account ~~fees,~~fees; processing ~~fees~~fees; allocated overhead; and ~~allocated overhead.~~as applicable, fulfillment costs for certain solutions provided to customers under our pharma manufacturer solutions offering. Cost of revenue is largely driven by ~~changes in~~the growth of our visitor, subscriber and active consumer base, as well as our offering mix. Our cost of revenue as a percentage of revenue may vary based on the ~~changes~~change in mix of our various offerings.

•

Product development and technology: Consists primarily of personnel costs, including salaries, benefits, bonuses and stock-based compensation expense, for employees involved in product development ~~activities,~~activities; costs related to third-party services and contractors related to product development, information technology and ~~software-related costs,~~software; and allocated overhead. Product development and technology expenses are primarily driven by ~~increases~~changes in headcount ~~required~~and investments to support and ~~further~~ develop our various products. We capitalize certain qualified costs related to the development of internal-use software, which may also cause product development and technology expenses to vary from period to period. Product development and technology expenses also include, as applicable, losses associated with disposal of capitalized development costs related to internal-use software that are not yet ready for their intended use.

•

Sales and marketing: Consists primarily of advertising and ~~marketing~~promotional expenses for consumer acquisition and retention including consumer (who are not our customers) discounts and incentives that are generally offered to a limited number of consumers for a limited time on a limited number of prescription drugs processed through our PBMs; as well as personnel costs, including salaries, benefits, bonuses, stock-based compensation expense and sales commissions, for sales and marketing ~~employees,~~employees; costs related to third-party services and ~~contractors,~~contractors; and allocated overhead. Sales and marketing expenses are primarily driven by investments to grow and retain our consumer base and may fluctuate based on the timing ~~or level~~ of our investments in consumer acquisition and retention. We continuously evaluate the impact of sales and marketing activities

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on our business and actively manage our sales and marketing spend, including ~~investment~~our investments in consumer acquisition, which is largely variable, as market and business conditions change.

•

General and administrative: Consists primarily of personnel costs including salaries, benefits, bonuses and stock-based compensation expense for our executive, finance, accounting, legal, and human resources ~~functions,~~functions; as well as professional ~~fees,~~fees; occupancy ~~costs,~~costs; other general overhead ~~costs,~~costs; and as applicable, change in fair value of contingent consideration, loss on operating lease assets, gain on sale of business, legal settlement charges, net of insurance recoveries, and charitable donations.

•

Depreciation and amortization: Consists of depreciation of property and equipment and amortization of capitalized internal-use software costs and intangible assets. Our depreciation and amortization changes primarily based on changes in our property and equipment, intangible assets, and capitalized software ~~balances.~~balances and estimated useful lives.

Other Expense, Net

Our other expense, net consists of the following:

•Other expense: Consists primarily of miscellaneous expense that are not core to our operations.

•Interest income: Consists primarily of interest income earned on excess cash held in interest-bearing accounts.

•

Interest expense: Consists primarily of interest expense associated with our debt arrangements, including amortization of debt issuance costs and discounts.

Income Taxes

Our income taxes ~~consists~~consist of federal and state income taxes. Our effective income tax rate differs from the U.S. federal statutory rate of 21.0% primarily due to effects of non-deductible officers’ stock-based compensation expense, ~~state income taxes, research and development tax credits, excess tax benefits from our equity awards and~~ changes in the valuation allowance against our net deferred tax ~~assets.~~assets, state income taxes, research and development tax credits and tax effects from our equity awards. For information regarding our calculation of income taxes in interim periods, see Note 6 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

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Results of Operations

~~The following table sets forth information comparing the components of our results of operations for the periods indicated:~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in thousands)

2022

2021

2022

2021

Revenue:

Prescription transactions revenue

$
131,216

$
155,652

$
421,126

$
434,570

Subscription revenue

26,450

16,226

71,545

42,549

Pharma manufacturer solutions revenue

24,499

18,548

74,519

41,060

Other revenue

5,153

4,676

15,255

13,989

Total revenue

187,318

195,102

582,445

532,168

Costs and operating expenses:

Cost of revenue, exclusive of depreciation and
amortization presented separately below

17,395

11,271

47,719

32,789

Product development and technology

35,921

35,073

106,367

90,800

Sales and marketing

86,215

95,651

273,503

263,726

General and administrative

49,548

35,947

116,211

119,312

Depreciation and amortization

13,952

10,161

38,644

23,891

Total costs and operating expenses

203,031

188,103

582,444

530,518

Operating (loss) income

(15,713
)

6,999

1

1,650

Other expense, net:

Interest income

(2,920
)

(13
)

(3,829
)

(42
)
Interest expense

9,478

5,928

22,316

17,739

Total other expense, net

6,558

5,915

18,487

17,697

(Loss) income before income taxes

(22,271
)

1,084

(18,486
)

(16,047
)
Income tax (expense) benefit

(19,463
)

(19,153
)

(12,370
)

30,707

Net (loss) income

$
(41,734
)

$
(18,069
)

$
(30,856
)

$
14,660

Three Months Ended September 30, ~~2022~~2023 Compared to Three Months Ended September 30, ~~2021~~

~~Revenue~~

Three Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Prescription transactions revenue

$
131,216

$
155,652

$
(24,436
)

(16
%)
Subscription revenue

26,450

16,226

10,224

63
%
Pharma manufacturer solutions revenue

24,499

18,548

5,951

32
%
Other revenue

5,153

4,676

477

10
%
Total revenue

$
187,318

$
195,102

$
(7,784
)

(4
%)

~~Prescription transactions revenue~~2022

The following table sets forth our results of operations for the three months ended September 30, ~~2022 decreased $24.4 million, or 16%, compared to~~2023 and 2022:


(dollars in thousands)	Three Months Ended September 30, 2023		% of Total Revenue	Three Months Ended September 30, 2022		% of Total Revenue	Change ($)		Change (%)
Revenue:
Prescription transactions revenue	$	135,427	75%	$	131,216	70%	$	4,211	3%
Pharma manufacturer solutions revenue (1)	15,897		9%	24,499		13%	(8,602)		(35%)
Subscription revenue	23,240		13%	26,450		14%	(3,210)		(12%)
Other revenue	5,394		3%	5,153		3%	241		5%
Total revenue	179,958			187,318
Costs and operating expenses:
Cost of revenue, exclusive of depreciation and amortization presented separately below	18,721		10%	17,395		9%	1,326		8%
Product development and technology	39,611		22%	35,921		19%	3,690		10%
Sales and marketing	91,615		51%	86,215		46%	5,400		6%
General and administrative	35,317		20%	49,548		26%	(14,231)		(29%)
Depreciation and amortization	33,024		18%	13,952		7%	19,072		137%
Total costs and operating expenses	218,288			203,031
Operating loss	(38,330)			(15,713)
Other expense, net:
Other expense	(2,200)		1%	—		0%	(2,200)		n/m
Interest income	8,649		5%	2,920		2%	5,729		196%
Interest expense	(14,720)		8%	(9,478)		5%	(5,242)		55%
Total other expense, net	(8,271)			(6,558)
Loss before income taxes	(46,601)			(22,271)
Income tax benefit (expense)	8,106		5%	(19,463)		10%	27,569		(142%)
Net loss	$	(38,495)		$	(41,734)

______________________

(1)Pharma manufacturer solutions revenue for the three and nine months ended September 30, ~~2021,~~2023 included a $10.0 million contract termination payment to a pharma manufacturer solutions client in connection with our Restructuring Plan, which was recognized as a reduction of revenue. See Note 12 to our condensed consolidated financial statements for additional information.

Revenue

Prescription transactions revenue increased $4.2 million, or 3%, year-over-year, primarily driven ~~primarily~~ by a ~~9% decrease~~5% increase in the number of our ~~average~~ Monthly Active Consumers, ~~principally due to the sustained impact from the grocer issue~~partially offset by lower fees per transaction as ~~described above. In addition, the year-over-year change in prescription transactions revenue was impacted by an~~a result of our ongoing shift to direct contractual agreements with pharmacies and an increase in our consumer incentives programs pertaining to transactions processed through pharmacies that we directly contracted with, which were recognized as a reduction of revenue. We expect a modest trend of lower fees per transaction in the near term as we continue to focus on increasing the volume of ~~prescription~~ transactions ~~to other retailers,~~processed through pharmacies that we directly contract with, which, ~~generally~~in general, do and may in the future provide lower pricing relative to ~~prescription~~ transactions processed through ~~the grocer.~~

~~Subscription~~our PBMs.

Pharma manufacturer solutions revenue ~~for the three months ended September 30, 2022 increased $10.2~~decreased $8.6 million, or ~~63%~~35%, ~~compared to the three months ended September 30, 2021,~~year-over-year, primarily driven ~~primarily~~ by a ~~pricing increase for Gold subscribers that went into effect~~$10.0 million contract termination payment to a client in connection with the ~~first half~~Restructuring Plan, which was recognized as a reduction of ~~2022,~~revenue, partially offset by organic growth. We expect the results of the de-prioritization of certain solutions under our pharma manufacturer solutions offering in connection with the Restructuring Plan will have a 6%sustained adverse impact on our pharma manufacturer solutions revenue in the medium term.

Subscription revenue decreased $3.2 million, or 12%, year-over-year, primarily driven by a decrease in the number of subscription plans largely due to the sunset of Kroger Savings, resulting in 930 thousand subscription plans as of

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September 30, 2023 compared to 1,060 thousand as of September 30, 2022, ~~compared to 1,129 thousand~~ as ~~of September 30, 2021. We expect the increase in Gold pricing to result in slower subscriber growth relative to subscription revenue growth~~well as a change in the ~~near term.~~sales mix of Gold subscription plans to more single-user plans and away from family plans leading to a lower price per subscription plan. We do not believe the grocer issue materially impacted subscription revenue through the third quarter of ~~2022, though it may be materially impacted~~2023.

