GDRX - Earnings call transcript Q2 2022

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the GoodRx Second Quarter 2022 Earnings Call.

As a reminder, today's conference call is being recorded. I would now like to introduce your host for today's call, Whitney Notaro, Vice President of Investor Relations. Ms. Notaro, you may begin. .

Whitney Notaro

afternoon, the welcome second Good conference GoodRx's operator. for call quarter you, everyone, to and earnings Thank of XXXX.

are Executive Voermann, today Co-Founders me Doug Trevor and Joining Bezdek, and Co-Chief Chief Officer; our Karsten and Financial Officer. Hirsch our

our update actual change. even management's made this any could subsequent our to XX, materially Form indicated or these to XXXX, as estimates differ by cause ended of and strategies, of remind the to for Commission statements. like results business contain call. to the statements All actual forward-looking cause fact with and of important in forward-looking anticipated Securities be the factors may discussed matters goals filings if date Form we of of this on the are of begin, achievements made impact performance this issue different call, on that risks, call involve the statements the ended statements, These XX, nor report factors. statements. COVID-XX that regarding considered Factors and These from or future Any any statements, to achievements promises disclaim unknown historical XX-Q we section impact market grocer year other call everyone for December events statements the as but implied performance including the management's Exchange Factors Risk our our Before do guarantees, on and by forward-looking opportunity, the results, results, to XX-K and on obligation our statements performance, forward-looking updated annual this neither views financial from I'd those or business. cause and quarterly will be June known expressed report our such forward-looking on on not by XXXX, plans, statements objectives, quarter materially relate our other our and should our the expected uncertainties represent

reconciled at In addition, letter, nearest we the Investor a may GAAP metric I'd well. will also reference which are to the turn overview found page shareholder to certain there in can be it on call metrics, to of available the become With that remind which replay Doug. our of non-GAAP as this everyone shortly that, website Relations like investors.goodrx.com. I'll also company's over

Doug Hirsch

Good headwinds strengthen taking recent joining and our we're us. like we share actions performance as for thank you we're Today, the facing. would to to perspective our and the navigate business afternoon we on

our the need they Americans and have less by earnings be our I Trevor COVID track. contributed be quarter I, I we founders this with are would priority was GoodRx historical not reset anticipated expected, as margins you prescription quarter issue at they and our then first than our than no in stronger fourth we afford. cohorts price from helping a and On disappointed year, suspect We our that can feel get we expectations the both more performance growth We because same call, higher way. and healthcare earnings We offering on expect period can back say on significant discussed the did call. to and higher position. getting grocer this we both GoodRx shareholders, transactions that impacted the

and partners key review and our have on products embarked our the team with relationships to of Over ensure we that prepared for strengthened leadership business, months, top past we our several our the bottom a are significantly future. to

engagement medical our with efforts be doubling consumers, make and constituents down in other professionals our business. also that up will We

close We healthcare have America's amazingly devoted users with relationships and professionals.

XX. providers a NPS remarkable our shared, both As and with is we consumers previously

enter adjacent to our we've brand as of we, fully Solutions with an on trajectory cash executive And team, flow the returning proven us cash performance great ability want of exemplified have are you've as that focused offering. and We conversion know to scale. best-known level the the the Manufacturer significant you from markets, our to in from past. space Pharma seen by consistently operations. are We high in our We team's

we want our I to Finally, first addressed. very call that highlight was grocery earnings discussed issue on recently quarter

sale. grocery is we communication welcomed out chains the As rolled expect discounts point consistently to at to the GoodRx pharmacists, be of

taking on While and about to we're margin, growth over expectations, now been we're and reverse evaluating we results reality recognize every below business. both that better turn our to aspect to ability spending plans that a our and more prioritize working I'll investments year-to-date detail. the focus and enhancing speak We're our to Trevor our performance actions call aggressively execute. to and of confident with in has in

Trevor Bezdek

you, Doug. Thank

disappointed said, and higher in we're Doug to our performance, towards year-to-date As committed driving margin and by we're future. the growth

revenue of slightly was due issue performed expected The X% line effective hit first than revenue quarter effective of continued weekly We on grocery estimated we the which of better Prescription users we in anticipated. were second year-over-year the impact transaction due quarter issue exited million with the grocer particularly volume disappointing we issue. to was our declines $XX discussed, beginning transactions second Despite and to call. came to of quarter, our that has and the new headwind, adjusted EBITDA, greater of this we seeing subsequent before redirecting and as extent, revenue approximately ahead grocery through decreased post seen quarter retailers. subscriptions Manufacturer each the Pharma at earnings quarter revenue the the period for revenue, during prescription a our processed in expectations end. our March We the XX% the Solutions revenue

second to numbers prior close quarter the user were levels. period in New

issue the addressed. has mentioned, grocer Doug been As

situation to grocer the a address a needs. months and the consumers over last few also to satisfy that the We with in worked grocer's that way have GoodRx the jointly way in allows consumers collaboratively the serve and helps grocer

grocer more on at we second as pleased the are expected quarter Karsten provide shortly. and GoodRx the again third quarter enjoy impact a consumers our value benefits revenue the We who that affordability the and revenue impact detail partner. access of once can prescription will

going and the minimize potential prescription the actions for took During strengthen offering we second disruptions forward. quarter, to also transactions our

we In addition many grocer volume. stability. with with with ongoing discussed, meeting pharmacies pharmacies pharmacy as engaged represent work the Each broader to We've we with the been that to strongly occurred and and drive other as majority marketplace has network our our solutions challenges profitability. in the the we working remains conversations that also retailers success environment, retail pharmacy ratio ensure well grocer on stable. substantially. proactively grew believe and unique period, And of our macro vast volume the current to proactively collaborate to We issue are during mutual the PBMs

exception than In volume the X% this grocer, pharmacies of other fact, particular across with increased quarter-over-quarter. more

growth grocer. user mentioned, chose prices, largely offset the the in new of As decreased competitors our as by consumers strong many driven the quarter, fill or second user the attractive to needs out other grocers counts pharmacies GoodRx in with

