GDRX - Earnings call transcript Q1 2024

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the GoodRx First Quarter 2024 Earnings Call. At this time a reminder today's conference is being recorded. I will now like to introduce your host for today's call; Whitney Notaro, Vice President of Investor Relations. Ms. Notaro, you may begin.

Whitney Notaro

Operator. you, Thank and the everyone, GoodRx's conference earnings Good quarter welcome of for first XXXX. call morning, to

Joining me today Officer are Scott Wagner, our Voermann, Chief and Interim our Financial Officer. Karsten Chief Executive

represent in statements that I'd considered objectives, financial direct to statements. begin, forward-looking of expected statements program. without priorities limitation this to capital savings not our programs on club, that regarding the other made on Factor will fact promises certain business, anticipated trends results, ended Solutions including certain matters cost our from performance, by XX-K the or deprioritization estimates cause year and as non implied filings of other we with our we for and opportunity, Before or of guarantees, the of of All partnerships obligation achievements savings call, achievements remind including and share future be everyone offering savings expressed statements historical unknown contain referencing important are GAAP forward-looking of differ approach, amount, under benefits strategies, to this like to forward-looking and made if growth, report discussed our of XX, call. the date initiatives, cause third today's of performance forward-looking forward-looking and do Any cause any those and of the and Exchange neither relate Form our management's Commission Pharma call statements proposition, remark. actual statements, outage, and actual these change.In allocation the nor Change statements and goals results call value XXXX with and to our December section or anticipated statements.Factors should to the addition, performance market results, our disclaim statements, in this our underlying solutions in but our for our annual update will this by on our Securities BM of Risk management's impacts our views Manufacturing even we our parties, different the factors. indicated uncertainties plans, potential may retail any risks, hybrid Healthcare known sunsetting involve such the program, contracting the and be events could our collaborations These impact factors integrated anticipated materially impacts These materially subsequent from timing metrics repurchase be

each the remind to at there Scott. Investor available nearest metric reconciled GAAP our turn well. release, the metric everyone replay overview I'll on become of this it a over Relations that the call non to GAAP press will page of in investors.goodrx.com.I'd as With also which website have be We that, company's shortly can earnings found like to

Scott Wagner

will Investor for Wednesday, many Day, saying and that quarter and the Relations listening things. of which be this Investor of the like focused those Karsten open Whitney, take taking to hope you via XX. keeping our Because our aware, full that join to our use first and last is will that for which us will our everyone you today headway I'd joining meaningful during year call. May be we our prepared discuss website.We'd as to today next are us remarks opportunity thanks QX more we've over announced webcasted discuss We you to several event, likely XX Thanks, first like quarter. highlight financials to results. the made months QX and in XXXX. we'll Today specifically like through by I'd expectations to Then first place

prescription for which market First, persistent ours. the in affordability we and need specifically growing context solutions; operate, the including

value make GoodRx affordable destination the us prescription. of consumers the find healthcare that elements for professionals Second, preferred the to and proposition, power

to our company's establish were opportunity that team for to Fourth we growth Third, within transparency own, chain, the pharmacy while network of on incentivizing us details rebalancing, broader prospects; differentiated the solution joint this healthcare upsides expected our revenue set I there to an growth worked with continued core savings forward Manufacturer have goal offerings significant I these and increase integrated as our to and in our and we that proposition: further, of year growth a medium to views want our us Investor partners. expectations and financial to growth community.While including growth When I our the our leveraging plan out of those prescription PBM reignite durability time. additional ecosystem.At manufacture number what the to strength well that saving levers trajectory, a accomplishments a here term and We today. prescription our my to as GoodRx the earnings strengthening finally, retail our marketplace pharmacy look of the reinforce aggregate do outset, durability flow discussing during using extensions as for look I Day value opportunities efficiently that first growth. all of in clear of accelerate by existing program see and investor on the a I with my discuss questions healthcare through. that the to as moment arrived to and enable GoodRx's people segments, money economics in opportunity is trajectory in position on assets year both well priorities business Fifth, at aren't lay our BXB the but Solutions. take our with as give our as growth position as incentives, focused the model and And on the with ago, Pharma and forward value demand allows our about our base prescriptions, of

pharmacy the uptake strides accelerated Looking we've our and of back, I'm by retail model, hybrid and direct and our retail PBM contract. energized includes both the encouraged strengthened which relationships historical we've our made.First,

pharmacies create friction themselves. the grocers offer well complementary closely GoodRx revenue is manage savings is existing relationships largest value retailers other the up We true this PBM our consumers marketing Our some and for consumer for to significant for a retail smaller to help work as believe potential reducing direct approach is profitability. additional category while us and for retail with we and retailers platform pharmacies.Opening of as where and the pharmacies both and