Other revenue increased 5% year-over-year. We do not believe the expected sunset of Kroger Savings in July 2024 will have a material impact on our future revenue and financial results.

Costs and Operating Expenses

Cost of revenue, exclusive of depreciation and amortization

Cost of revenue increased $1.3 million, or 8%, year-over-year, primarily due to personnel related costs arising from the Restructuring Plan.

Product development and technology

Product development and technology expenses increased $3.7 million, or 10%, year-over-year, primarily driven by a $7.6 million loss on the disposal of certain capitalized software that were not yet ready for their intended use, principally in connection with the Restructuring Plan. The impact from this loss was partially offset by a $4.0 million decrease in payroll and related costs due to lower average headcount and higher capitalization of certain qualified costs related to the development of internal-use software.

Sales and marketing

Sales and marketing expenses increased $5.4 million, or 6%, year-over-year, primarily driven by a $3.3 million increase in payroll and related costs, principally from higher stock-based compensation expense due to changes in our employee composition, a $2.5 million increase in third-party marketing and related support services and a $1.4 million increase in advertising expenses. The impact from these drivers was partially offset by a $2.2 million decrease in promotional expenses substantially in the ~~future.~~form of consumer discounts pertaining to transactions processed through our PBMs.

General and administrative

General and administrative expenses decreased $14.2 million, or 29%, year-over-year, primarily driven by a $16.6 million change in fair value of contingent consideration in 2022 related to the vitaCare acquisition and a $5.6 million decrease in stock-based compensation expense related to awards granted to our co-founders (the "Founders Awards") in connection with our initial public offering ("IPO") in 2020. The impact from these drivers was partially offset by a net $3.0 million estimated legal settlement loss recognized during the third quarter of 2023 with respect to an ongoing class action litigation (see Note 8 to our condensed consolidated financial statements), a $3.0 million increase in payroll and related expenses, principally driven by stock-based compensation expense related to a stock option award granted to our Interim Chief Executive Officer in the second quarter of 2023, as well as a $2.4 million increase in professional fees.

Depreciation and amortization

Depreciation and amortization expenses increased $19.1 million, or 137%, year-over-year, primarily driven by $17.5 million of amortization related to certain intangible assets in connection with the Restructuring Plan, which have been accelerated through December 31, 2023, the date the Restructuring Plan is expected to be substantially complete.

Other Expense

Other expense increased by $2.2 million year-over-year, due to an impairment loss on one of our minority equity interest investments.

Interest Income

Interest income increased by $5.7 million year-over-year primarily due to higher interest rates earned on cash equivalents held in U.S. treasury securities money market funds.

Interest Expense

Interest expense increased by $5.2 million, or 55%, year-over-year, primarily due to higher interest rates, partially offset by lower average debt balances.

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~~Pharma manufacturer solutions revenue~~

Income Taxes

For the three months ended September 30, 2023, we had an income tax benefit of $8.1 million compared to income tax expense of $19.5 million for the three months ended September 30, 2022 ~~increased $6.0 million, or 32%~~and an effective income tax rate of 17.4% and (87.4%), ~~compared~~respectively. The year-over-year change in our income taxes was primarily due to the ~~three~~changes in our estimated annual effective income tax rate year-over-year from the tax effects of our valuation allowance previously maintained against our net deferred tax assets in excess of tax amortizable goodwill. For information regarding our valuation allowance analysis, see Part I, Item 2, "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Income Taxes—Valuation of Deferred Tax Assets" included elsewhere in this Quarterly Report on Form 10-Q.

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

The following table sets forth our results of operations for the nine months ended September 30, ~~2021, driven primarily by organic growth as we continued to expand our market penetration with pharma manufacturers~~2023 and ~~other customers as well as from our acquisition of vitaCare in April 2022, which contributed $2.0 million in revenues~~2022:


(dollars in thousands)	Nine Months Ended September 30, 2023		% of Total Revenue	Nine Months Ended September 30, 2022		% of Total Revenue	Change ($)		Change (%)
Revenue:
Prescription transactions revenue	$	406,874	73%	$	421,126	72%	$	(14,252)	(3%)
Pharma manufacturer solutions revenue (1)	60,662		11%	74,519		13%	(13,857)		(19%)
Subscription revenue	71,261		13%	71,545		12%	(284)		0%
Other revenue	14,824		3%	15,255		3%	(431)		(3%)
Total revenue	553,621			582,445
Costs and operating expenses:
Cost of revenue, exclusive of depreciation and amortization presented separately below	51,755		9%	47,719		8%	4,036		8%
Product development and technology	103,804		19%	106,367		18%	(2,563)		(2%)
Sales and marketing	247,577		45%	273,503		47%	(25,926)		(9%)
General and administrative	95,144		17%	116,211		20%	(21,067)		(18%)
Depreciation and amortization	64,060		12%	38,644		7%	25,416		66%
Total costs and operating expenses	562,340			582,444
Operating (loss) income	(8,719)			1
Other expense, net:
Other expense	(4,008)		1%	—		0%	(4,008)		n/m
Interest income	23,697		4%	3,829		1%	19,868		519%
Interest expense	(41,907)		8%	(22,316)		4%	(19,591)		88%
Total other expense, net	(22,218)			(18,487)
Loss before income taxes	(30,937)			(18,486)
Income tax benefit (expense)	47,938		9%	(12,370)		2%	60,308		(488%)
Net income (loss)	$	17,001		$	(30,856)

______________________

(1)Pharma manufacturer solutions revenue for the three and nine months ended September 30, ~~2022.~~2023 included a $10.0 million contract termination payment to a pharma manufacturer solutions client in connection with our Restructuring Plan, which was recognized as a reduction of revenue. See Note 12 to our condensed consolidated financial statements for additional information.

~~Other~~

Revenue

Prescription transactions revenue ~~for the three months ended September 30, 2022 increased $0.5~~decreased $14.3 million, or ~~10%~~3%, ~~compared to the three months ended September 30, 2021,~~year-over-year, primarily driven by anthe grocer issue described above, as well as lower fees per transaction as a result of our ongoing shift to direct contractual agreements with pharmacies, partially offset by a 2% increase in the number of ~~telehealth visits~~ our Monthly Active Consumers.

Pharma manufacturer solutions revenue decreased $13.9 million, or 19%, year-over-year, primarily driven by a $10.0 million contract termination payment to a client in connection with the Restructuring Plan, as well as by our increased focus

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on ~~our platform.~~

prioritizing service arrangements with high levels of recurring revenue potential relative to the prior year and moderation in spending across pharma manufacturers. vitaCare, an acquisition completed in April 2022, provided an increase of $4.2 million in revenue contribution for the nine months ended September 30, 2023 compared to the same period of 2022.

Subscription revenue stayed relatively flat year-over-year, primarily driven by a decrease in the number of subscription plans largely due to the sunset of Kroger Savings, resulting in 930 thousand subscription plans as of September 30, 2023 compared to 1,060 thousand as of September 30, 2022, offset by the effects of the pricing increase for Gold subscribers in the first half of 2022.

Other revenue decreased 3% year-over-year. Other than revenue from vitaCare relative to pharma manufacturer solutions revenue, our acquisitions individually and in the aggregate did not materially contribute to the change in our revenue for the ~~three~~nine months ended September 30, ~~2022~~2023 compared to the same period of ~~2021.~~

2022. For expected revenue trends, see our discussion and analysis above for the three months ended September 30, 2023 compared to the same period of 2022.

Costs and Operating Expenses

Cost of revenue, exclusive of depreciation and amortization

Three Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Cost of revenue, exclusive of depreciation and amortization

$
17,395

$
11,271

$
6,124

54
%
As a percentage of total revenue

9
%

6
%

Cost of revenue ~~for the three months ended September 30, 2022~~ increased ~~$6.1~~$4.0 million, or ~~54%~~8%, ~~compared to the three months ended September 30, 2021. This increase was~~year-over-year, primarily driven by a ~~$3.0~~$4.9 million increase in ~~outsourced and in-house~~ personnel related costs principally due to ~~consumer support and an $1.1 million increase in~~the Restructuring Plan as well as allocated overhead ~~principally~~due to higher average headcount, largely as a result of ~~the~~our acquisition of vitaCare in April 2022.

The impact from these drivers was partially offset by a $2.3 million decrease in fulfillment costs for certain solutions provided to customers under our pharma manufacturer solutions offering.

Product development and technology

Three Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Product development and technology

$
35,921

$
35,073

$
848

2
%
As a percentage of total revenue

19
%

18
%

Product development and technology expenses ~~for the three months ended September 30, 2022 remained relatively flat compared to the three months ended September 30, 2021, due~~decreased $2.6 million, or 2%, year-over-year, primarily ~~to an increase~~driven by a $10.1 million decrease in payroll and related costs due to ~~higher~~lower average headcount and ~~also by costs arising from the reduction in force in August 2022, substantially offset by~~ higher capitalization of certain qualified costs related to the development of ~~internal use software in 2022 compared to 2021 due to greater investment in our products. This~~internal-use software. The impact from these drivers was ~~principally driven~~partially offset by a ~~restructuring within our product development and technology team resulting~~$7.6 million loss on the disposal of certain capitalized software that were not yet ready for their intended use principally in ~~higher utilization and reprioritization of product development efforts that better align~~connection with ~~our strategic goals and future scale.~~

the Restructuring Plan.