While we decrease significantly able revenue. were prescription users, grocer returning transaction down move and new to drove users effectively the were the in due issue to

users on behavior returning have checking mentioned a and, go This overall users our counts. volume from of returning returning call, given savings last reliable transactions been. to historically without As often earnings resulted of course, directly in user how our decrease GoodRx in prices the on grocer

was also we recognized network with ensure taken key. we've founded product actions building to are the to that trust addition we stability, consumers GoodRx, marketplace new prioritizing enhancements. In we When

all register So frictionless to access incentives in simple possible. significant and and macro in creating negatively Consumers to can use and Karsten new to we points active focused revenue, the with a services so we are conversion of This the speak platform account. was we care. created add and and most savings users as for likely price GoodRx our which that increase a that role to find will experience will touch and without as user search aspects funnel more developing their acquisition Today, could impact on to guidance. GoodRx, play friction will

However, deeper benefits help relationships and GoodRx proposition with even consumers of more our user us will experience. them compelling their journey value allow to we navigate the with healthcare better believe

manufacturer transactions information user our quarters allowing offerings other revenue in the compared making second create to other to and with prescription to pharma now as of of provide increase their was for in growth. over to we three years approximately monthly and of X% deliver quarter our areas brands We our it driven our the also revenue fees year-over-year than leverage revenue Subscription diversification ago, during more users subscriber doubling believe the expectations. ROIs rapid the each from with response our that as the and continued penetration to revenue us momentum continued years of manufacturers increase quarter in business Gold the we new users will time increase as to work subscription continued we the more line with. high offering XX% in and LTV in solutions primarily to products The up our base The with year-over-year in come. largely and by tools XX% just grew

to by growth. evidenced recognized the ability strong distinct and as consumers reach continues Our manufacturers providers to by both be

and We spend leverage more broad digital expect continued as on consumer year-over-year shift to pharma continue manufacturers they to spend provider ad returns recognize as growth our marketing pharma their and audiences. attractive

a to novel the which platform the our to the control. our access product platform from control branded Our contraceptive revenue healthcare growth recently facilitate Pharma's tremendous and access to at can a capabilities. and differentiation, of and announced healthcare X% and an consumers strength drive Pharma relationship solutions demonstrates penetrated a patient's value this with and less for journey. believe relates has finish, expand stage adds $XX novel where acquisition is particularly start medication we offering, it us the their key deliver Mayne deliver brand This our engage strategic us awareness of reach and the revenue. By process access vitaCare second among patients billion Mayne same this exciting adherence enhanced quarter a our birth of providers. element NEXTSTELLIS, TAM. manufacturer of focus manufacturer campaign to spectrum, rapid combining and awareness, to focus that location the to pharmacy Pharma gives to Even other innovative and extensive than with direct-to-consumer options. services to awareness birth awareness initiative increases broader Mayne as We'll solutions prescription with another of pharma We vitaCare, volume scaled campaign both of capabilities the to available healthcare with HCPs valuable enhances as build pharma providers contraceptive, bring medication our pharma contraceptive the across access We with yet build manufacturers and also aims

by the brand their brands solutions of driven penetration manufacturers, be to increasing deploys relationships growth expect each more us. and more of more pharma We with number

GoodRx into With in solutions of provider far, the an journey. and their there GoodRx believe customized platforms GoodRx enormous into and our to us have who in consumer provider throughout with so one We our they need opportunity providers providers' with a needs provider the rate providers' we continuing platform, while create patient to HCP offering since providers GoodRx sell with to June With patients outcomes. more US. becoming helping largest equips their offering for are support meet path them and are we opted healthcare and XXX,XXX to the the providers. innovative XXX,XXX also mode adding than using believe over prescribers our GoodRx XXXX more the opportunity incredible solutions unique to to the we tools HCPs, is more better of experience achieve

offerings, serve With patients in have us, unparalleled GoodRx a manufacturers of partners, providers enables the digital a care the opportunity physicians consumer to truly coordinated and and our fashion. and deliver that we platform and to educate our providers combination health

to combined Before I'd at GoodRx. talk and We've also and close, structure. margins high cost I high growth like about profitability historically

strong our levels. and and This today's the how and are offerings. one recently committed of taking at structure of all to dedication focuses continue to look so hard Raj much all and will a of We're grocer This the the we continued of our mission. improve we flow growth and issue, where by team the have the into operating was actions quarter. begun Despite our take margins our across increasing costs hired rate reprioritizing the of and in to collective We and commitment cost cash our both principal Beri, delivered expenses to we our margins business fueled COO, a to and revenue fourth is second do and spend quarter. from growth,

discuss care more GoodRx that, that on they price we to current need the recognize afford the it's results how it. and turn Karsten, has the environment to helping capture The With deliberate intend over macroeconomic financial for we spending, their choices make and pressure to prioritize can relevant. to never it I'll With consumers get putting at they Americans been health guidance. opportunity by to clear and our a

Karsten Voermann

had grew prescriptions issue $X.X Market-wise, baked our on and prescription when we development is decreased X% transaction. I'll which the year-over-year percentage earnings our estimated in in and fee largely a trends more both transactions generic consumers the Thank into a the slightly the earlier. decrease with volume, to levels the the the $XXX.X pre-COVID future for but guidance transactions estimate second as per grocer Revenue at transactions out prior $XX to the that is in was Prescription revenue back grocer which call section, to decreased therapy we quarter U.S., revenue mid-teens million, Trevor drove grocer discussed X% second of have May. quarter with month to per exceeding decreased X% you, Trevor. growth. expected the year-over-year at our starts, prescriptions $XXX.X of quarter in and MACs, I revenue the million quarter MAC, we last the historically guidance the new on the to higher in X% look most want point in due on positive PTR total had and in which impact detail per provided The million issue on to in discuss prescription you our million which disclosed impact the year-over-year like a estimated impact and guidance. we issue the more we a issue anticipated in meantime, new metrics in line

and subscription multiple grow million family primarily subscription monthly million. the up revenue Turning in The We X.X consumers.’ continued XX% program one-time members charge million subscription to year-over-year in an benefiting subscription our from year-over-year GoodRx by X% ended and also increase rapidly, serve revenue with to for planned. subscription in generally subscriptions, over X.X increase subscriptions subscriptions to offerings was planned quarter fees our increase we the Gold $XX driven since