our which were extending of contracts program the has core GoodRx in the eligible been U.S. programs sale.We're XXXX XX% of partners eligible automatically And and continued these PBM to QX of our In up they do direct our hone over integrated by insurance the in PBM and retail their sign for growth commercial through benefit During benefits. direct CVS or with XX% drugs aggregate driving includes with to efficiently XXXX, clients.Our commercial we to through made the PBMs cost discounts, Scripts, point Express members, new quickly direct a covered QX who demand seamlessly and market X% lives. were contracts. our of subset leader members of while payers our second expand programs a claims prescription pharmacies like prescriptions available Navitus QX, contracts of MedImpact our of our this at funded savings real by are partner, transaction priority the to lowering offering, plans. for or cover done Caremark, and prescription with for We've plans becoming ISP their currently only integrated approximately value over

that estimate negligible line So means to ISP key almost us. the filled is patients overlap product area ISPs prescriptions in SAM market remains opportunity focus expanding. We entirely in the those our a direct that for and with offering, which our of consumer have

this through seeing to continue and traction to to far to with creating forgoing is and both focus we've scale drugs Manufacturer we and to expect partners In to retailers over types a forward Solutions. prescription deals in on savings with go our that with tracking to off transactions bringing this and of gain So and instead We GoodRx continue Pharma programs the prioritize line brand lives quality deal market ramp sustainably. we standardized our in XXXX. one our been of quarter of first types ISP is transactions. offering complete. including is more Solutions look PBM already vitaCare program.Third, rationalization in we're continue. The expect which increasing Manufacturer working We've restructuring of exciting we year, program that time the We the expectations the margin XXXX, as will Pharma begun of to see

year Officer. Marketplace. as welcomed business ourselves and promoted team management made who now effectively.More our executive several we and addition President also execute Over Walsh, Officer last Commercial and great fantastic the are These back specifically, our strengthened to Slutsky including executives all Andrew speed our And execute of we've with as EVP with Dorothy performing Gemmell we've our a Chief Marketing the helping Mike Chief Prescription quality. high who's organized executives are

combination to year-over-year. expecting business, year-over-year team believe return was This and experiences believe year-over-year basis and expect operationally. We and We're first plus cash XX $XXX real top balance the we be enables QX million outlook QX flow-through XX.X%, continued us rate with million adjusted distinctive expertise, standpoint. to continue financially add to of in result growth to executing see margin our healthcare.During from $XXX months.Looking for We flow, I company.Karsten accelerated the over and more we EBITDA adjusted the of last compared our Our QX between EBITDA $XXX speak year momentum growth ahead, from to healthcare revenue and financial million. which gaining performance us detail. top value a elegant priorities consumer for QX adjusted the EBITDA XXX both is to on momentum growing to XX in to direct that nice XXXX. and create our XX our year internet up we full against growth a has adjusted X%, in the for and quarter, track will believe adjusted high line our revenue positive million points full we're puts a a revenue over and EBITDA growth of line with consumers anticipate to efforts Rule XXXX, incremental XX% of into to our and adjusted adjusted the up

However, and over I'll I are it that confident growth to priorities With creation. our contribute the ones to Karsten. value right to will shareholder say hand that, deliver

Karsten Voermann

growth revenue transactions Kroger financial I'll In in Thank that briefly 'XX adjusted more of on Manufacturer provided. together on Total of we our lines. On quarter which margin active on to EBITDA first adjusted February, increased grew call monthly is at provided QX for XQ year-over-year before the revenue we and in you, to exceeding primarily guidance. in X% this to speak the was contribute guidance we and which revenue our driven was and point than first first turning Change even guidance the in impact and discussed were the the quarter had a Scott. vitaCare during was the of our XXXX. beat, million, XQ revenue adjusted an first quarter, did The last time $XXX.X revenue restructured mid-single-digit I'll to Pharma including by note results end dollars range transactions to basis, year and provided. and quarter revenue of we've outage upper this approximately of a earnings in of XXXX X% contributed last revenue growth Solutions, a the of QX organic the QX. as revenue Savings also from our the stronger.Moving in in year-over-year program on guidance by revenue like-for-like couple Savings immaterial To increase as prescription the million included impact. here growth, 'XX XXXX of more Manufacturer the driven integrated subscription QX year's growth this days also call, primarily offerings are that earnings revenue from which offering, the At well sunsetting all consumers. call, Solutions. And we XX% fall $XXX.X we we quantify vitaCare compared any in the in our quarter is not impact to Prescription July incorporated savings that revenue, expansion a millions QX. in XXXX included as from of Club Kroger summary, Club

Club. had multiple While weeks, running up quickly, guidance of more the believe which having across call, were effects in plans, time impact, and provided. pharmacies quickly on our we also the be declined to is incorporated of outage Kroger XQ now Kroger back and first We outage, XXXX revenue the less the dollars, quantification for evaluate wind the persisted in full the to we we quarter the Change Club own million quarter-over-quarter. 'XX in of And revenue up benefit year and continuing were was QX X% including expected prior the were running millions likely earnings we the the the million low period. Savings year discussed offering others. due On to to industry in back down of broadly immaterial impacting effect was $XX.X Savings immaterial and flat almost refills.Subscriptions XXXX $X our essentially than the outage's Gold single-digit as