Sales and marketing

Three Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Sales and marketing

$
86,215

$
95,651

$
(9,436
)

(10
%)
As a percentage of total revenue

46
%

49
%

Sales and marketing expenses ~~for the three months ended September 30, 2022~~ decreased ~~by $9.4~~$25.9 million, or ~~10%~~9%, ~~compared to the three months ended September 30, 2021. This decrease was~~year-over-year, primarily driven by a ~~$17.5~~$35.6 million decrease in advertising expenses and ~~promotional expenses, partially offset by~~ a ~~$5.5~~$9.2 million ~~increase~~decrease in payroll and related ~~expenses~~costs principally due to ~~higher~~a reversal of previously recognized stock-based compensation expense as certain performance milestones were no longer probable of being met, lower average headcount and ~~also by costs arising from~~ the reduction in force in August 2022.

The impact from these drivers was partially offset by a $10.7 million increase in third-party marketing and related support services as well as a $7.0 million increase in promotional expenses substantially in the form of consumer discounts.

General and administrative

Three Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

General and administrative

$
49,548

$
35,947

$
13,601

38
%
As a percentage of total revenue

26
%

18
%

General and administrative expenses ~~for the three months ended September 30, 2022 increased by $13.6~~decreased $21.1 million, or ~~38%~~18%, ~~compared to the three months ended September 30, 2021. This increase was~~year-over-year, primarily driven by a ~~$16.6~~$16.9 million change in fair value of contingent consideration in 2022 related to the vitaCare acquisition, ~~in April 2022 (see Note 3 to our condensed consolidated financial statements), and~~ a ~~$6.8 million increase in payroll and related expenses due to higher headcount to support our growth and operations as a public company, partially offset by a $9.9~~$18.9 million decrease in stock-based compensation expense related to the Founders Awards ~~made~~and a $2.8 million estimated legal settlement accrual recognized in ~~connection~~the second quarter of 2022 with respect to the then-pending FTC investigation. The impact from these drivers was partially offset by a $14.3 million increase in payroll and related expenses, principally due to changes in our ~~IPO~~employee composition and increased equity grants to existing and new employees in the nine months ended September 30, 2023 relative to the same period of 2022, as ~~further described in~~well as a net $3.0 million estimated legal settlement loss recognized during the third quarter of 2023 with respect to an ongoing class action litigation (see Note 118 to our condensed consolidated financial ~~statements.~~

statements).

Depreciation and amortization

Three Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Depreciation and amortization

$
13,952

$
10,161

$
3,791

37
%
As a percentage of total revenue

7
%

5
%

Depreciation and amortization expenses ~~for the three months ended September 30, 2022~~ increased ~~by $3.8~~$25.4 million, or ~~37%~~66%, ~~compared to the three months ended September 30, 2021. This increase was~~year-over-year, primarily driven by ~~a $3.5~~$17.5 million ~~increase~~of amortization related to certain intangible assets in ~~capitalized software~~connection with the Restructuring Plan, which have been accelerated through December 31, 2023, the date the Restructuring Plan is expected to be substantially complete. The year-over-year change in depreciation and amortization was further driven by higher amortization due to higher capitalized costs for platform improvements and the introduction of new products and features.

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Other Expense

Other expense increased by $4.0 million year-over-year, due to impairment losses on one of our minority equity interest investments.

Interest Income

Interest income increased by $19.9 million year-over-year, primarily due to higher interest rates earned on cash equivalents held in U.S. treasury securities money market funds.

Interest Expense

Three Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Interest expense

$
9,478

$
5,928

$
3,550

60
%
As a percentage of total revenue

5
%

3
%

Interest expense ~~for the three months ended September 30, 2022~~ increased by ~~$3.6~~$19.6 million, or ~~60%~~88%, ~~compared to the three months ended September 30, 2021,~~year-over-year, primarily due to higher interest rates, partially offset by lower average debt balances.

Income ~~Tax Expense~~

Three Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Income tax expense

$
(19,463
)

$
(19,153
)

$
(310
)

2
%
Effective income tax rate

(87.4
%)

1,766.9
%

Taxes

For the nine months ended September 30, 2023, we had an income tax benefit of $47.9 million compared to income tax expense of $12.4 million for the nine months ended September 30, 2022 and an effective income tax rate of 155.0% and (66.9%), respectively. The year-over-year change in our income ~~tax expense~~taxes was primarily due to the discrete release of our ~~application~~valuation allowance on beginning of year deferred tax assets in the three months ended June 30, 2023 and changes in our estimated annual effective income tax rate ~~method to calculate interim taxes during~~year-over-year from the ~~three months ended September 30, 2022 compared to the discrete effective~~ tax ~~rate method to calculate interim taxes for the three months ended September 30, 2021, the current~~ effects of ~~the full~~our valuation allowance ~~recorded in the fourth quarter of 2021~~previously maintained against our net deferred tax assets in excess of tax amortizable ~~goodwill, which we maintained as of September 30, 2022, and~~goodwill. The impact from these drivers was partially offset by a decrease in our excess ~~tax~~stock benefits from our equity awards. ~~See Note 6 to our condensed consolidated financial statements for more~~For information regarding ~~the interim tax calculation methods and the valuation allowance.~~

~~Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021~~

~~Revenue~~

Nine Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Prescription transactions revenue

$
421,126

$
434,570

$
(13,444
)

(3
%)
Subscription revenue

71,545

42,549

28,996

68
%
Pharma manufacturer solutions revenue

74,519

41,060

33,459

81
%
Other revenue

15,255

13,989

1,266

9
%
Total revenue

$
582,445

$
532,168

$
50,277

9
%

Prescription transactions revenue for the nine months ended September 30, 2022 decreased $13.4 million, or 3%, compared to the nine months ended September 30, 2021, driven primarily by the grocer issue as described above. The impact from the grocer issue was principally offset by organic growth in our Monthly Active Consumers over time and our ability to shift certain prescription transactions to other retailers. The net effect of these drivers resulted in the net change in the number of our average Monthly Active Consumers to remain relatively flat year-over-year. We believe the organic growth was due to our increasing consumer base over time as a direct result of our sales and marketing investments. In addition, the year-over-year change in prescription transactions revenue was impacted by an ongoing shift in the volume of prescription transactions to other retailers, which generally provide lower pricing relative to prescription transactions processed through the grocer.

The increases in subscription, pharma manufacturer solutions and other revenue for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 were driven by the same factors described above for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. vitaCare's revenue of $3.4 million is included in pharma manufacturer solutions revenue for the nine months ended September 30, 2022.

~~Our acquisitions individually and in the aggregate did not materially contribute to the change in our revenue for the nine months ended September 30, 2022 compared to the same period of 2021.~~

~~Costs and Operating Expenses~~

~~Cost of revenue, exclusive of depreciation and amortization~~

Nine Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Cost of revenue, exclusive of depreciation and amortization

$
47,719

$
32,789

$
14,930

46
%
As a percentage of total revenue

8
%

6
%

Cost of revenue for the nine months ended September 30, 2022 increased $14.9 million, or 46%, compared to the nine months ended September 30, 2021. This increase was primarily driven by a $7.3 million increase in outsourced and in-house personnel related to consumer support and a $2.0 million increase in allocated overhead, principally as a result of the acquisition of vitaCare in April 2022, and a $2.4 million increase in fulfillment costs for certain solutions provided to customers under our pharma manufacturer solutions offering.

~~Product development and technology~~

Nine Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Product development and technology

$
106,367

$
90,800

$
15,567

17
%
As a percentage of total revenue

18
%

17
%

Product development and technology expenses for the nine months ended September 30, 2022 increased by $15.6 million, or 17%, compared to the nine months ended September 30, 2021. This increase was primarily driven by a $11.6 million increase in payroll and related expenses primarily due to higher headcount in support of our product development efforts.

~~Sales and marketing~~

Nine Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Sales and marketing

$
273,503

$
263,726

$
9,777

4
%
As a percentage of total revenue

47
%

50
%

Sales and marketing expenses for the nine months ended September 30, 2022 increased by $9.8 million, or 4%, compared to the nine months ended September 30, 2021. This increase was primarily driven by a $18.6 million increase in payroll and related expenses principally due to higher headcount and a $3.7 million increase in third-party services and contractors to support our sales and marketing initiatives, partially offset by a $16.1 million decrease in advertising and promotional expenses.

~~General and administrative~~

Nine Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

General and administrative

$
116,211

$
119,312

$
(3,101
)

(3
%)
As a percentage of total revenue

20
%

22
%

General and administrative expenses for the nine months ended September 30, 2022 decreased by $3.1 million, or 3%, compared to the nine months ended September 30, 2021. This decrease was primarily driven by a $38.1 million decrease in stock-based compensation expense related to the Founders Awards made in connection with our IPO as further described in Note 11 to our condensed consolidated financial statements. This was partially offset by a $16.9 million change in fair value of contingent consideration related to the vitaCare acquisition in April 2022 (see Note 3 to our condensed consolidated financial statements), a $12.5 million increase in payroll and related expenses due to higher headcount to support our growth and operations as a public company, and a $2.8 million estimated legal settlement accrual of the probable loss recognized in 2022 with respect to the ongoing FTC investigation.

~~Depreciation and amortization~~

Nine Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Depreciation and amortization

$
38,644

$
23,891

$
14,753

62
%
As a percentage of total revenue

7
%

4
%

Depreciation and amortization expenses for the nine months ended September 30, 2022 increased by $14.8 million, or 62%, compared to the nine months ended September 30, 2021. This increase was due primarily to a $9.8 million increase in capitalized software amortization due to higher capitalized costs for platform improvements and the introduction of new products and features and a $4.5 million increase in amortization related to acquired intangible assets.

~~Interest Expense~~

Nine Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Interest expense

$
22,316

$
17,739

$
4,577

26
%
As a percentage of total revenue

4
%

3
%

Interest expense for the nine months ended September 30, 2022 increased by $4.6 million, or 26%, compared to the nine months ended September 30, 2021, primarily due to higher interest rates partially offset by lower average debt balances.