solutions and quarter approximately revenue in $XX.XX, is we discussed with that which and those the subscriber million. quarter, XXX% for revenue to more when family higher-than-usual the we price-driven call, to which year-over-year reminder, to quarter Manufacturer work. time first level As due largely the are onetime million, by increase. expectations. down from XXXX, earnings the as response our fees. revenue fees the to This fees, to And XX% of Overall, and increase offer base subscribers year-over-year in with individual growth as subscriber and plans fourth in pleased base expected a Other Gold expectations subscription monthly contributed which were to catalyzed our includes the deliver second existing as superior Gold GoodRx in quarter we ROI grew first $X.XX the grew per Pharma work line we increased Gold new our in more Solutions quarter-over-quarter first continue the pharma revenue which history Subscription well, our for $X our and to respectively. $X.XX fees million with increase to one-time was we $X.X for with to related modestly manufacturers driven during and as of we set second $X.XX a quarter we Care. in in the the $XX.X in increased churn vitaCare,

technology prescription in to Product well in expenses by X.X% XQ P&L. has development as as This in revenue cost of to grocer compared and team revenue as of last million million and described The business. year. revenue materially of the investments higher driven the revenue XXXX. continued product. of in of comparable cost revenue and of down which million the operational was increase X.X% to million our vitaCare, the a or the earlier, a Cost $XX.X revenue $XX its of was which compared nature primarily percentage was $XX.X revenue due Moving issue $XX.X period the acquisition were increase to transactions of due impacted

were Excluding revenue $XX.X Sales XQ to development items, capitalization as and technology $XX.X The software. lower product compensation costs to increase million grocer issue team XQ expense million XX% our and and revenue partially development in brand. XX.X% expense lower stock-based expenses to to certain technology expense and incredible other XXXX. use rate we invest which XXXX offset to increasing higher qualified was of related quarter-over-quarter, to our of marketing of development of adjusted a of GoodRx advertising earlier adjusted contributed by continue and revenue. year-over-year. product and internal the and a in development were pharma expenses primarily in compared described as of modestly million with percentage the manufacturer product technology promotional the and Adjusted consumer was the goal spend, This building base $X.X decreased compared due

expense The our administrative and as year. was items, absolute General stock-based up marketing expense XX.X% in year-over-year flat adjusted quarter-over-quarter a of other compensation revenue dollars XX.X% XQ making sales and and and decreased to last revenue compared XXXX decrease approximately with Excluding percentage of largely the in connection $XX.X made period to expenses to $XX.X in was comparable non-recurring to was stock-based million higher year. the expense XQ $XX.X million were IPO, in last compared award million co-CEO due in our XXXX. compensation relating which primarily

million year. in increase adjusted administrative adjustments, revenue benefit, as XXXX. at percentage to awards by compared expense. contributed $X.X million, related well described only IPO. was as was percentage of compensation XQ stock-based due in expense of million as $XX.X in in to of compensation million million X% a by loss G&A loss was compared of tax $XX.X other compared second general of $XX.X time of the grocer decrease impacted last and our The the income stock-based year. which which $X.X decrease adjusted The was offset $XX.X the Net last year the co-CEO net expense the to year-over-year million in was quarter discussed these issue X.X% earlier a the of a this nonrecurring as This was we Net partially primarily grocer Excluding revenue. a issue to and made to decrease

these on our had vitaCare a addition XXXX quarter to the impact second also loss, a In extent. drivers, acquisition negative lesser of to net but

Adjusted Moving adjusted Adjusted grocer on. decreased $XX.X year-over-year to by XX% EBITDA primarily EBITDA to year-over-year, Adjusted all but are be adjusted EBITDA the EBITDA XX% net million. The to decrease and net income continued decreased a strong XX.X%. year-over-year adjusted income, margin driven in issue. margin $XX.X decreased million.

proportionate due While the with able we strong percentage this margin decrease on and in cost as flow other prescription the cash we're of the adjusted impact $XX on to to net to in revenue an marketing and the absolute year-over-year of still some well XX% are of made generate Even business, from able year continue more and cash of of transactions keep to expenses first of operating quarter. adjusted for the activities larger to and almost flat largely and generate grocer's million our EBITDA revenue. with still revenue from dollars the forms a larger quarter-over-quarter compared fixed a decrease basis, percent it quarter sales revenue

guidance. to on Moving

full have be and to response including, among because issue year user pricing the be at are this impact consumer difficult estimate others, several providing expectations that determined. variables, We to will to as there levels to the grocer be returning time year not continues of full

utilization a we normalized Given the the enough week state more estimate we to not grocer, only with data than have empirical on a reliably do have data of yet impact. and less

to total impact expected our to revenue issue the of the to approximately third million. is million. the approximately April as greater assumes compared be This For XXXX it was revenue June $XX quarter sequential quarter, to growth in $XX as we XQ grocer. The prescription the was for in the the expands in severe in as assumes transaction $XXX was million expect to plan loss related developed as impact this million impact year $XX at not gradual the as and and

for number we to exited mid-teens. will Trevor a the at we other mentioned, grocer weekly that a the quarter words, third immaterial. expect to reasons. July, meaningful volume quarter second the we lift the from volumes We revenue addressed be As do at where issue is the exited being already in benefit in grocer relative of believe lower quarter In few not XX% the second

First, than ago, in communication and it is time to less addressed and week level. takes issue the a for pharmacy changes the store reach

return how how of using they switched unclear many is the another to do form the or happen. their to it GoodRx. that quarter insurance grocer return, GoodRx will that at consumers Second, during quickly savings second And if will

has pricing Finally, higher many in be will and changed cases.