Club, increased GoodRx more Kroger Savings capital than [indiscernible] of EBITDA of wind by was the revenue.Pharma wind year-over-year and mentioned million XX.X% $XX.X growth line offset be was to revenue expand the to year-over-year our in Adjusted from Solutions by to driven Manufacturer growth EBITDA subscription given half on including cash up million, by improvement than up prior XXXX. to expect low of I are I We in the compared activities a for vitaCare we a single-digit the in Net the net total Savings reduction loss million of compared is the first and XX% restructuring we'll relative Manufacturer higher year Gold subscribers $XX.X fee basis for $XX.X income in the As dollar The run plans July the which unchanged, down the driven quarter the quarter-over-quarter continue impactful net in continued year-over-year think maximizing as was the quarter continued year-over-year. subscription and $XX.X provided will of compared growth for offering Club now $X.X moment market subscriptions Kroger to high-return vitaCare. million of operating million programs, from ago, million of adjusted and priorities [indiscernible] second down XXX our and shareholders. to continue we first much investments $XX.X penetration, XX% number XXXX.Adjusted Pharma allocation XXXX. primarily period.Our generated more loss our than the Solutions from $X.X was million increased focus in organic point-of-sale points million value and rate savings of to top net to

sheet in quarter strong, cash the remains equivalents on sheet of $XXX balance million ended Our and and we debt. and cash with $XXX outstanding balance the million

price During blended share a million the quarter, $X.XX of we executed on approximately $XXX approximately share of repurchases at basis. an average per

$XXX of untapped, facility the As of XXXX, repurchase had as $XXX except quarter representing had for our share Directors million letters million $XXX guidance. credit our capacity during approved XX, share March Board of unused XXXX.Our we is of million of by liquidity $XX unused XXXX, total of revolving authorized and turning credit under March program first of of capacity to XX, million.Now repurchase

and adjusted X% revenue is year-over-year growth. representing for approximately revenue million, Our QX outlook approximately $XXX

contributed together of July, we're Kroger XQ 'XX tempered XXXX second second XXXX. related was in because restructured third than which second Pharma be last we of to the of the revenue revenue on expect dollars adjusted XQ contribute sunsetting in the because results, onetime the identical in to millions the of vitaCare earlier to and Club, my relation approximately which growth quarter be to and revenue to adjustment 'XX's commentary the quarter revenue we Savings quarter they'll believe more we XXXX our and expect Solutions vitaCare Manufacturer fall in restructuring nonrecurring.Similarly in to quarter offering We mid-single-digit

Prescription come full growth to vitaCare, revenue expect in is of XXXX, which to to deprioritization revenue has dollar adjusted outage revenue line our rate and anticipated of guidance $XX Marketplace is almost at $XXX of portion anticipated be adjusted $XX impact full million by contributed impact Club. growth of related earlier.We $XX to adjusted full growth the year year revenue in in expect is million of impact this and as but as year the well we revenue the been increase million effect midpoint.Like not at For million Kroger be low as single-digit mentioned approximately adjusted line In million and adjusted XXXX the Also, revenue revenue year and XQ approximately expect between year million XXXX the ongoing full adjusted $XXX 'XX and to Change an its $XX to revenue $XXX contributing our to by aggregate, we XXXX, Savings our of sunset representing about XQ and tempered incentives with identical with million, this $XX million associated on anticipated expect all XXXX the X% revenue contra million. top reflected consumer year. million top the in $XXX full to continue 'XX, the to revenue basis I

reminder, our of Marketplace As up revenue. and Prescriptions is other transactions, subscriptions prescription made a

Manufacturer delivered Manufacturer large million during range implies $XX seen perspective, and Manufacturer the years.Based Manufacturer of rate in expect Marketplace XXXX been rate Prescription offering the the $XX in Pharma pharma the offerings $XXX EBITDA we're to This exceeds percentages scale million to the to trajectory growth and recently year-over-year Solutions for said, growth revenue.From few to $XXX given our Pharma margin of XXs low and market, in quarter-over-quarter broadly. and revenue most last has which some about ad anticipated in adjusted that contribute our QX. growth. Pharma revenue the Solutions in what potentially offering, XX% million Prescription last we've there be variability the each of growth and digital we to the for very relative in spend our few our quarters, confident our We seasonality in historically, Marketplace to adjusted margins XXXX on we've TAMs That Solutions and expect a guide anticipated Pharma Solutions a and our adjusted in business high more our low-teen million

again turn operator from XX% margin of for generally.With from our adjusted continued expectations over up over on expect expect a in low EBITDA flow-through EBITDA growth XX% achieve range the to in million full degree and We based year, of the the I'll adjusted $XXX the quarter our focus EBITDA to efficiency structure be of cost and XXXX adjusted and second now the to on high revenue for Q&A. that,

Operator

[Operator Michael Instructions] Leerink Our first question comes with from Cherny Partners.