~~Income Tax (Expense) Benefit~~

Nine Months Ended
September 30,

Change

(dollars in thousands)

2022

2021

$

%

Income tax (expense) benefit

$
(12,370
)

$
30,707

$
(43,077
)

(140
%)
Effective income tax rate

(66.9
%)

191.4
%

~~The year-over-year change in our income taxes was primarily due to a decrease in our excess tax benefits from our equity awards and the current effects of the full~~ valuation allowance ~~recorded~~analysis, see Part I, Item 2, "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Income Taxes—Valuation of Deferred Tax Assets" included elsewhere in the fourth quarter of 2021 against our net deferred tax assets in excess of tax amortizable goodwill, which we maintained as of September 30, 2022, and by our application of the estimated annual effective income tax rate method to calculate interim taxes during the nine months ended September 30, 2022 compared to the discrete effective tax rate method to calculate interim taxes for the nine months ended September 30, 2021. See Note 6 to our condensed consolidated financial statements for more information regarding the interim tax calculation methods and the valuation allowance.

this Quarterly Report on Form 10-Q.

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. Our principal sources of liquidity are expected to be our cash and cash equivalents and borrowings available under our $100.0 million secured ~~asset-based~~ revolving credit facility which ~~matures in~~expires on October 11, 2024. As of September 30, ~~2022,~~2023, we ~~have~~had cash and cash equivalents of ~~$728.8~~$794.9 million and $90.8 million available under our revolving credit facility. For additional information regarding our revolving credit facility and our term loan, ~~refer to~~see Note 7 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

As of September 30, ~~2022,~~2023, there ~~are~~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~~"Management's Discussion and Analysis of Financial Condition and Results of ~~Operation”~~Operations" of our ~~2021~~2022 10-K. Based on 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.~~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 ~~revenue growth,~~business, the timing and extent of investments, ~~to support such growth,~~ sales and marketing activities, and many other factors as described in ~~Part I, Item 1A,~~sections entitled “Risk Factors” of our ~~2021~~2022 10-K ~~as updated by Part II, Item 1A, “Risk Factors” of~~and this Quarterly Report on Form 10-Q.

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 and socio-political events, has resulted in, and may continue to result in, significant disruption of global financial markets, including rising interest rates, reducing our ability to access capital. If we are unable to raise additional funds when 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 existing debt arrangement contains 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. ~~are~~were restricted pursuant to the terms of our debt arrangements as of September 30, ~~2022.~~2023. Since the restricted net assets of GoodRx, Inc. and its subsidiaries exceed 25% of our consolidated net assets, in accordance with Regulation S-X, ~~refer to the notes~~

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see Note 17 to our consolidated financial statements included in our ~~2021~~2022 10-K for the condensed parent company financial information of GoodRx Holdings, Inc.

Cash Flows

Nine Months Ended
September 30,

(in thousands)

2022

2021

Net cash provided by operating activities

$
114,901

$
128,969

Net cash used in investing activities

(211,784
)

(169,474
)
Net cash used in financing activities

(115,440
)

(19,063
)
Net change in cash, cash equivalents and restricted cash

$
(212,323
)

$
(59,568
)


	Nine Months Ended September 30,
(in thousands)	2023		2022
Net cash provided by operating activities	$	122,424	$	114,901
Net cash used in investing activities	(42,894)		(211,784)
Net cash used in financing activities	(41,790)		(115,440)
Net change in cash and cash equivalents	$	37,740	$	(212,323)

Net cash provided by operating activities

Net cash provided by operating activities consist of net ~~loss~~income or ~~net income~~loss adjusted for certain non-cash items and changes in assets and liabilities. The ~~$14.1~~$7.5 million ~~decrease~~increase in net cash provided by ~~operating activities~~operations during the nine months ended September 30, ~~2022~~2023 compared to the nine months ended September 30, ~~2021~~2022 was due to aan increase of $47.9 million from the year-over-year change from net loss to net income and a net ~~income~~decrease of ~~$14.7 million to a net loss of $30.9 million, partially offset by a net increase of $26.7~~$11.1 million in ~~non-cash adjustments and a $4.7 million increase in~~cash outflow from changes in operating assets and ~~liabilities.~~liabilities, offset by a net decrease of $51.4 million in non-cash adjustments. The net ~~increase~~decrease in non-cash adjustments was primarily driven by ~~an increase~~changes in deferred income tax year-over-year as a result of the discrete release of our valuation allowance in the second quarter of 2023, a year-over-year decrease in stock-based compensation expense due to the Founders Awards and a decrease in the change in fair value of contingent consideration that was recognized in 2022. The impact from these drivers was partially offset by losses on disposal of capitalized software that were not yet ready for their intended use and minority equity interest investment, as well as an increase in depreciation and amortization ~~and deferred income taxes, partially offset by~~due to amortization of certain intangible assets that were accelerated in 2023 as a ~~decrease in stock-based compensation expense due principally to~~result of the ~~Founders Awards.~~Restructuring Plan. The changes in operating assets and liabilities were primarily driven by the timing of income tax payments and refunds, as well as by the timing of payments ~~and collections for~~of accounts payable and accrued expenses and collections of accounts ~~receivable, respectively.~~

receivable.

Net cash used in investing activities

Net cash used in investing activities primarily consist of cash used for acquisitions and investments, software development costs and capital expenditures. The ~~$42.3~~$168.9 million ~~increase~~decrease in net cash used in investing activities for the nine months ended September 30, ~~2022~~2023 compared to the nine months ended September 30, ~~2021~~2022 was primarily related to a ~~$27.6~~$171.9 million ~~increase~~decrease in cash paid for acquisition of businesses and minority equity interest investments in privately-held ~~companies, and a $14.7 million increase in software development costs.~~

companies.

Net cash used in financing activities

Net cash used in financing activities primarily consist of payments related to our debt arrangements, repurchases of our Class A common stock, and net share settlement of equity awards, partially offset by proceeds from exercise of stock ~~options.~~options and from our employee stock purchase plan. The ~~$96.4~~$73.7 million ~~increase~~decrease in net cash used in financing activities for the nine months ended September 30, ~~2022~~2023 compared to the nine months ended September 30, ~~2021~~2022 was primarily related to ~~$101.7~~a decrease of $75.6 million for repurchases of our Class A common ~~stock in 2022 and a $20.6 million decrease in proceeds from exercises of stock options, partially offset by a $25.1 million decrease in payments related to net share settlement of equity awards.~~

~~Contractual Obligations and Commitments~~

~~There have been no material changes~~stock.

Recent Accounting Pronouncement

See Note 2 to our ~~contractual obligations and commitments compared with those described~~condensed consolidated financial statements appearing elsewhere in ~~our 2021 10-K.~~

this Quarterly Report on Form 10-Q for further information on a new accounting standard adopted in 2023.

Critical Accounting Policies and Estimates

Except as noted below, during the ~~three~~nine months ended September 30, ~~2022,~~2023, 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 ~~2021~~2022 10-K.

~~Business Combinations~~

~~We record tangible~~

Income Taxes—Valuation of Deferred Tax Assets

Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the financial reporting and ~~intangible~~tax basis of assets ~~acquired~~ and liabilities, ~~assumed in a business combination at fair value~~ as well as from net operating losses and tax credits. We evaluate the recoverability of ~~the acquisition date in accordance with Accounting Standards Codification 805,~~ ~~Business Combinations. Any excess consideration over the fair value of~~deferred tax assets ~~acquired~~by assessing all available evidence, both positive and liabilities assumed is recognized as goodwill. Contingent consideration arising from a business combination, if any, is included as part of purchase consideration and recorded at fair value as of the acquisition date. Contingent consideration arrangements are remeasured at fair value at each reporting period subsequentnegative, to ~~the acquisition date until the contingency is resolved.~~

~~The valuations of intangible assets and contingent consideration use different valuation methods depending~~determine whether, based on the ~~asset acquired and underlying nature~~weight of that evidence, a valuation allowance for deferred tax assets is needed. A valuation allowance is established if it is more likely than not that all or a

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portion of deferred tax assets will not be realized. The determination of whether a valuation allowance should be established, as well as the ~~contingency and that may include~~amount of such allowance, requires significant ~~estimates and judgments. Our critical accounting estimates are primarily those relating to forecasts of revenue~~judgment and estimates, including estimates of discount rates used in the valuation of developed technology and customer related intangible assets and the contingent consideration receivable. In addition, our critical accounting estimates also relate to the probabilities applied to the assumed scenarios in the fair value remeasurement of the contingent consideration receivable as of September 30, 2022.

~~For developed technology and customer related intangible assets, our revenue forecasts include assumptions about~~ future industry conditions, macroeconomic events such as the COVID-19 pandemic, our ability to renew contracts in a competitive bidding process, among other factors. The discount rates focus on rates of return for equity and debt and are calculated using public information from selected guideline companies. The magnitude of the discount rates reflects the perceived risk of each investment, which requires significant judgment. A change in the estimated risk of the acquired companies' cash flows would change the discount rates applied, which in turn could significantly affectearnings. Accordingly, the valuation of our ~~acquired developed technology and customer related intangible assets.~~

For contingent consideration receivable, our revenue forecasts include assumptions relating to the fair value of services expected to be provided to seller which includes specific assumptions about the seller’s ability to continue to order such services given the seller’s liquidity position, among other macroeconomic and industry factors. The discount rate focuses on the level of risk of achievement of the forecasts and the credit and financial stability of the seller including its financial wherewithal for future payment of the receivable, which requires significant judgment. A change in the seller's liquidity position and future outlook would change the revenue forecasts and discount rate applied and our estimate ofnet deferred tax assets is a critical accounting estimate.