we that benefit reasons, time of minimal. impact after or For the all revenue that and these believe on period a QX for possibly and will QX be

engagement efforts In the $X funnel. the the the we of in by due third addition approximately the and issue, in approximately in friction impact earlier further transactions to prescription impact that the quarter to twice consumer discussed to fourth revenue higher Trevor quarter expect million grocer

with more will value us to tighter to them believe As deliver that allow our relationships we these create and Trevor the consumers future. said, efforts in

allow middle it will other across the build will our from also since believe to quarter. services or we future. not only transactions and third LTV in expands The to from effort as our offerings quarter impact higher the also this in fourth of products existing the that us users in prescription we but the We buy generate well began third as

due anticipating mix we the quarter-over-quarter continued modest well as revenue decrease per quarter. of expect shift, $XX in third reasons in prescription transactions volume approximately the PTR we're million the these For to as decrease MAC,

rolled This the from subscriber quarter lower subscription user revenue our is million moderately $X churn to third fee out line late entire we $X compared our base year. to be in earlier existing expectations due with the to to in in base. the the quarter from as second the expect increases by million We will second quarter

planning our needs. earnings Gold the focus quarter we of recurring members our strategic fact we that discussed of subscription long-term Gold, conditions, the we're multiple finds more chronic to more a that repositioning On specific audience from call, and value on prescriptions program, and believe other

out this Gold increase undertook In all of in program on the to offerings. when to prices we for increased one-time second our part a quarter. raised between Gold to that the our call, we in shared create a new existing of churn clear subscriber subscribers subscriber prices rolled price base. announced we've price a we expected When base repositioning, As quarter, added second we January XXXX one-time earnings reflect the we QX value we increase our in impact existing differentiation to our and the

third entering Gold churn. due quarter to a we're subscriber anticipated, with slightly we As smaller the base

a of the strategic As a offering reminder, rates. which on this future focuses growth repositioning may narrow audience, affect

sense offering the ensure consumers makes find the suits continue will to most needs. hard and them work GoodRx We that that for their to best

based drive also HCP fluctuation. some can of solutions approximately a large and pharma to XX% to consumer on range, opportunities end because we our can deals fairly on begun expect the earn both or quite swing We've advantage be take timing providing the We're and materially. can performance create We delivering to pre to individual manufacturer grow also revenue wide post-quarter XX% when revenue or actions year-over-year.

realize our revenue. of by more of from for year-over-year. decline We reason our year. a revenue rates of efforts flat and year-over-year revenue reflects in our will the which expect anticipate the majority quarter. XX% third third the issue than The made primary almost total in be is quarter guidance our transactions we prescription largely that Finally, We the the currently up period registration the for a last quarter that growth impact grocer loss revenue grocer, the negatively to revenue year-on-year in comparable other

adjusted EBITDA. to Turning

We adjusted approximately expect third EBITDA XX%. the quarter of margin

our of due on issue, compared in costs are Even some adjusted decrease we with EBITDA adjusted second the in quarter, still it of of the because margin revenue revenue still it and marketing to to the in revenue quarter-over-quarter a proportion of almost able a and of the we and mentioned, from and year absolute expenses of year-over-year issue. first to basis, larger revenue made the decrease this largely formed percentage able more fixed of flat dollars As XX%. other this quarter prescription a larger generate sales grocer an keep transaction percentage to but

adjusted have guidance EBITDA we than issue. driven by second lower than results, revenue quarter which factor margin the to primarily margin XX% lower Our An historical is vitaCare, is grocer our due additional our to the the time adjusted been which at indicated compression and profile EBITDA in adjusted single-digit a low more quarters. the would of few position, on a case acquisition, VitaCare a drag EBITDA. has expect negative historically for we be

also improving to margins. in want rates We are future to commitment, our increasing to and relative quarter. I adjusted reemphasize committed increases this EBITDA ensuring our to quarters growth

afford. now We're confident environment the can on spending our scrutinizing we to a focused at our adjusted EBITDA future. help mission a Americans and continue adjusted of greater with they macroeconomic leadership greater percentage All are And We've combination of continues we EBITDA price current the the to strong want drive they believe in expenses many of make of in all it that, grow. on And Q&A. of entails for flow-through been off increases makes and team I'll turn be to we're able Americans. over inflation costs to the rises, to need we as trade to With prioritize historically and to everything people's expenses as do reevaluating relevant us for that as efficiency a the to growing operator deliver That more and goals. these margin, more sure our ability the health get need the revenue. care case all today and to that we objective growth

Operator

first Our comes Instructions] Santangelo Glen of from from question Jefferies. the [Operator line

Glen Santangelo

I'll ask know we're two ask quick one. ones. I supposed to

that quick. when you I'll at to enter here. comments, say part come expect sort we'll do that And down normalized margin for outlook on sort you now rate you have issue growth the XXXX? a to in target but some sounds revenue consumer of grocer that it understand to you quarter And to had return be So you then side, as secondly, on growth is respect so your of be you're Trevor, down the and of mid-XX% With engagement. the that, QX, the substantially on margins back you're big it, it, exit doubling year-after-year like but I focused fourth

PTR per talking a MAC. in You're modest about decrease

this You margin highlighted of margins as second think release. product outlook XXXX? about, here we the move the half the development, trough in tech we also how the for in expenses XXXX? Is press the into And in should

Trevor Bezdek

very I'm for to have the question. to you this. going speak Thank much Karsten

Karsten Voermann

Hi Glen, Glen, margins to XQ two related overtime. questions to think Karsten generally the and I it's here.