Michael Cherny

Maybe Congrats a here. a can ask good quarter on on if question I just ISP.

you about working in had you're ramping opportunities And the so where the guidance far the about the for look that think terms see ISP As with, would effects, been with seen time PBMs over the think year, the of other you in have percent where the of percent do the volumes, contribution? how integrations can you've Any into color greatest of you great. goes rest be ramping this where about think additional we as the growth? you've of

Karsten Voermann

speaking Karsten it's here. Michael,

to question. I think parts there X are your

first and opportunity the think how major rest see the do of in both matters, With I of see opportunity we see we The respect we those was areas. the part where X to year. the

add incremental The major PBMs. continuing area first to

plan incremental The to from second area each add PBM. is sponsors

expansion. area is third formulary The

us, year. need approximately we in hit covering haven't of associated expected there trajectory and So inclusion their to formulary U.S. shrink year participate number are see rest would indeed the new course, for particular big final who because contribution the big example, example, we retailers a PBM and XX% in the around be ones to of effect are then PBMs and to expanding certain expansion adding ISPs. that ISP for traditionally, of, because completely positive at With though area year, creates through as Of have its ISP the is less lives. PBMs been elected sponsors have those medications. that even formulary really certain of points the in of And with progresses deductibles, for respect of already the folks off still the for

of noticing the vectors of members existing an growth PBMs now effect our going we're in that that that, because in that continuing are to business namely I is particular, is in XXXX probably PBM today. think be add base formulary described, already of I what to less in

historically or would saw, have pronounced this So about the that to for likely year. we talked I we've all last think pronounced and less not relative helpful. will expected year example, be what seasonality Hopefully, that that's at

Operator

Securities. And it's with Jailendra from Singh Truist

Jailendra Singh

First, a quick clarification around Healthcare. Change

impact my Street the is were being MAC then main make be ongoing. want risk MAC question per PTR millions. call and would quarter, digit higher MAC a low that expectations. there to You impact than in is below to that ahead, single in slightly But MAC just guys I PTR per at trends compared least sure, was

those Just Were for would the internal you around contracting direct the impact quarter? the your pharmacy? takes in color there any trends and PTR And about can curious, how trend describe think from there expectations? provide per us ISP you And compared metrics of or how year? to on should we MAC any puts

Scott Wagner

let I'll handle the second a PTR shouldn't longer Scott. On were the half, industry an QX, some through the go question. issue thing, persistent this it's around were really in MAC the going the quarter, it certain effects the but be industry I would think has won't with and are think did and to have but has Karsten own been persistent we big it cards general the and Thanks. file industry more be around but in retailers. we outage. rest a relative in But service it there the punchline was for centered obviously, Hi, of than lasted as with obviously that everybody. our back that's meaningful Change year, system so amounts is, else the that your There We throughout time and anybody -- the things into on on both last got up, QX. of then Change, thought

Karsten Voermann

see some QX up you in small has little think MAC was But XQ on example, for that some a did a little linear it we year-over-year amount, the Jailendra, per on single-digit by quarters. MAC, PTR over past similar some. up Hi few think saw, relatively in in gone a I It's a down per in basis. PTR degradation I been

point driver there's on MAC related to ISP think things a or for I the continued been that. contracting now those narrow to have PTR necessarily in of no to range. Both very within has direct specific it several that as per quarters fluctuate effect

Operator

the with And of Barclays. it's from Stephanie Davis line

Stephanie Davis

midterm at quarter to you would in there growth and get quarter something that mentioned to a I do of headwinds this year-to-date, trend? think the You rate. low is to this math talking reason those targets longer-term the double-digit higher your upcoming the than Analyst there Day. the you've make out year And in scrub and Is or that some had unique if I any that

Scott Wagner

of Stephanie, given that's detail I more a rate lay on range, to out kind seconds might conference and inherently minute going just with marketplace than dynamic think we're for the around call. a of a in quarter, XX says what bounce a in everybody a growth or

of us. So math means marketplace -- have just that what appreciate longer that over in lapping But business of the year-over-year zone can the goalpost do we'll or term, your the that just I variance can degree think could operate in. answer the a the some happen. that's be a the it you out, question, specifically lay and for where it but to But dynamics things

Operator

And with of it's Daniel Grosslight Citi. line from the

Daniel Grosslight

is And mentioned do through you your Do think with curious that can of the volume on you'll over think dynamic now you flowing kind or volume to ever think the the coming direct XX% contracts. through that where you of year contract? over you so? trends that next I might or how Scott, change PBMs? if majority get comment direct the maybe relationships I'm of