In evaluating the realizability of our net deferred tax assets, we perform an assessment each reporting period of both positive and negative evidence. As of December 31, 2021 through March 31, 2023, we maintained a full valuation allowance against our net deferred tax assets in excess of amortizable goodwill as the ~~contingent consideration receivable,~~objectively verifiable negative evidence outweighed the positive evidence. We determined it was more likely than not that our deferred tax assets would not be realized. Objectively verifiable negative evidence at the time primarily included (i) the existence of fiscal and trailing three-year cumulative tax losses (pre-tax earnings or losses adjusted for permanent book to tax differences) principally generated from 2021 and 2020; and (ii) the existence of substantial stock options granted prior to our IPO that remain outstanding. The tax losses in 2021 and 2020 were attributable to substantial excess tax benefits realized from the exercise of stock options granted prior to our IPO. Stock options granted prior to our IPO contained substantially lower exercise prices compared to the closing prices of our Class A common stock as reported on the Nasdaq Global Select Market in 2021 and 2020, which when exercised, resulted in ~~turn would affect~~significant excess tax benefits to us. In 2022 and through the ~~valuation~~first half of 2023, the excess tax benefits realized substantially decreased relative to 2021 and 2020 due to a decline in the closing prices of our Class A common stock. Accordingly, relative to 2021, the weight of the ~~contingent consideration receivable. Changes~~negative evidence related to substantial excess tax benefits to be realized in future tax periods declined in recent periods.

As of June 30, 2023, we determined that it was more likely than not that our net deferred tax assets would be realized. Positive evidence reviewed included sustained tax profitability, which was objective and verifiable, and anticipated future earnings. The sustained trend of tax profitability realized began in 2022 and continued through the first half of 2023. Additional positive evidence reviewed included (i) stock options granted will expire 10 years from the date of grant if unexercised; and (ii) an indefinite carryforward period for certain deferred tax assets. When a change in valuation allowance is recognized during an interim period, the change in valuation allowance resulting from current year income is included in the annual effective tax rate and the release of valuation allowance supported by projections of future taxable income is recorded as a discrete tax benefit in the ~~contingent consideration receivable are recorded in general and administrative expenses in~~interim period. Accordingly, we released $55.9 million of our ~~consolidated statement of operations.~~

As of September 30, 2022, the fair value of the contingent consideration receivable was remeasured based on probability weighting certain scenarios which incorporate the increased risk of collectability of the contingent consideration principally due to certain events that occurredvaluation allowance as a discrete tax benefit during the three months ended June 30, 2023.

Although we have a significant number of outstanding stock options granted prior to our IPO available to be exercised in future tax periods, which may generate incremental excess tax benefits if they are exercised, the degree of excess tax benefits that will be realized in the future will depend on many factors outside of our control, including the closing prices of our Class A common stock in the future and stock option exercises being initiated by employees. Further, we have granted additional equity awards to our employees since our IPO at various closing prices of our Class A common stock which when vested or exercised, could offset, partially offset or supplement the incremental excess tax benefits to be realized from the exercise of stock options granted prior to our IPO in future tax periods.

We apply judgment to consider the relative impact of negative and positive evidence and the weight given to negative and positive evidence is commensurate with the extent to which such evidence can be objectively verified. For the nine months ended September 30, ~~2022 with respect~~2023, we continued to ~~the seller's financing activities that we believe cast substantial doubt~~experience tax profitability and anticipate future earnings. Based on our evaluation of all available positive and negative evidence, and by placing greater weight on the ~~seller's ability~~sustained tax profitability achieved since 2022, which was objectively verifiable, and anticipated future earnings, we continued to ~~pay. These events include but are~~believe that a valuation allowance against the majority of our net deferred tax assets was not limited to: (i) execution of amendments with its lenders to extend the maturity date of the seller's debt obligations by fractional increments; (ii) expiration of a tender offer by a prospective buyer; and (iii) insignificant capital raised relative to liability obligations outstanding of which implied a lower valuation of the seller's business relative to the implied valuation based upon the terms of the expired tender offer. Scenarios in the fair value remeasurement include (i) the seller is no longer able to pay the contingent consideration, and (ii) the seller obtains sufficient funding to pay the obligations and achieves the projected revenue over the 5-year term. We applied a 95% and 5% probability rate to the above two assumed scenarios, respectively. A significant change in the probability rates would result in a significantly higher fair value measurement. A hypothetical 20% change in the probability rates applied (abovementioned scenarios at 75% and 25%, respectively) would increase the fair value of the contingent consideration by approximately $4.8 millionrequired as of September 30, ~~2022.~~

~~Recent Accounting Pronouncements~~

~~Refer~~2023. Our judgment regarding the need for a valuation allowance may reasonably change in future reporting periods due to ~~Note 2 to~~many factors, including changes in the level of tax profitability that we achieve, changes in tax laws or regulations, and price fluctuations of our ~~condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.~~

Class A common stock and its related future tax effects from our outstanding equity awards.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our market risk from the disclosure included ~~under~~in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” inof our ~~2021~~2022 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our ~~co-principal~~principal executive ~~officers~~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 ~~co-principal~~principal executive ~~officers~~officer and principal financial officer concluded that, as of September 30, ~~2022,~~2023, our disclosure controls and procedures ~~are~~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 ~~quarter~~three months ended September 30, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information required under this Part II, Item 1 is set forth in Note 8 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and is incorporated herein by this reference.

Item 1A. Risk Factors

For a discussion of potential risks and uncertainties related to us, see the information included in Part I, Item 1A, "Risk Factors" of our ~~2021~~2022 10-K. There have been no material changes to the risk factors previously disclosed in our ~~2021~~2022 10-K, except as noted below:

We rely significantly on our prescription transactions offering and may not be successful in expanding our offerings within our markets, particularly the U.S. prescriptions market, or to other segments of the healthcare industry.

To date, the vast majority of our revenue has been derived from our prescription transactions offering. When a consumer uses a GoodRx code to fill a prescription and saves money compared to the list price at that pharmacy, we receive fees from our partners, including PBMs, pharma manufacturers and pharmacies, as applicable. Revenue from our prescription transactions offering represented 72%, 80% and 89% of our revenue for the years ended December 31, 2022, 2021 and 2020, respectively. Substantially all of this revenue was generated from consumer transactions at brick-and-mortar pharmacies. The ~~impact~~introduction of ~~recent healthcare reform legislation~~competing offerings with lower prices for consumers, fluctuations in prescription prices, changes in consumer purchasing habits, including an increase in the use of mail delivery prescriptions, changes in our relationships with industry participants and ~~other~~our various partners, changes in the ~~healthcare industry~~regulatory landscape, and other factors could result in ~~healthcare spending~~changes to our contracts or a decline in our total revenue, which may have an adverse effect on ~~us is currently unknown, but may adversely affect~~ our business, financial condition and results of operations.

~~Our~~ Because we derive a vast majority of our revenue ~~is dependent on the healthcare industry and could be affected by changes~~from our prescription transactions offering, any material decline in healthcare spending and policy. The healthcare industry is subject to changing political, regulatory and other influences. The Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act of 2010 (collectively, 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, required manufacturers to participate in a coverage gap discount program, under which they must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand medications to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient medications to be covered under Medicare Part D, 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.~~

~~Since its enactment, there~~such offering or in the fees we receive from our partners in connection with such offering would have ~~been judicial, U.S. congressional~~a pronounced impact on our future revenue and ~~executive branch challenges~~results of operations, particularly if we are unable to ~~certain aspects of~~expand our offerings overall.

We seek to expand our offerings within the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Thus, the ACA will remain in effect in its current form. In addition, recently there has been heightened governmental scrutiny over 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.

In addition, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the “IRA”) into law. Among other things, the IRA requires pharmaceutical manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates on manufacturers under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025). The IRA permits the Secretary of the U.S. Department of Health and Human Services to implement many of these provisions through guidance, as opposed to regulation, for the initial years. For that and other reasons, it is currently unclear how the IRA will be effectuated, and while the impact of the IRA on the pharmaceutical industry cannot yet be fully determined, it is likely to be significant and may adversely impact us. Further, we believe Congressprescriptions market and the ~~Biden administration are likely to continue to scrutinize key participants in the healthcare industry, including PBMs.~~

~~Individual states~~pharma manufacturer solutions market in the United States, and we are actively investing in these growth areas. We also continue to focus on the optimization of our existing partnerships and have ~~also increasingly passed legislation~~entered into and ~~implemented regulations designed~~may in the future enter into new agreements with industry participants. However, expanding our offerings, entering into new markets and entering into new partnerships requires substantial additional resources, and our ability to ~~control medication pricing, including price~~succeed is not certain. During and following periods of active investment in such offerings, markets, relationships and partnerships, we may experience a decrease in profitability or ~~patient reimbursement constraints, discounts, restrictions on certain product access, disclosure, transparency~~margins, particularly if the area of investment generates lower margins than our other offerings. As we attempt to expand our offerings and ~~reporting requirements~~optimize our partnerships, we will need to ~~regulatory agencies regarding marketing costs and discounts provided to patients,~~take additional steps, such as ~~those provided through our prescription transactions offering~~hiring additional personnel, partnering with new third parties and ~~subscription offerings, for prescription medications dispensed by pharmacies,~~incurring considerable research and development expenses, in ~~some cases, designed~~order to ~~encourage importation from other countries~~pursue such expansion and bulk purchasing. 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 reimbursementsoptimization successfully. Any such expansion and/or optimization would be subject to ~~network pharmacies~~additional uncertainties and ~~other standards for PBMs’ reimbursements~~would likely be subject to ~~network pharmacies.~~additional laws and regulations. As a result, ~~of this holding, some states have passed,~~we may not be successful in future efforts to expand into or achieve profitability from new markets, new business models or strategies, new partnerships or new offering types, and ~~other states may pass, similar legislation or may otherwise attempt~~our ability to ~~regulate PBMs, which could have impacts on the healthcare industry.~~

~~We expect that additional state~~generate revenue from our current offerings 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~~continue our existing ~~arrangements with PBMs and pharma manufacturers,~~business may be negatively affected. If any ~~of which could adversely affect~~such expansion does not enhance our ability to maintain or grow revenue or recover any associated development costs, our business, financial condition and results of ~~operations.~~

operations could be adversely affected.