I only the respect this said since guide way as of especially mostly it, XQ to to XQ prepared quite remains happened into particular didn't yet, issue of revenue, is best putting in we we issue all, addressing with our think, because of remarks, recently. with XQ, the challenging a the probably into first XQ impact grocer again, predict somewhat

actually So XQ guiding for that reason, today. we're not

that relative have a impact, million of indicated grocer XX% entirety are have we XQ the of for somewhat the expected around to $XX which quarter. drop that, XQ to represented revenue effects because levels from the XX% of into think I about there However, the the been expanded

again, that, expect $XX specifically And fourth as into -- the extend the achieved. that larger well. million impact. $XX in potentially to but we we million. not third quarter, about quarter that a expect for the beyond number just that talked The reason impact resolution one, only We So and was fact will to

of the addressing don't future-looking the on empirical So data much impact issue. that have we

Second, of GoodRx of perhaps lieu insurance coverage it's unclear many users and use their our payment, about return using switch to how of to GoodRx. in GoodRx insurance another that return how form users given the XX% will quickly have

Thirdly, be flex in grocer degree as will we pricing question the some higher expect at many our cases, and well. to

right you now. look to view question we respect is our our on quarter. that extremely an structure continue the beyond cost taking think I So second third the to With hard at the just had margins, we're impact expect

perspective, company. especially changed. fact that becoming continue we to return we the a we expectations believe talked and of that We've term, to can the believe Rule XX margin from in haven't aspire to So around our about that longer

I at hasn't those impacted impacts down bit, takes experienced that growth may level. higher think but this plus it step combined growth now little us right is with for that all, revenue changed what's down margin trajectory that get it in to period a the with to we've the necessarily extend grocer step onetime the

wanted sure I both. for but the make Sorry answer, to long I hit

Glen Santangelo

you. Okay. Thank

Operator

you. Thank

Draper Partners. Sandy Our next the Guggenheim from of line question comes from

Sandy Draper

be when to is million. quarter trying would $XX to it and back? better, I very uncertainty $XX could just $XX it the But -- you're another clearly can the I coming in Is doesn't that it slightly if that trying cause much. make question. up the just $XX impact decline can million it million happen happen for starts bigger? I'm getting to this make expecting million get in and just there anything there now to down the that step to Thanks. I'm so Because it point we would That further what -- those would just why seems questioning was down, like line asked I third it's seem see response quarter? different million second that could the in to helpful. follow-up understand, of may to a don't further? follow is at I know appreciate -- Maybe that like anything angle. Thanks on the try don't stepping Glen's appreciate Totally that. when to the $XX way,

Karsten Voermann

shift a that's bit situation, could be XQ. from is the same that cause the than that, that because the counterbalancing prices to to levels able same particular I larger we that impacting which at about But issue in Sure. now, And now. have that we've consumers nothing extrapolating a I speaking see utilize. a talked from would are addressing job about issue we of be see that bigger. data the consumer where demand hence to drop [indiscernible] pricing, of see think happen a XQ the a speaking changes I if we're about. increase don't think the pharmacies gone further the and bit are seen have being given here. of and we with the from could associated We've XQ. right Karsten little exacerbation remarks will usage seeing XQ to take that's the consumers we're talked from we to the extrapolating narrowly question fact scripted see that that levels likely time issue and impact nice wherever I we reality anticipate the we to on the to Sandy. some we'll done It's at limited time, of today, -- place to the more also and respect little We talk said, potentially do And had empirical about best. likely case, can with That the

X% average, other why, as the scripted about remarks, Trevor of that's articulated in growth places. we've in So a on seen, volume

a So that deleterious little if I'm little more or sure totally increase than expected. be not prices less would a

million think we've about view call and the And about I in the and impact. focusing be quite we aggressively have of your funnel it that on realistic consumers, about issue on increased question XQ one may little that outside that that think So And looking bit talked grocer think on about talked about XQ. the like a engagement we we of also in impact the I we're answer taken a $X only was could with double other some it. to call

potentially ones that's So we Sandy. together that the useful, hope see us. impacting elements realistically I those two are

long the sorry And for response.

Sandy Draper

That’s queue great. jump question long keep in Yes. I’ll the Thanks. and back the

Trevor Bezdek

you Thank

Operator

you. Thank

Davis the . SVB from comes question line next of Our Securities. Stephanie from

Stephanie Davis

everything more go their in where ratable of Karsten because could will the Krogers the renegotiated or well if out volumes that broader resolution if line their are about majority pricing pricing I shakes the to was broader way back and congrats to the us of before, wondering base? how levels see talk the your as base? historical will on in you being volumes resolution. is and the post grocer we with going So more reset as compares to distribution a pricing to for prices

Trevor Bezdek

the much for Thank question. you very

relationship sustainable that are have to really GoodRx regards But as a We we happy about, been the more in We pleased sensitive, users believe these they pay, all partner. -- of to manage prices trade-off to are also now the consumers the otherwise the consumer, asked addressed, consumers with sustainably. but that volume is grocery value dynamic. are are highly know what higher some to we will at relative the we're the The GoodRx. having you be discounted are for for were grocer's aligned value price price they And and and the parties, have extremely pharmacy. might strategically pricing grocer Pharmacies grocer they and prices the previously. -- who this choice specifically that there

have really we're pleased access. So they that that will

Karsten Voermann

And Stephanie, I'm for again. going just Karsten sec in this as is to well. jump a

of will think being expect pricing to we likely medications prices in show more now more we other the grocer up that on point is one retailers. end most I for prices at similar lines

just price. lowest to work seeing pricing new what saw generally we next retailers, shifted and on marketplaces in based the other when at went users quarter, the their there So second

up they period we to average, point, prices pharmacies last. pretty shift that retailers your to But all saw mean volume and the other that did volume that found those a attractive. be So continuing to just on picked quite during this much

Operator

you. Thank

Our BofA. Michael next of Cherny from line comes question from the

Michael Cherny

the of the at taking about as And I to and got the think impact out there shift volumes only for about mentioned the same in you appreciate lines going of maybe those able being environment, still how participating beginning to just that to we pharmacies. other that find question. your you traditional along had network. thoughts, at time, to they placement dynamic same you about used Thank commentary weren't customers grocer competitive the that in And with the

that And forward your in, the they new growth so, terms method? does you across changed going grocers? how the grocery play rebalancing, various in that Is pharmacy partners? it went just that of in see different the off And these dynamic how of that terms that channel individuals and of other rebasing factor for to does where

Trevor Bezdek

Yes. question. that for you Thank

talked users, prior this users When As quite they we new volumes issue. saw new moved were new about largely -- we four were to other similar to the user to are the retailers.

drugs there. a historically, some directly up stability first and move existing retailer users without always do go down, often However, are checking -- -- GoodRx to of have prices because, relative while there's

existing want been we that the engagement on remarks, of to about we we've one existing prepared and reasons very that's can sure the and driving it So, on because spoke in make focused learn move change we that them make something or just in the about about a user future. information can customers side into else get on learn and about quicker quicker so price action that