Scott Wagner

we're our the to retailers we're cases, most going think and And point chain of some some we going note in in the means all is or portion model. dynamic important we're go value And point this general. are journey. that our to a in And hybrid we're direct. frankly, as I following needs that cases, the work to through where going again, to that being be what it's have volume going being retail partners meeting of, the And is in both. following the

out the want so is throw be And for I where we're a long, something going value time. a to and don't this system because which goes, both following there's is chain in great, think, number as kind to I the again, long of it

of I we is a at long think a long, of it's about And the incremental for time your with to that's series do or for that integrated evolve partners. gap, together, of integrated next, a bridge business our and not and is savings, PBMs that over years, the the biggest a GoodRx on we're think commentary hand-in-hand being to with savings point plans, think PBM do a hope PBM but to the working to quarters PBMs, to but have the relative to couple question, going relationship had just in sort way all off just the reasons of adding I benefit, into closer going different one where new not insurance that business, is really inception the this which ISP is going of is which efforts we're evolution lives. that brought obviously it. that

Operator

from comes it with JPMorgan. the Lisa of And Gill line

Lisa Gill

moving secondly, as just can million reason And I if a just clarification. in answer quarter. means EBITDA to forward. the Just growth I in reimbursement. about was cost-plus than what -- different Is talked first large CBS thinking about in, then the like $X I'm the move year to than flow-through versus they retail the have And as retailers And then participating? Are if that a today that companies understand to as what squeeze question, there curious side. any that the in one of ISP, Street just talked anything, towards things the of the consensus rest And you the aren't higher your were that beat there was participation. few model, on about projecting internally? you talked first just from retail about you the want quarter. to when The

Karsten Voermann

mind. So top go to Lisa, I'm reverse in going order of thanks.

So as flow outcome are growth great. good is really flow-through it's beat things the it an actually EBITDA and happening. and of through, return I to mean,

So EBITDA grade.

insurance In again, retail is itself terms change for know, of the for a cost to relative different plus to plus pharmacy a value need the way relative as at well situation, pricing cost all. PBMs, people's but of the you doesn't

it, of not a different and and if tell on gaps value gosh, a depending actually prop, there's GoodRx on you're at in that can this which tease bit, going cost-plus way to in go benefit and And GoodRx in there I'm a not own show where price might GoodRx that of Day cost-plus models our Investor or and enhanced and really operating relative even that exists it fundamental traditional be world, several to applies looking points little in. today, the you add retailers. upon retailers our the able both. to drugs of so value but across just the is about best set to is and are there's drugs nobody to difference, a value are being several how across talk There's to the are world, insurance still

with than the I -- with answer several week that's is So does into it funded our you are do necessarily dynamics particular, in of retail with an The through acceptance, next everybody. We'll we as and cost-plus PBM retailers working are think ISP. to that working partners, But contracts dive more have retail. that couple thing. their On which ISP, a that's a through Yes. might expect, of more

the who retailers the there's So book. fund do nothing to more different the balance has of in It relative of about program with are or to to not. fundamentally

Operator

And with Charles line Rhyee Cowen. it of is TD from the

Charles Rhyee

little ask I more. to bit a wanted

the you some sort I PBMs what you big for how think you talked about you And for types talk then what sense today. there? if in to as them, ISP the a in the areas have to growth, clarify process right, I is used it, formulary EBITDA, formal an of when little I the generics. more testing particularly year? for on that decisions just formularies are read maybe various through are process $XXX made? among the particularly you on percentage bit are being million, of Or Is greater of than of that. did with that. just get $XXX those a the clarification, estimation think it? hear it And is transactions, trying you they there all of the for just expect Just a guidance And million Can is about

Scott Wagner

flowing lives an end people on actually And what price together, ramping then we're mark is to through me your I the I'm PBMs. with understanding question and a say of my actually a would how of it process we're hopefully, working with let mutual of that rollout. of is means I our -- data. in Charles, the hit And very point on this the a is or much theirs, doing people through the at this. incremental and but couple looking with some answer effort it's couple that

on communicate I think again, to one, following that in PBM tried a to our matter lead people. the are we And of partner. this we've

it I'll is if a all And working incremental to these. has, the and EBITDA address it of question. about the we're step-by-step as punchline on I it together you approach let might an Karsten in So think think

Karsten Voermann

easy an one, that's Charles. Yes,

did EBITDA, Y-o-Y. EBITDA expected the of than side, so On over we approximately XX% greater million achieve adjusted yes, we to say $XXX

Operator

the Stan And Berenshteyn it's of with Wells from Fargo Securities. line

Stanislav Berenshteyn

bit had what drove as of terms related Solutions, you're the stronger a type here, than seems seeing the Maybe of Manufacturing guided on within call on just give pipeline this, Pharma have was And what some called focus. like out Anything an you of you expectations area you then the It to in out this for. can segment? upside updates that? traction to us sales perhaps to QX