Our ~~recent reduction~~business is subject to changes in ~~force undertaken~~medication pricing and is significantly impacted by pricing structures negotiated by industry participants.

Our platform aggregates and analyzes pricing data from a number of different sources. The discounted prices that we present through our platform are based in large part upon pricing structures negotiated by industry participants. Although some of our contracts with certain of our partners contain provisions related to ~~re-balance~~discount rates, we do not control the overall pricing strategies of pharma manufacturers, wholesalers, PBMs and pharmacies, each of which is motivated by independent considerations and drivers that are outside our ~~investments~~control and has the ability to set or significantly impact market prices for different prescription medications. While we have contractual and non-contractual relationships with certain industry participants, such as pharmacies, PBMs and pharma manufacturers, these and other industry participants often negotiate complex and multi-party pricing structures, and we have no control over these participants and the policies and strategies that they implement in negotiating these multi-party pricing structures. For example, a grocery chain took actions late in the first quarter of 2022 that impacted acceptance of discounted pricing for a subset of prescription drugs from PBMs, who are one category of our customers, and whose pricing we promote on our platform. This had a material adverse impact on our results of operations for the year ended December 31, 2022 and may continue to have a material adverse impact in future periods.

Pharma manufacturers generally direct medication pricing by setting medication list prices and offering rebates and discounts for their medications. List prices are impacted by, among other things, market considerations such as the number of competitor medications and availability of alternative treatment options. Wholesalers can impact medication pricing by

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purchasing medications in bulk from pharma manufacturers and then reselling such medications to pharmacies. PBMs generally impact medication pricing through their bargaining power, negotiated rebates with pharma manufacturers and contracts with different pharmacy providers and health insurance companies. PBMs work with pharmacies to determine the negotiated rate that will be paid at the pharmacy by consumers. We also work with pharmacies with which we have contractual arrangements to offer discount rates to consumers. Medication pricing is also impacted by health insurance companies and the extent to which a health insurance plan provides for, among other things, covered medications, preferred tiers for different medications and high or low deductibles. A vast majority of the utilization of our platform relates to generic medications.

Our ability to present discounted prices through our platform, the value of any such discounts and our ability to generate revenue are directly affected by the pricing structures in place amongst these industry participants, and changes in medication pricing and in the general pricing structures that are in place could have an adverse effect on our business, financial condition and results of operations. For example, changes in the negotiated rates of the PBMs on our platform at pharmacies could negatively impact the prices that we present through our platform, and changes in insurance plan coverage for specific medications could reduce demand for and/or our ability to offer competitive discounts for certain medications, any of which could have an adverse effect on our ability to generate revenue and business. In addition, changes in the fee and pricing structures among industry participants, whether due to regulatory requirements, competitive pressures or otherwise, that reduce or adversely impact fees generated by PBMs or directly by us through partner pharmacies would have an adverse effect on our ability to generate revenue and business. Due in part to existing pricing structures, we generate a smaller portion of our revenue through contracts with pharma manufacturers and other intermediaries. Changes in the roles of industry participants and in general pricing structures, as well as price competition among industry participants, could have an adverse impact on our business. For example, integration of PBMs and pharmacy providers could result in pricing structures whereby such entities would have greater pricing power and flexibility or industry players could implement direct to consumer initiatives that could significantly alter existing pricing structures, either of which would have an adverse impact on our ability to present competitive and low prices to consumers and, as a result, the value of our platform for consumers and our results of operations.

We generally do not control the categories and types of prescriptions for which we can offer savings or discounted prices.

The categories and brands of medications for which we can present discounted prices are largely determined by PBMs, pharmacies and pharma manufacturers. PBMs work with insurance companies, employers and other organizations and enter into contracts with pharmacies to determine negotiated rates. They also negotiate rebates with pharma manufacturers. The terms that different PBMs negotiate with each pharmacy are generally different and result in different negotiated rates available via each PBM’s network, all of which is outside our control. Different PBMs prioritize and allocate discounts across different medications, and continuously update these allocations in accordance with their internal strategies and expectations. As we have agreements with PBMs to market their negotiated rates through our platform, our ability to present discounted prices is in part dependent upon the arrangements that such PBMs have negotiated with pharmacies and upon the resulting availability and allocation of discounts for medications subject to these arrangements. We also have agreements with partner pharmacies to offer discount rates to consumers and such discount rates are subject to negotiated terms and conditions. In general, industry participants are less likely to allocate or provide discounts or rebates on brand medications that are covered by patents. As a result, the discounted prices that we are able to present for brand medications may not be as competitive as for generic medications. Similar to the total prescription volume in the United States, the vast majority of the utilization of our platform relates to generic medications.

Changes in the categories and types of medications for which we can present pricing through our platform could have an adverse effect on our business, financial condition and results of operations. In addition, demand for our offerings and the use and utility of our platform is impacted by the value of the discounts that we are able to present and the extent to which there is inconsistency in the price of a particular prescription across the market. If pharmacies, PBMs or others do not allocate or otherwise facilitate adequate discounts for these medications, or if there is significant price similarity or competition across PBMs and pharmacies, the perceived value of our platform and the demand for our offerings would decrease and there would be a significant impact on our business, financial condition and results of operations.

We rely on a limited number of industry participants.

There is currently significant concentration in the U.S. healthcare industry, and in particular there are a limited number of PBMs, including pharmacies’ in-house PBMs, and a limited number of national pharmacy chains. If we are unable to retain favorable contractual arrangements and relationships with our PBMs and partner pharmacies, including any successor PBMs or pharmacies should there be further consolidation of PBMs or pharmacies, we may lose them as customers and partners, as applicable, or the negotiated rates provided by such PBMs or directly through such partner pharmacies may become less competitive, which could have an adverse impact on the discounted prices we present through our platform.

A limited number of PBMs generate a significant percentage of the discounted prices that we present through our platform and, as a result, we generate a significant portion of our revenue from contracts with a limited number of PBMs. We work with more than a dozen PBMs that maintain cash networks and prices, and the number of PBMs we work with has significantly increased over time, limiting the extent to which any one PBM contributes to our overall revenue; however, we

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may not expand beyond our existing PBM partners and the number of our PBM partners may even decline. Revenue from each PBM fluctuates from period to period as the discounts and prices available through our platform change, and different PBMs experience increases and decreases in the volume of transactions processed through their respective networks. Our three largest PBM partners accounted for 31% of our revenue in 2022, 34% of our revenue in 2021, and 42% of our revenue in 2020. In 2022, Express Scripts accounted for more than 10% of revenue. In 2021, Express Scripts and Navitus each accounted for more than 10% of revenue. In 2020, Navitus, MedImpact and Express Scripts each accounted for more than 10% of revenue. The loss of any of these large PBMs may negatively impact the breadth of the pricing that we are able to offer consumers.

Most of our PBM contracts provide for monthly payments from PBMs, including our contracts with MedImpact, Navitus, and Express Scripts. Our PBM contracts generally can be divided into two categories: PBM contracts featuring a percentage of fee arrangement, where fees are a percentage of the fees that PBMs charge to pharmacies, and PBM contracts featuring a fixed fee per transaction arrangement. Our percentage of fee contracts often also include a minimum fixed fee per transaction. The majority of our PBM contracts, including our contracts with MedImpact and Navitus, are percentage of fee contracts, and a minority of our contracts, including our PBM contract with Express Scripts, provide for fixed fee per transaction arrangements. Our PBM contracts generally, including our contracts with MedImpact, Navitus, and Express Scripts, have a tiered fee structure based on volume generated in the applicable payment period. Our PBM contracts, including our contracts with MedImpact, Navitus, and Express Scripts, do not contain minimum volume requirements, and thus do not provide for any assurance as to minimum payments to us. Our PBM contracts generally renew automatically, including our contracts with MedImpact and Navitus. In addition, our PBM contracts generally provide for continuing payments to us after such contracts are terminated, including our contracts with MedImpact, Navitus and Express Scripts. Some of our PBM contracts provide for these continuing payments for so long as negotiated rates related to the applicable PBM contract continue to be used after termination, and other contracts provide for these continuing payments for specified multi-year payment periods after termination. Our contracts with MedImpact, Navitus, and Express Scripts provide for periods of five years, three years, and five years, respectively, during which payments will be made as negotiated rates related to the applicable PBM contract continue to be used. Between contract renewals, our contracts generally provide for limited termination rights and do not provide for termination for convenience.

In addition, our PBM contracts typically include provisions that prevent PBMs from circumventing our platform, redirecting volumes outside of our platform and other protective measures. For example, our PBM contracts, including our contracts with MedImpact, Navitus, and Express Scripts, contain provisions that limit PBM use of our intellectual property related to our brand and platform and require PBMs to maintain the confidentiality of our data. While we have consistently renewed and extended the term of our contracts with PBMs over time, there can be no assurance that PBMs will enter into future contracts or renew existing contracts with us, or that any future contracts they enter into will be on equally favorable terms. Changes that limit or otherwise negatively impact our ability to receive fees from these partners would have an adverse effect on our business, financial condition and results of operations. Consolidation of PBMs or the loss of a PBM could negatively impact the discounts and prices that we present through our platform and may result in less competitive discounts and prices on our platform.