Karsten Voermann

Yes.

to of a in the as see continue this situation. needs I more the environment able to that's point, long now the Trevor's that, the to through sustainable a to going to to we're process, adding to manner of individual specific think work in we're I create we're And with benefit run. each to pharmacies reality continue their we going with that be is think meet to to continue going the forward address see going that move

Operator

you. Thank

from comes of Stanley. Morgan Hettenbach question from next Craig Our line the

Craig Hettenbach

A lot comment but the of broadly, did on you the more pharmacies. is the grocer, focus for difficulty a that of number

see wanted how terms the the basis? and so, of And in about broader pricing a just you're of thinking for that more to on economics means business that what

Trevor Bezdek

Yes. I appreciate the question.

to been to in engaging and pharmacy. that facing unique And network question, changes, seen is believe a very environment is for pharmacies the challenges. each is we your macro really that proactively pharmacy the have pharmacy And What stable. we've that strongly different impact current We particular, with opportunities vast has volume. these relative of and each represent majority different the

and and profitability to on for working sustainable parties ecosystem. collaborate been we've success proactively economics the all to drive So our mutual solutions in

during pharmacy much in importance pharmacies, to closely the of and of trying network and are future. As and be just in effective our us different doing recognize really that. that. unique we’ve increased addressing in and job we're expeditious creatively from the believe, supporting And working many trying volume to challenges they're we're needs, priorities we to has better working address a the the example, grocer occurred, grow sure pharmacies this benefited strategic make period, to issue volumes tactics with on on help in additional But an each

Karsten Voermann

Yeah.

is Just jumping again. that, Karsten on this in

see think terms what of caused we ahead, one-time do Looking step having down in the a grocer I issue revenues.

value we've through GoodRx at together app, of strong. experience like We ability very future the more GoodRx to than integrations our the also at have that's positive of proposition on our CVS in by opportunity. Aid is market the We pharmacy shows drive uses that, in with Walgreens, Gold time, that which help things growth going deep consumers is, part incremental a of it and don't rate items, with because impact XX% size et to it's program, counter. that a like the seen pharmacy impact And pharmacy of our as foot data enjoyed or MinuteClinic future work course, traffic top individual appointment our on Rite or tech doesn't believe years very And have lot shot you've attractive. And well, banners ads us that, the side, book cetera. do

us. I growth So we've relationship feeling the particular with question, again, like we're grocer outside I in the think retailers other a think, symbiotic and have seen, the volume given pharmacies highly

Operator

Thank you.

question next the from from ISI. of Mark Mahaney Evercore Our comes line

Mark Mahaney

had pending moves And commentary actually or the create partnership and for wanted Medical. opportunities any of you, acquisition maybe distribution on Amazon's you for very much. recent whether to of acquisition may I ask you Thank One Thanks. opportunities if some you? that

Trevor Bezdek

health Amazon business Thank you years. the for has the been pursuing question. for

And and Care. impact recent not to the on services efforts the an have have intention their of don't believe expect We any business. business. material move to space into We Medical Amazon with impact One this employer a further signals we our our on seen acquisition

Operator

you. Thank

Sheridan of Goldman next Eric Sachs. Our from comes from line question the

Eric Sheridan

Team. Hi

does in, question, that with get agreement moving clarifying road, from down the calls new normal it can of a you aware we're doctor earnings prescriptions? be terms dynamics of of Where could prescriptions. number backlog about of overall you. leaning two, has think agreement around over new lot the Thank some That couple So if a to just pandemic? And think that platform that as or timing the to seeing the are renewed the drive either away we growth elements visits improve doctor about first, customer in of in the agreement. and in do duration the terms visits number talked that the last if would renegotiated you're and have general that understand? grocer be you of away of The the the somewhere one. And in we or further broader partner, that we you return grocer, from how a expected move better

Trevor Bezdek

have Thank speak Karsten you I'll for to the question. these.

Karsten Voermann

the for But there that as Hi Eric, good feeling are really to confidential, are is well. fact with for the but future call. very the situation today, respect of the this so not of terms I can't about addressed, the on terms the just agreement go years the agreement, for we're therapy seeing to all at respect categories now, are and now they're of for couple time we're certainly like, almost a that of pre-COVID. the at that they sort first for approaching new the levels the therapies therapy starts starts time With seeing first that in

previously to period. now data, sort index is converging where was I when back generally of the to data the that So look at back COVID seeing I'm the XXX it of the

from we view as generally So positive. perspective, that that

is the our data, I think issue we create that own noise. at grocer did look us hard though some for what's when

fully if it higher trends that normalize further. tougher We manifested rate utilization. for little to healthcare So that makes anticipate us into continue a a turn of see could the case, in our do that's tailwind as to it

Operator

you. Thank

the next question comes JPMorgan. Doug of Our from Anmuth from line

Doug Anmuth

Thanks.

about there. an up But talk you think mentioned then more issue. GoodRx going could it Just about for hoping back rates basis, in modest what little And you to going MACs I just take also per with I decrease know on a prescriptions for the pharmacy? PTR that pricing talked means you overall a grocer consumers for was bit forward? Thanks.

Trevor Bezdek

Karsten?