Scott Wagner

That's on this whole I great. forward week. Yes. detail to And going area next into look more

these we runs there's better, at at good In views distinctive I which And differently solutions assistance last the works a the cases, get co-pay the organic programs on the we we're the results at they with you're and in to these talking many right? page that every think seeing workflow into whole really to parlance, of all embed in of when brand GoodRx, that in hone you system and than does. access patient natural that's what of about were brand is all land, is X what at pharma we're year, efforts that act end partners. XXx brand and brand going the

access, our about if affordability you pretty year-over-year. To a connecting us things, this we think And there's boy, that's bear honing is. real really affordability was starting so And it's selling was cycle. through fruit. QX GoodRx. year it last by their when being with on Obviously, effort destination to the for discussions those XX% is the much what for talk brand, up and value programs the numbers, about marketers each think And

a to lot are I add scalable, growth rates trajectory value brand had to and the real in been companies over is going But would around conversations a not I've this last our of there's only bounce teams, There's with going pharma here. value the continue. real because bit. that's we hope that we quarter, but believe little So these I

Operator

from of And KeyBanc. it's the Schoenhaus with line Scott

Scott Schoenhaus

to So want They almost about at here really XX%. I margins. gross talk accelerated

we haven't savings man issue more release the And impact expect of man the years pharma business? cost press sol. in sol We called forward? Should you room going since of seen is the on grocer out squeeze any gross there the more out these restructuring that ago. pharma to X kind margins out the And of

Karsten Voermann

that. pharma this connects X last tie points directly on on sol Scott's because I'm make to going going to man on it to to point I'm point.

a which think of out was that vitaCare, Scott at this included on year. XX%. whatever talking revenue And I restructured in basis, quarter man not remember needs that's to we last from year's rate growth So is about pharma like-for-like sol sort the

growth a So forward-looking on on be that, higher. rate you like-for-like, anything, if a see basis a bit might

I'd connection is vitaCare point margin, it too cost gone. because now as That Second away revenue gross well. in that went with the went ties to that with restructuring make in of is away, respect

a one as basis, rest revenue on gross of cost the undertake onetime, we a just felt the like-for-like Scott, gone a So revenue in of again, it increase of elected like I but perpetual, costs because margin the restructuring reasons to that's the be not is drops. would also team and gone. And

Scott Schoenhaus

the structurally Is should year? that continue expect to something we throughout that of rest the

Karsten Voermann

revenue Absolutely, yes. offering answer. generating is the of that cost Is short gone. Like

the then. answer absolutely yes So is

Scott Wagner

I'll just on And that pile question in Karsten's comments.

of to trajectory to I help the ability margin this to which growth flow-through this show numbers rate to are relative both up point. seeing financially, to think you it's be nice brands value growth that GoodRx and starting and profitable accrete is in now, the the at

Operator

it's Partners. And of the Jack line from Guggenheim Wallace with

Mitchell Ostrovsky

on is This Mitchell Jack. for

So back bought repurchase million authorization you over and of remaining. $XXX shares XX million have

the how opportunistically understand you're And at deployment year? to the capital trying about of rest shares anything is considering? of there is And list? the for Just still the repurchasing thinking else top you're

Karsten Voermann

this Karsten. is I'll This Sure. take one.

about right cheap. share focused the We're on advantage taking stock is totally You're the view repurchases. situations where of we very

that's a we've historically. So for done basis what

this M&A all. and that I forward, else not the contemplating your would tell you Going reduce on our can capital flow I'm doing of ability produce behalf be investors any team and to on at that investments to might I question at take point side cash are And going Scott, to as contemplating the any we capital. material deploy not what

repay your on think are do we'll forward-looking we the something very to is -- refinancing. that interest And the a see basis, we elements the continue continue debt. continue in stock is have to about evaluate And there. those of exist rates have the I to in context carefully if increased, So that element potentially that opportunities as point, other X to cheap, to we

Operator

line Dodge Capital RBC of with it's And the from Markets. Sean

Sean Dodge

make sponsors to to or it around expanding ISP, drugs PBMs more expanding can those new the your plan included to those kind increments. Or being back ISP are covered year? beginning going of increments comes or around course the phased maybe rolled of to be under over years? that in the the comments in, are changes in Scott, a out When want things employers of or

Karsten Voermann

first, the answer. sort it It Sean. grab okay, to going of I'm short if both that's is

for I pronounced lives come have expected we than that year. in we see originally historically, reasons this to even the we'd commentary on, the of the my that one year. might significant point the benefits But that for other impacts exactly occur seasonality ISP anticipated of start at the continue of to less IP is and being during think see example, question related we

flatter, otherwise seasonality might that less was downward sloping that the So basis than for comment we is ISP. my on have expected