Our consumers use GoodRx codes at the point of purchase at nearby pharmacies. These codes can be used at over 70,000 pharmacies in the United States. The U.S. prescriptions market is dominated by a limited number of national and regional pharmacy chains, such as CVS, Kroger, Walmart and Walgreens. These pharmacy chains represent a significant portion of overall prescription medication transactions in the United States. Similarly, a significant portion of our discounted prices are used at a limited number of pharmacy chains and, as a result, a significant portion of our revenue is derived from transactions processed at a limited number of pharmacy chains. We have entered, and may in the future enter, into direct contractual arrangements with pharmacies, which we refer to as our partner pharmacies, to offer discount rates to consumers at such pharmacies.

If one or more of these pharmacy chains terminates its cash network contracts with PBMs that we work with, enters into cash network contracts with PBMs that we work with at less competitive rates, or to the extent a pharmacy chain has entered into a direct contractual arrangement with us, terminates such contractual arrangement, our business may be negatively affected. For example, a grocery chain took actions late in the first quarter of 2022 that impacted acceptance of discounted pricing for a subset of prescription drugs from PBMs, who are one category of our customers, and whose pricing we promote on our platform. This had a material adverse impact on our results of operations for the year ended December 31, 2022 and may continue to have a material adverse impact in future periods. Such actions could be exacerbated by further consolidation of PBMs or pharmacy chains. If such changes, individually or in the aggregate, are material, they would have an adverse effect on our business, results of operations and financial condition. If there is a decline in revenue generated from any of the PBMs we contract with, as a result of consolidation of PBMs or pharmacy chains, pricing competition among industry participants or otherwise, if we are unable to maintain or grow our relationships with PBMs and pharmacies or if we lose one or more of the PBMs or partner pharmacies we contract with and cannot replace such PBM or partner pharmacy in a timely manner or at all, there would be an adverse effect on our business, financial condition and results of operations.

We do not generate a significant percentage of revenue from mail delivery service. To the extent consumer preferences change, including as a result of public health concerns, we may not be able to accommodate sufficient demand for mail delivery service which may have an adverse effect on our business, financial condition and results of operations.

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We rely on the performance of members of management and highly skilled personnel, and if we are unable to attract, develop, motivate and retain well-qualified employees, our business could be harmed.

Our ability to maintain our competitive position is largely dependent on the services of our senior management and other key personnel. In addition, our future success depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees. Competition for such personnel is extremely intense. To attract and retain such personnel, we have had to offer, and believe we will need to continue to offer, highly competitive compensation packages. However, we have experienced and may continue to experience difficulties in hiring and retaining these personnel at compensation levels consistent with our existing compensation and salary structure. Some of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment. We have needed and may in the future need to invest significant amounts of cash and equity to attract and retain employees and we may not realize sufficient returns on these investments. In addition, the loss of any of our senior management or other key employees, the failure to successfully transition key roles, or our inability to recruit, develop and retain qualified personnel could materially and adversely affect our ability to execute our business plan and we may be unable to find adequate replacements. For instance, on April 25, 2023, Trevor Bezdek and Douglas Hirsch transitioned from their prior roles as our Co-Chief Executive Officers and our board of directors appointed Scott Wagner as Interim Chief Executive Officer. Our board of directors is currently engaged in a search process for a permanent Chief Executive Officer and any inability to successfully transition the Chief Executive Officer role and/or attract a permanent successor for such role could adversely impact our business.

All of our employees are at-will employees, meaning that they may terminate their employment relationship with us at any time, and their knowledge of our business and industry would be extremely difficult to replace. If we fail to retain talented senior management and other key personnel, or if we do not succeed in attracting well-qualified employees or retaining and motivating existing employees, our business, financial condition and results of operations may be materially adversely affected.

We may be unable to realize expected benefits from our restructuring and cost ~~structure into prioritized areas that~~reduction efforts and our business might be adversely affected.

In order to operate more efficiently and control costs, from time to time, we ~~believe will drive incremental long-term growth~~announce restructuring plans and ~~improve~~other cost savings initiatives, which include workforce reductions as well as re-balancing of products and services to align with our business strategy. These plans are intended to generate, among other things, operating expense savings and improved margins ~~may not achieve our intended outcome.~~

Inand profitability. For example, in August 2022, we implemented a reduction in force affecting ~~approximately 140~~ employees ~~or 16%,~~ of our ~~wholly owned~~wholly-owned subsidiary GoodRx, Inc.’s workforce in order to consolidate functions and eliminate or reduce investment in areas of lower focus. ~~In connection with these actions, we have incurred termination costs,~~Additionally, in August 2023, our Board approved a plan to de-prioritize certain solutions under our pharma manufacturer solutions offering, which ~~include pre-tax charges, estimated between approximately $5 million and $7 million for the reduction in force. This~~included (i) a reduction in force ~~is expected~~involving employees of our wholly-owned subsidiaries GoodRx, Inc. and vitaCare; (ii) the entry into retention agreements with certain other employees for the purpose of maintaining business continuity; and (iii) the restructuring or termination of certain solutions and arrangements with our clients to ~~result in~~better align with our strategic goals and future scale. We expect to generate approximately ~~$23~~$18.0 million to ~~$25~~$22.0 million of annualized run rate cash savings ~~associated with~~as a result of the ~~approximately 140 employees, excluding~~actions taken under the ~~hiring~~plan.

We may undertake further restructuring actions or workforce reductions in the future. These types of ~~new employees or other additions to our costs~~restructuring and ~~expenses.~~

~~The~~cost reduction ~~in force~~activities are complex and may result in unintended consequences and costs, such as unforeseen delays in the implementation of our strategic initiatives, business and operational disruptions, decreased employee morale, loss of institutional knowledge and expertise, ~~attrition beyond the intended number of employees, decreased morale among our remaining employees,~~ and the risk that we may not achieve the anticipated benefits of the reduction in force. In addition, while positions have been eliminated, certain functions necessary to our operations remain, and we may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees. Thepotential impacts on financial reporting. Any reduction in workforce could also make it difficult for us to pursue, or prevent us from pursuing, new opportunities and initiatives due to insufficient personnel, or require us to incur additional and unanticipated costs to hire new personnel to pursue such opportunities or initiatives. If we ~~are unable to realize~~do not successfully manage our current initiatives and restructuring activities or any other similar activities that we may undertake in the ~~anticipated~~future, expected efficiencies and benefits ~~from the reduction in force,~~might be delayed or ~~if we experience significant adverse consequences from the reduction in force,~~not realized, and our business, financial condition, and results of operations may be materially adversely affected.

Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds,

and Issuer Purchases of Equity Securities

Unregistered Sales of Equity Securities

None.

Use of Proceeds

On September 25, 2020, we completed our IPO. All shares sold were registered pursuant to a registration statement on Form S-1 (File No. 333-248465), as amended (the “Registration Statement”), declared effective by the SEC on September 22, 2020.

There have been no material changes in the expected use of the net proceeds from our IPO as described in our Registration Statement. ~~The remaining net proceeds from our IPO have been invested in investment grade, interest-bearing instruments.~~ As of September 30, ~~2022,~~2023, we ~~estimate~~estimated we ~~have~~had used approximately $244.4 million of the net proceeds from our IPO: (i) $164.4 million for the acquisition of businesses that complement our ~~business~~business; and (ii) $80.0

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million for the repurchases of our Class A common stock.

As of September 30, 2023, we had $642.5 million remaining net proceeds from our IPO which have been invested in investment grade, interest-bearing instruments.

Issuer Repurchases of Equity Securities

The following table presents information with respect to our repurchases of our Class A common stock during the three months ended September 30, ~~2022.~~

Approximate Dollar

Value of Shares that

Total Number of Shares

May Yet Be Repurchased

Total Number of

Average Price Paid

Repurchased as Part of

Under the Program

Period

Shares Repurchased (1)

per Share (2)

Publicly Announced Program (1)

(in thousands)

July 1 - 31

—

$
—

—

$
—

August 1 - 31

—

$
—

—

$
—

September 1 - 30

2,818,828

$
6.37

2,818,828

$
148,279

Total

2,818,828

2,818,828

2023.


Period	Total Number of Shares Repurchased (1)	Average Price Paid per Share (2)		Total Number of Shares Repurchased as Part of Publicly Announced Program (1)	Approximate Dollar Value of Shares that May Yet Be Repurchased Under the Program (in thousands)
July 1 -31	—	$	—	—	$	—
August 1 - 31	1,137,531	$	6.78	1,137,531	$	122,130
September 1 - 30	—	$	—	—	$	—
Total	1,137,531			1,137,531

______________________

(1)

The repurchases are being executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, ~~including~~which may include repurchases through Rule

10b5-1 plans. See Note 10 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information related to our stock repurchase ~~program.~~

program, which was approved by our Board on February 23, 2022 and announced on February 28, 2022.

(2)

Average price paid per share includes costs associated with the ~~repurchases.~~repurchases, including the estimated excise tax on the repurchases as imposed by the Inflation Reduction Act of 2022.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Insider Trading Arrangements

During the three months ended September 30, 2023, other than as described below for Romin Nabiey, our Chief Accounting Officer, none of our directors or officers (as defined in Section 16 of the Exchange Act), adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any "non-Rule 10b5-1 trading arrangement" (as defined in Item 408(c) of Regulation S-K of the Exchange Act).

On August 11, 2023, Romin Nabiey, our Chief Accounting Officer, early terminated a trading arrangement intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). The plan was originally adopted on March 3, 2023 for the sale of up to 137,398 shares of our Class A common stock until June 7, 2024.

Table of Contents

~~None.~~

Item 6. Exhibits

Incorporated by Reference

Filed/
Exhibit
Number

Exhibit Description

Form

File No.

Exhibit

Filing
Date

Furnished
Herewith

    3.1

Amended and Restated Certificate of Incorporation.

8-K

001-39549

3.1

9/28/20

    3.2

Amended and Restated Bylaws.

8-K

001-39549

3.2

9/28/20

    4.1

Form of Certificate of Class A Common Stock.