Karsten Voermann

grocer similar it's And other has pricing in we to those Karsten more will think implications. that most that retailers. few I Sure. Yes, medications for at be the here. expect Doug, a now

reach is mainly we one don't because historically, scripts per and more concentration had this a they other think respect to MAC was historically. economics, higher from they're revenue than the believe our at levels the retailers. I pricing grocer filled grocer perspective, good, MAC, PTR With did

that functional held as The means prices up, formulaically all other go a the go larger is take denominator take that fall. because expect constant, rate rate down simply as likely that will else will

we think will see those to impacts So some degree. I

we to we have that that I is shift think the evolve the smaller mix and sequential into We going see could mix as going the as quarter potential with other forward, the per to we'll potentially continues flux happening also thing that see drop Mac. beyond PTR single-digit some in third low another shift that in percentage evolving third quarter sort well. of see continue

Operator

Thank you.

line from Our next Charles the from question of Rhyee Cowen. comes

Charles Rhyee

regards to your little agreement a on I is a Just contractual for what here, an all a that resolution and and we your little role between role having last dispute of the is point in with all grocer. or to them wanted come price grocer. explain to talking PBMs, the get PBMs their understand your a a the having cheaper of If sort about showing little sort of that facilitating on with behalf bit bit we're more But more the their the was issue mean, understanding what resolved you PBMs? quarter Just I'm talking at dispute your you've quarter really -- bit of was or about them role of programs. its is was is here all to a a seeing in this just Thanks. to for In the best the byproduct facilitate and seem -- to looking issue understanding separate the a negotiating recall, algorithms of here? get more this I card this isn't the to sort trying into discount you What about option. obviously with that number its Can terms members reimbursement impact that from be clarify grocer grocer in to a my more the bit was of grocer better were trying of issue. all

Trevor Bezdek

been the been it's We spoke Thank happy. you addressed for the about We're very addressed, and very recently. question. GoodRx

next enjoy Over provided I'm platform agreements not a specifically discounts of sale. be who going importantly, we affordability able There many be different pharmacist, at GoodRx consistently to prescription and speak pleased we days, so GoodRx as point that involved and at up to on few of the accepted communications pricing sort value the the grocer benefits parties of this will the be But GoodRx the around are will consumers most a to we're between acceptance, here, will access partner. parties. discounted

all needs players of that by And We that we economics being prices bit broadly before, a make all met being and are help disappointed to that that available that are, sustainable I are occurred. possible. really affordable disruption proactive, as extremely the though, accessible make we to spoke participants this as as the just ensure of marketplace all sure are

known in so trying making And GoodRx brand to can to is we helpful in best play role do the our where a functioning of marketplace. that we want be space.

base. consumer a We have large devoted

We have a large HCP base.

have We that business. scale platform the monthly. of opportunity visitors of the to millions gives all on And our grow us and

to with able of the do different collaboratively be all to happy and proactively that marketplace we're participants. So

Operator

you. Thank

comes question James. from next line Ransom John from the Raymond Our of

John Ransom

afternoon. Hi. Good

get has grocer, gone quarter. said got exercise, to versus clear, that. you of customers back happen, rate if I'm those to not the back, fourth think customers the you down What -- that say going renegotiation. all everything the normal, back. would those don't gross that's back reset those was, it in know pro to be get the margin So you with what your all you particular seven? just all grocer customers I say, all But I let's before take inferring but specifically forma in this But where be theoretical

Trevor Bezdek

this. I'll let to Karsten speak

Karsten Voermann

here. Karsten Hi, John, it's

this would margin relates in question ecosystem of the what's now -- shift, over-indexed mix of be the sort is with and what the situation. combination anymore in impact our addressing the gross that to, of not think given association I the of hey, grocer

you to able Just may did be asking, the got that to I echo little because sure Does -- it yes, I a you're question maybe now. speak not back right make differently? said assume, right. I

pricing the that get talked didn't I PCR this in change bit impact an a think if shift and on little that around mix earlier we the of right, both per had what So I the the is impact and MAC question it. to about

again MAC price it's because going the rate. this of higher in per and down take So rate potentially because impact of terms were MAC slightly of pushing of volumes diminished transactions up, grocer PTR take per the

some basis, So think I factors a on all would gross those degree. net margin to impact

So said in PTR versus significant. not question the ones, again, prepared in is other the the like differences we that remarks MAC, per

gross impact would be also not margins the So that significant. on

Operator

you. Thank

Deutsche Hill the Our of next question George line Bank. comes from from

George Hill

margin historical guidance just margin bit the grocers, little that the profile agreement? the volume -- grocer the …for from kind terms. in business a the the the a of EBITDA we Should is taking attainable with reason change in in terms EBITDA So there lower into question. at new more. the the old that kind ex think and is the that would new I And an guiding wanted grocer QX, meaningfully the profile basically, terms the expect of not -- amount ranges that's like the relation change are the the guys very to under of you that delve or is largely to of is to beside historical drag to to margin? vitaCare change margin of margin business under if small of the improve in the it at by or is historical gross

Karsten Voermann

Hey, George, Karsten here again.

with ultimately the understanding margin drives for is impacts issue And the So, is for structure in like of in just transactions focused margins. PTR, if XQ change. associated ameliorating, And constant that the question combination the now driven PTR fact relatively cost are prescription the effectively grocer that with drop now right, XQ kept until change but it's in on that what I'm both the the we sort lower. that by revenue we've and

the lot you be find with they grocer revenue would you done, what if potentially consistent, margins add more had the of have that consistent to that historically been a the back So were relatively kind would historically.

And over the say locations. at through. not material. just volume last it that that other of I those that complicated that at we seamlessly flowed the forward, sort the several as it promoting So, I lens pharmacies, period sort other new a is places, to saw of groceries, least weren't is the And discounts months, pricing not flow from, with we grocer of retailers, time, really for our these grocer we of in to at we're et looking reason is actually grow at question, when cetera. user in the think more volumes in whole revenue of this I issue question one associated as solely And than the that and sort again, grocer think the look

view particular agnostic, to comes too, volume through, John goes our I that this as of think sort to retailer is so the comes Ransom's through. near as long And and which we're question, as

going us a that Hopefully, what thing come back sense. to volume degree was volume going amount the the in had come higher, little grocer big sort thing. at we more grocer And diminished. historically, wasn't the it's margin, going a to sure of again take basis to of not and margin. rate back. we're is users a forward, is question and that who did the dramatic transactions On the the that but yes, that now do were It frequented And significant rates on monthly and a achieved what makes the was at with

Operator

you. Thank

Wells Stan from next comes of line Our Fargo. question the from Berenshteyn

Your now line open. is

Stan Berenshteyn

…my back comment to questions. Maybe Trevor the I to, go that just believe a remarks. prepared in

just you And the for users? with trying friction having incentives of something or lines of think users I or that said GoodRx. new that along to to I'm they may what's the the conversion lead just trying aren't register to discount a people understand going get it won't friction. on Is those register, I'm who there. understand of don't registered? that, as to of if source they acquisition