Operator

of line of Lutz Bank with the from Allen comes America. it And

Allen Lutz

up I follow for color to want thanks Karsten, the ISP last on all that question. opportunities. the on

-- response have And members, retailers could anything in adding in You mentioned come adding Has some you to since think different PBMs, relates course adding over a quarter. currently are come And what accepting that? update the retailers it retailers on -- large as then is that question, then of of are changed not to incremental that since last adding on been retailers. few a there? opportunities, is last in formulary, percent else there's And retailers the members XXXX. ISP, I February? the said that like there that any Is

Karsten Voermann

Thanks. Sure.

with the of performance modeling. our First is largely consistent of all, ISP

you a with including in coming line overall, our expectations aligned to the grateful in business team we with little more set FP&A on It's saw in So expectations. Hence, the or that. PTR. performing us

the us, I terms ability I I for inflection levers, of mention I too, is that win probably great transactions. think as didn't is and in quarter that expected earlier one might a have of ago think to much a area our not

So the the we [indiscernible] with associated ads win rate get.

up but better. we the of pharmacy, getting or to continue chain that it that respect goes pay that of pick your and conversion lower on we pharmacies, I'm benefit member might as As as member on. the the acceptance, smaller majority think to think much constituents perfectly in otherwise do to I you question work get what their in. them But all the of ends optimize back. to funded With are have pharmacy know, of big And a are way that of this benefit up ISP the about we to goes call a ISP, pretty winter and with the I pharmacies significant to mean value the I trying is rate plan. right, GoodRx cost tail a everyone a funded to all else knows works

Operator

line is Ransom And with from it the of RJ. John

John Ransom

question. bigger picture kind type of kind CFO one So and question one of

at So that it's just this declined should the first to deflation the every the looking That's legacy slope we PTR question. natural per since business. MAC, I expect Is forward, of assume? and in following generic XXXX -- your going continue year

big you've I kind was second guys do the but know in a the drive are Day week? just catalyst for surprised X happy next is, as the to X Analyst is -- there certainly, for Analyst lead and Day. maybe teasing an The of I better are or little I is transition, was home trying out, story doing story been wanting the question points think you're themes elimination. guess, highlight and to some that you could And this this what I

Scott Wagner

here's through with that that myself, serve, can hours we're Yes. to go have some together these everybody for outside are here's with visibility in lead consistent all the a the each asking now everybody into laying hey, goalposts value as the things. things was need continue speaking at opportunities those John, done. secondary that growth it in. high were it's that to with to they we areas out, year-end, a we to selfishly We're levers the think We on, that working and to on logic ready we're doing that for ourselves Scott. getting confidence work going haven't internally. do hey, set communicate financial And of Well, and some and I sol the marketplace that we but and X goalposts of doing, is out spend man everybody detail for prop, the we little between lay financial

people able ready. focused nice, questions. able that. worth on actually that business to and we're And a so point that is to half answer and to point the is do a And do And to be it's nice nice the of it's day's time it's with ready

Karsten Voermann

it of of year. And to PTR that are expect be a concepts any don't I largely important. there are question, think We MAC I pretty expect the sort with the couple nonlinearity respect and per for to flat

around probably see X, meaning the percentages flat slope fluctuate You'll down.

couple percent. time, this was So a it down

could have in be use not slightly well consumer actively well a take our incentives we X thing increased out to Next manage I It's point things. we that order of drive action. it One will But to. quarter metric to up. is very consumers

film contra in their are few For chronic fill them is if for the revenue. on the in number look fold. like incent coupons a contra see they x a discount can first be with example, we That into times back CPG example, or, and trading, we script to then them revenue fill might brands, same bring sense the a for them that

So PTR divided you double-digit millions to by when sort therefore, see low reduces per year and with MAX revenue of, that's a up MAC. this contra call that drag it, respect reduces increased revenue

marketing is shifting of and the out more. a of sort just spending reality of into matter incentives It's arena. the think I we're consumer not

our is nice back of when XX%-ish we of quite like our you're horizon thinking the one time a I retail constituted that of also significant second business, I'm partners the the PTR here, when Kroger time made look about, of XX%-ish, volume. horizon margin. talking over you where that's amount point think

helpful. latter the It's think is now that flowed impactful. so other when just created materially fully that that that's that's the But was And the through, contra that I factor Hopefully, right? a headwind. rev one

Scott Wagner

next it's that investors to a of been from the and market, just what I recognize feedback here's which clear do time to we've and understanding long follow, with commentary acknowledge pacing going very want investors it people wanted week next the we're for or externally, of but plug I company, on. away a with well to come are on us here's has of working one from week. the one company, this, had last -- here's harder

it understanding trajectory of but translates to come judge away you'll Wednesday. how sort transparency and out coming Here's that next of everybody into be will to with what how is, able financials. And