S-1/A

333-248465

4.1

9/22/20

    4.2

Form of Certificate of Class B Common Stock.

S-8

333-249069

4.4

9/25/20

  31.1

Certification of Co-Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).

*

  31.2

Certification of Co-Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).

*

  31.3

Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).

*

  32.1

Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

**

  32.2

Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

**

  32.3

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

**

101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

*

101.SCH

Inline XBRL Taxonomy Extension Schema Document

*

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

*

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

*

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

*

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

*

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*

Incorporated by Reference

Filed/
Furnished
Herewith

Exhibit
Number

Exhibit Description

Form

File No.

Exhibit

Filing
Date

3.1

Amended and Restated Certificate of Incorporation

8-K

001-39549

3.1

9/28/20

3.2

Amended and Restated Bylaws

8-K

001-39549

3.2

9/28/20

4.1

Form of Certificate of Class A Common Stock

S-1

333-248465

4.1

8/28/20

4.2

Form of Certificate of Class B Common Stock

S-8

333-249069

4.4

9/25/20

10.1†

Fourth Amendment to First Lien Credit Agreement, dated July 7, 2023

10-Q

001-39549

10.6

8/9/23

10.2†

Separation Agreement & Release, by and among GoodRx Holdings, Inc., GoodRx, Inc. and Babak Azad, dated July 19, 2023

8-K

001-39549

10.1

7/27/23

31.1

Certification of Interim Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)

32.1

Certification of Interim Chief Executive Officer pursuant to 18 U.S.C. Section 1350

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350

101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

______________________

*Filed herewith.

**Furnished herewith.

†

The annexes, schedules, and certain exhibits to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request.

34Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


					GOODRX HOLDINGS, INC.

Date: November ~~8, 2022~~ 9, 2023			By:	/s/ ~~Douglas Hirsch~~ Scott Wagner
			Scott Wagner		~~Douglas Hirsch~~
					~~Co-Chief~~Interim Chief Executive Officer
					(~~principal executive officer)~~Principal Executive Officer)

Date: November ~~8, 2022~~ 9, 2023			By:	~~/s/ Trevor Bezdek~~
		~~Trevor Bezdek~~
		~~Co-Chief Executive Officer~~
		~~(principal executive officer)~~

~~Date: November 8, 2022~~	~~By:~~	/s/ Karsten Voermann
					Karsten Voermann
					Chief Financial Officer
					(~~principal financial officer)~~Principal Financial Officer)

Date: November ~~8, 2022~~ 9, 2023			By:	/s/ Romin Nabiey
					Romin Nabiey
					Chief Accounting Officer
					(~~principal accounting officer)~~Principal Accounting Officer)


(in thousands, except par values)	September 30, 2022			December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	728,786		$	941,109
Accounts receivable, net		120,886			118,080
Prepaid expenses and other current assets		28,716			29,638
Total current assets		878,388			1,088,827
Property and equipment, net		22,287			21,612	��
Goodwill		415,256			329,696
Intangible assets, net		125,900			88,791
Capitalized software, net		71,299			44,987
Operating lease right-of-use assets		27,971			27,705
Other assets		25,958			6,007
Total assets	$	1,567,059		$	1,607,625
Liabilities and stockholders' equity
Current liabilities
Accounts payable	$	10,855		$	17,501
Accrued expenses and other current liabilities		61,025			50,732
Current portion of debt		7,029			7,029
Operating lease liabilities, current		6,057			5,851
Total current liabilities		84,966			81,113
Debt, net		652,814			655,858
Operating lease liabilities, net of current portion		32,551			33,592
Deferred tax liabilities, net		650			244
Other liabilities		7,675			5,138
Total liabilities		778,656			775,945
Commitments and contingencies (Note 8)
Stockholders' equity
Preferred stock, $0.0001 par value; 50,000 shares authorized and zero shares issued and outstanding at September 30, 2022 and December 31, 2021		—			—
Common stock, $0.0001 par value; Class A: 2,000,000 shares authorized, 82,333 and 85,028 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively; and Class B: 1,000,000 shares authorized, 313,732 and 315,534 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		40			40
Additional paid-in capital		2,234,926			2,247,347
Accumulated deficit		(1,446,563	)		(1,415,707	)
Total stockholders' equity		788,403			831,680
Total liabilities and stockholders' equity	$	1,567,059		$	1,607,625


	Class A and Class B Common Stock					Additional Paid-in			Accumulated			Total Stockholders'
(in thousands)	Shares			Amount		Capital			Deficit			Equity
Balance at December 31, 2021		400,562		$	40	$	2,247,347		$	(1,415,707	)	$	831,680
Stock options exercised		749			—		3,699			—			3,699
Stock-based compensation		—			—		32,161			—			32,161
Vesting of restricted stock units		822			—		—			—			—
Common stock withheld related to net share settlement		(364	)		—		(9,561	)		—			(9,561	)
Repurchases of Class A common stock		(5,637	)		—		(83,765	)		—			(83,765	)
Net income		—			—		—			12,293			12,293
Balance at March 31, 2022		396,132		$	40	$	2,189,881		$	(1,403,414	)	$	786,507
Stock options exercised		1,176			—		4,109			—			4,109
Stock-based compensation		—			—		33,466			—			33,466
Vesting of restricted stock units		1,059			—		—			—			—
Common stock withheld related to net share settlement		(459	)		—		(4,727	)		—			(4,727	)
Net loss		—			—		—			(1,415	)		(1,415	)
Balance at June 30, 2022		397,908		$	40	$	2,222,729		$	(1,404,829	)	$	817,940
Stock options exercised		245			—		1,271			—			1,271
Stock-based compensation		—			—		32,151			—			32,151
Vesting of restricted stock units		1,256			—		—			—			—
Common stock withheld related to net share settlement		(525	)		—		(3,269	)		—			(3,269	)
Repurchases of Class A common stock		(2,819	)		—		(17,956	)		—			(17,956	)
Net loss		—			—		—			(41,734	)		(41,734	)
Balance at September 30, 2022		396,065		$	40	$	2,234,926		$	(1,446,563	)	$	788,403


(in thousands)
Cash	$	149,877
Fair value of contingent consideration payable		1,684
Fair value of contingent consideration receivable		(19,741	)
Total estimated purchase consideration	$	131,820


(dollars in thousands)	Fair Value		Weighted Average Useful Life (in years)
Developed technology	$	30,000		5.0
Customer relationships		21,000		11.0
Tradename		1,000		3.0
	$	52,000		7.4


						Weighted
				Weighted		Average
				Average		Remaining	Aggregate
				Exercise		Contractual	Intrinsic
(in thousands, except per share amounts and term information)	Shares			Price		Term	Value
Outstanding at December 31, 2021		13,568		$	7.55	7.3 years	$	341,929
Granted		1,163			17.17
Exercised		(749	)		4.94
Expired / Cancelled / Forfeited		(281	)		16.80
Outstanding at March 31, 2022		13,701		$	8.32	7.0 years	$	165,307
Granted		3,782			6.69
Exercised		(1,176	)		3.49
Expired / Cancelled / Forfeited		(386	)		9.47
Outstanding at June 30, 2022		15,921		$	8.26	7.9 years	$	8,326
Granted		2,635			6.10
Exercised		(245	)		5.18
Expired / Cancelled / Forfeited		(607	)		11.70
Outstanding at September 30, 2022		17,704		$	7.86	7.9 years	$	5,395
Exercisable at September 30, 2022		7,492		$	6.65	6.3 years	$	5,395


	Restricted			Restricted Stock Units for Class A			Restricted Stock Units for Class B			Weighted Average
	Stock			Common			Common			Grant Date
(in thousands, except per share amounts)	Awards			Stock			Stock			Fair Value
Nonvested restricted stock awards or restricted stock units at December 31, 2021		939			4,431			5,645		$	29.64
Granted		—			2,283			—			17.88
Vested		—			(309	)		(513	)		31.83
Forfeited		—			(201	)		—			38.32
Nonvested restricted stock awards or restricted stock units at March 31, 2022		939			6,204			5,132		$	27.15
Granted		—			8,256			—			6.80
Vested		(470	)		(546	)		(513	)		22.24
Forfeited		—			(472	)		—			22.91
Nonvested restricted stock awards or restricted stock units at June 30, 2022		469			13,442			4,619		$	18.60
Granted		—			8,080			—			6.18
Vested		—			(743	)		(513	)		23.80
Forfeited		—			(1,280	)		—			16.97
Nonvested restricted stock awards or restricted stock units at September 30, 2022		469			19,499			4,106		$	14.25


	Three Months Ended
	September 30,		June 30,		March 31,		December 31,		September 30,		June 30,		March 31,
(in millions)	2022		2022		2022		2021		2021		2021		2021
Monthly Active Consumers		5.8		5.8		6.4		6.4		6.4		6.0		5.7


	Three Months Ended September 30,				Change
(dollars in thousands)	2022		2021		$			%
Prescription transactions revenue	$	131,216	$	155,652	$	(24,436	)		(16	%)
Subscription revenue		26,450		16,226		10,224			63	%
Pharma manufacturer solutions revenue		24,499		18,548		5,951			32	%
Other revenue		5,153		4,676		477			10	%
Total revenue	$	187,318	$	195,102	$	(7,784	)		(4	%)


							Approximate Dollar
							Value of Shares that
					Total Number of Shares		May Yet Be Repurchased
	Total Number of		Average Price Paid		Repurchased as Part of		Under the Program
Period	Shares Repurchased (1)		per Share (2)		Publicly Announced Program (1)		(in thousands)
July 1 - 31		—	$	—		—	$	—
August 1 - 31		—	$	—		—	$	—
September 1 - 30		2,818,828	$	6.37		2,818,828	$	148,279
Total		2,818,828				2,818,828