Trevor Bezdek

places in you as Thank a or you a additional capabilities. reason more information reason for for doing be provide variety features in -- trying like and consumers such mentioned, of question. they'll discount give that for product for to the us their we're account-related Yeah, the to the And opportunity just deeper user journey. a more just for

their so And health users just believe to more assist our But care conversion short-term. is and choice just opportunities a in overtime, users right the more robust because the the of And number in that we impact with may experience. it journey. user gives us funnel this

it We We each offering. personalizing LTV us those user more. the journey other then and helps And in transactions better. hopefully prescription areas health so by let experience hopefully enable our of and users And care let of that potentially monetize them increase just business our to navigate also. those

Doug Hirsch

is also We've about pricing, refill it's offering just And I Yeah. Medicine And actually out -- outside cost have history, go every of really pharmacy week consumers last it doctor, for pharmacy the they to they you information, track called, launched name we're if throw potentially fill a great the encourage that And want try counter. that, a their Cabinet. GoodRx, I not robust a this allowing feature recently consumer to example just One entire the out. there. My you effects, their where of that the it's outside medication at. side the of about It's of take. to

can little a can provide keep so services slew information the a of on services actually and we ultimately, a And and consumers slew provide that keep management consumer, care can them of medication. that just bit them healthier of whole whole from help

we're iceberg things do can tip of the the just about on is of what the And we're engagement. terms this that in doing really, So we really excited here.

So thank you.

Operator

Thank you.

from line comes Valiquette question Steven next Our Barclays. the from of

now open. is line Your

Steven Valiquette

Great. question. taking Thanks my for

So hit maybe but this was touched just on again. a bit, it little

EBITDA higher Street impact of million transaction indirectly the $XXX full came or in million $XXX a $XX I little from the on quarter. at of guess just Just subscription results quarter from bit guess, XQ sort of last like and are operations well the the to million, better bottom underlying about XQ million company just the guided guidance, where on $XX $XX ultimately was everyone revenue more. EBITDA are one reported essentially where some Total also view right towards revenue $XXX million to day, which And million the in million that's end the grocer the driven quarter the line slightly EBITDA of questions $XX million other with talking than the with for $XX about feel in $XX better million, $XX unpack in to company the I the when did upside then I by your revenue. prescription in the primarily terms mitigating impact the perspective line as argue there factors? secondarily, was revenue could fall of million

guess I [Technical more Difficulty] So

Karsten Voermann

me think question, of got okay. think can think I most tail -- we it. heard your we the but Steve, Well, I hear of I lost we end Hopefully, you

But all, think, in million some our revenue, benefit we other are $XXX revenue generally, through to things did actions quarter, that great. in yeah, OpEx, first that think I that the I volume some us take optimize utilization important the I market yes, to from is the things, which volume, -- of think incremental were potentially able allowed coming like -- the during too. factors potentially more did, around among

the So bottom-line. muted top-line impact was between more and

applies product rate So have talked are now our some bottom-line has which led hitting less we and it and we to how engineering that and development the to relation sheet. deployment expense that balance some of changed the of things the tech given staff technology, being in that about of of the product to increased, our capitalization

as hopefully, an I further. think structure more the on cost the and found which we'll as marketing advertising we efficiency, other thing well, bit some talked particular, we a getting to that come anticipate sales perspective. In we our talked quarters little in focusing about from about, is

So from of able we through the an quarter that expect EBITDA harvest to benefits necessarily quarter. we perspective, didn't the some in advance were

Operator

you. Thank

the from comes question line Suisse. Jonathan Credit of from next Yong Our

Jonathan Yong

it attractive. of of the ..taking bit other won't growth back be kind given as mix pricing that. you're grocer, at together, moving of my going forward, of grocer putting change a shift the does a from question. the algorithm about kind I towards pharmacies, talking of, the away guess the grocer to all guess kind I the this kind

an to come necessarily all what's sounds on it of then almost million million, like I And that did kind your won't it items? does those that view You related outsized back. $XX to guess component have grocer? growth $XX

Trevor Bezdek

get affordability in GoodRx to Yes, the you. we want as seen people no have the of benefits broadly. don't can. they them that just growth Thank get we happy just outlook. We've the and believe We most demand. decrease at changes customers are for this importantly, We, the customers broadest very

and We for than current current that have needs ever with recessionary past. potentially the greater -- environment, affordable in even see environment I this we Americans have they think that have such getting this and healthcare even

we same, we reached we have has of that remaining are see that pleased all, most the growth very So are and this we the proactive. been addressed. But dynamics being

and working everyone, with-- a providing sustainable all robust and marketplace growth for let story. delivering future our on are and to And mission the marketplace trying Karsten for with I'll strong, sure a add. providing on make delivering consumers partners We our in

Karsten Voermann

in don't with But and be see our rate. onetime of is see reality you think a our XQ, we shifting see Yes. you this saw No, sort I meaning impact we to that describing us the the The as step as grocer. associated beyond Obviously, the well. trajectory, and TAM in down huge. XQ growth continues

even the growth retailers during period all we're high. volume shifts As on seeing the We've Trevor at said, average. other where in seen XQ demand is

that think are that and going consumers that to the into their well. perspective, highly as care we as helping as continue health in we're the numbers market that use confident huge from well serving we're I going the So remain future to GoodRx providers

Operator

this no the At closing further Bezdek time, questions. back over showing to I'm turn call you. remarks. Thank would like I Trevor to for

Trevor Bezdek

to expected performance While and that sure We've at case growth our aggressively start historically able margin, the to the is we that. to been a we want change continues future. of of not and make combination what working deliver XXXX, to year-to-date we're be the strong in

working reprioritizing to quarters mutual necessary, you to deliver our are to and our that and the spend both joining in thank look evaluating where drive success. continue across unlock and we I for and business to innovative collaboratively opportunities our with pursue on on will ahead, ecosystem you mission stakeholders the addition In progress forward updating today. growth us

Operator

you for This concludes call. participate…. conference Thank today's

GoodRx (GDRX) 8 Aug 222022 Q2 Earnings call transcript