Operator

Stanley. of line the from comes Morgan it John Park with And

John Park

in line would from acceleration mentioned will expansion? or with leverage on provide you that? I there any Craig. love color would Besides going -- that for of initiatives margin help margins, behalf away cost productivity here that top I'm operating on on any vitaCare drive would growth think any but are the gross model,

Scott Wagner

the for it's flow-through of great just is I -- is seeing it's vitaCare resources think great. great specific you're very -- growth, a And the you're something that really wasn't jump too. is seeing line the use of you top going itself, which on the action But what business great the this restructuring for investors. in model power as is and and Scott. a return Karsten was just is to

if you that in growth. we're it I continue it. return as growth, that ways, to getting will will about some but our flow with things just say to hard. you're isn't Now we think certainly And And through, to lean drive into naturally prudent looking we're resources,

we'll we the So everybody hasn't And surging, next that, growth are up those or the areas it's say nice gas guess listening things come will the we're we marketing that But week flows whether on is that marketing can can we that topic are finding and there call and what do doing still revenue the do engineering in certain through. in doing things the for thing effort push talk of call. I about the out. and we'll where

Karsten Voermann

attributes incremental us respect week, incremental a flow-through, goes up John just basis, to. technology look Ransom's talked as right? you contra marketing and expect product to deployed maintenance that particularly to from even example, development multi-quarter to really back the in we, we platform next look over a we quarters more too, mode to efficiency. few shift that Yes. the margin for technology about continue multiyear growth-oriented rate being on the over that capitalization on areas part sort as are dynamics question, there would to on new and business for against So certain of and that building talk that are alluded we'll longitudinal adjusting some as allow accrete you to go forward about see shown And Scot that in your see question, of I the you terms where the folks I quant efficiencies of think there perspective, the past Like, with if revenue

Operator

of from last And Deutsche moment line it Bank. Hill our question, One the please. comes with for George

George Hill

I period. from for the in guess ones. margin X Karsten, direct impact scripts quick perspective One, going year-ago are the unpack X% from you of is, gross a of through retail XX% us, able to

lot do and that the then D supply wonks are of looking And lot a of a think the Scott, lot impact to a I us gross here. chain think program seeing are of to that? next wondering just drug are was not us could kind margin I direct Part next guys exposure you disruption trying at of business indirect a exposure lot I that a year. the kind of would of but be kind have and quantify thinking you're of you're how if may I supposed of your know impact lot to year.

Karsten Voermann

question. heard the first the I Sure. of part

would indirect you second repeating part, that The mind George? for us, one

George Hill

I Part to beneficiaries dancing lot to have that are supposed to exposure lot or a the of lot expecting of card around a there's D. So I up probably or of aren't us imagine -- a deductible either year. ton like direct But of who what those in parts are year. a guys disruption their of you D but next know Part you probably next while avoid could wind using GoodRx co-pays people have you,

market. how thinking about wondering in are what you happens Just guys that

Karsten Voermann

Sure.

To we be us this impactful we potential haven't changes, the think anticipate to we and material the is to So of here. and in interest all we the to view any question, D I found and reality at Part continue I'll the time, that that analyze as of that us. quick try point as

years. that time that our view, looking couple, reference don't it, impacts dimension, a and certainly, periods So periods think I over call at, so the coming, on it forward-looking we're X

next So year. just not

volume time, that a but to our has on over downward on is aspects higher MAC. that effect number ] of direct that really respect to the mentioned, a like [ primarily we material Kroger talked a of contracting. decreased. which again really some contra-revenue couponing about John contracting that two, a The the There slope us for driven to shifting was dimension little hasn't think had I margins downward Kroger So of one. consumer that slope the retailers on other marketing little slight been add. nothing volume, number PTR direct by isn't direct slam slope I or incentives With fact the downward margins, the per margin with any contracting and to kind negative than And sort from that

that from us. contracting think I to neutral So effectively perspective, direct view as we materially

it perspective, them merchandise like more. So incremental good help thing cetera. because And we're retailers volume, happy from drive et our to

dollars the of For dollars us EBITDA and margin, us, helps about that's gross the contracting exactly and it's what drive. of all direct

Operator

And this concludes the Scott Wagner it Q&A to will back final pass I for comments. session.

Scott Wagner

Thanks Thanks And most all. week. we a forward people next bunch. spending Appreciate importantly, look time to it. with

color think importantly, for think certainly we're what investors forward we and level productive years. more some the out on at a can think go what most context lay that and segment real it just that that on for you at about and working level can be goal the for the I posts business several next overall the will can -- super how on are, they things to with on an call,

forward it. everybody. Thanks, we're looking So to

Operator

And who thank you participated. all

disconnect. now You may Good day, everyone.

GoodRx (GDRX) 9 May 242024 Q1 Earnings call transcript