GoodRx(GDRX) - 2024 Q2 - Quarterly Results

markdown [Second Quarter 2024 Highlights](index=1&type=section&id=Second%20Quarter%202024%20Highlights) GoodRx reported solid Q2 2024 results with revenue of $200.6 million and an Adjusted EBITDA of $65.4 million, representing a 32.6% margin Q2 2024 Key Financial Metrics | Metric | Value | Margin | | :--- | :--- | :--- | | Revenue & Adjusted Revenue | $200.6 million | - | | Net Income | $6.7 million | 3.3% | | Adjusted Net Income | $32.4 million | 16.1% | | Adjusted EBITDA | $65.4 million | 32.6% | | Net cash provided by operating activities | $9.7 million | - | - The company exited the quarter with over **7 million** consumers of its prescription-related offerings, which includes Monthly Active Consumers and subscription plan members[1](index=1&type=chunk) - Management emphasized progress in strengthening relationships with retail and PBM partners and scaling offerings for brand medications[1](index=1&type=chunk) [Second Quarter 2024 Financial Overview](index=1&type=section&id=Second%20Quarter%202024%20Financial%20Overview) Total revenue for Q2 2024 increased 6% year-over-year to $200.6 million, driven primarily by a 7% rise in prescription transactions revenue, partially offset by an 8% decline in subscription revenue [Revenue Breakdown](index=1&type=section&id=Revenue%20Breakdown) Prescription transactions revenue grew 7% to $146.7 million, fueled by an 8% increase in Monthly Active Consumers, while subscription revenue fell 8% to $22.0 million due to the sunsetting of the Kroger Savings Club partnership Q2 2024 Revenue by Segment (YoY) | Revenue Segment | Q2 2024 | Q2 2023 | YoY Change | Key Driver | | :--- | :--- | :--- | :--- | :--- | | Prescription Transactions | $146.7M | $136.5M | +7% | 8% increase in Monthly Active Consumers. | | Subscription | $22.0M | $23.9M | -8% | Decrease in plans due to sunset of Kroger Savings Club. | | Pharma Manufacturer Solutions | $26.5M | $24.3M | +9% | Organic growth and expanded market penetration. | | Other Revenue | $5.4M | $4.9M | +10% | N/A | [Profitability and Margins](index=1&type=section&id=Profitability%20and%20Margins) Net income dropped significantly to $6.7 million from $58.8 million in the prior-year quarter, primarily due to a one-time income tax benefit in Q2 2023, though Adjusted EBITDA increased to $65.4 million with an improved margin of 32.6% Q2 2024 Profitability Metrics (YoY) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net Income | $6.7M | $58.8M | | Net Income Margin | 3.3% | 31.0% | | Adjusted Net Income | $32.4M | $28.4M | | Adjusted EBITDA | $65.4M | $53.5M | | Adjusted EBITDA Margin | 32.6% | 28.2% | - The substantial decrease in net income was primarily due to a **$46.7 million** income tax benefit in the prior year related to the release of a valuation allowance on deferred tax assets[4](index=4&type=chunk) [Cash Flow and Capital Allocation](index=2&type=section&id=Cash%20Flow%20and%20Capital%20Allocation) Net cash from operating activities was $9.7 million in Q2 2024, a decrease from the prior year, with the company ending the quarter with $524.9 million in cash and recently refinancing its debt - Net cash provided by operating activities was **$9.7 million**, down from **$29.9 million** YoY, largely due to changes in operating assets and liabilities[5](index=5&type=chunk) - As of June 30, 2024, the company held **$524.9 million** in cash and cash equivalents and had **$656.5 million** in total outstanding debt[5](index=5&type=chunk) - In July 2024, the company refinanced its debt by establishing a new **$500.0 million** term loan and extending the maturity of its revolving credit facility[6](index=6&type=chunk) - Capital allocation priorities are: investing for profitable growth, paying down debt, buying back shares, and strategic M&A[7](index=7&type=chunk) [Business Outlook (Guidance)](index=2&type=section&id=Guidance) For Q3 2024, GoodRx projects Revenue and Adjusted Revenue between $193 million and $197 million, with a full-year Adjusted EBITDA expected to be over $255 million Q3 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue & Adjusted Revenue | $193M - $197M | | Adjusted EBITDA Margin | ~32% | Full Year 2024 Guidance | Metric | Guidance | | :--- | :--- | | Revenue & Adjusted Revenue | Lower end of $800M - $810M range | | Adjusted EBITDA | >$255M (~17% YoY growth) | - The full-year guidance includes an anticipated negative impact of approximately **$5 million** from Rite Aid's store closures[8](index=8&type=chunk) [Key Operating Metrics](index=5&type=section&id=Key%20Operating%20Metrics) Monthly Active Consumers (MACs) stood at 6.6 million for Q2 2024, while subscription plans continued to decline to 696,000 due to the sunsetting of the Kroger Savings Club Key Operating Metrics Trend | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Monthly Active Consumers (in millions) | 6.6 | 6.7 | 6.1 | | Subscription plans (in thousands) | 696 | 778 | 969 | - The decline in subscription plans is attributed to the sunset of the Kroger Savings Club program, which officially ended in July 2024[17](index=17&type=chunk) - The company defines Monthly Active Consumers (MACs) as unique consumers using a GoodRx code for a prescription purchase in a given month, excluding subscribers and telehealth users[16](index=16&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements as of June 30, 2024, and for the three and six months then ended, providing a detailed view of the company's financial position and performance [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2024, GoodRx reported total assets of $1.48 billion, down from $1.59 billion at year-end 2023, primarily due to a decrease in cash and cash equivalents Balance Sheet Summary (in thousands) | Account | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $524,903 | $672,296 | | Total current assets | $750,555 | $872,790 | | Total assets | $1,475,390 | $1,588,800 | | Total current liabilities | $102,473 | $122,559 | | Total liabilities | $805,991 | $826,842 | | Total stockholders' equity | $669,399 | $761,958 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2024, GoodRx generated $200.6 million in revenue, resulting in a net income of $6.7 million, or $0.02 per diluted share, compared to $58.8 million in the prior year due to a tax benefit Q2 Statement of Operations Summary (in thousands, except per share data) | Account | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Revenue | $200,610 | $189,677 | | Total costs and operating expenses | $180,732 | $171,369 | | Operating income | $19,878 | $18,308 | | Net income | $6,694 | $58,786 | | Diluted Earnings Per Share | $0.02 | $0.14 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2024, net cash provided by operating activities was $52.3 million, with significant cash usage in investing and financing activities, resulting in a net decrease of $147.4 million in cash Six Months Ended June 30 Cash Flow Summary (in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $52,287 | $62,154 | | Net cash used in investing activities | ($37,844) | ($29,247) | | Net cash used in financing activities | ($161,836) | ($28,084) | | Net change in cash and cash equivalents | ($147,393) | $4,823 | [Non-GAAP Financial Measures and Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures) This section details the company's non-GAAP financial measures, including Adjusted Revenue, Adjusted EBITDA, and Adjusted Net Income, providing definitions and reconciliations to GAAP counterparts for a consistent view of operational performance [Reconciliation of Net Income to Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) For Q2 2024, GAAP Net Income of $6.7 million was reconciled to Adjusted EBITDA of $65.4 million, primarily by adding back depreciation, amortization, stock-based compensation, and interest expense Q2 Reconciliation: Net Income to Adjusted EBITDA (in thousands) | Line Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | **Net income** | **$6,694** | **$58,786** | | Interest expense | $14,566 | $14,054 | | Income tax expense (benefit) | $4,952 | ($46,718) | | Depreciation and amortization | $16,965 | $16,097 | | Stock-based compensation expense | $26,590 | $17,897 | | Other adjustments (net) | ($5,355) | ($6,650) | | **Adjusted EBITDA** | **$65,412** | **$53,466** | [Reconciliation of Net Income to Adjusted Net Income](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) Adjusted Net Income for Q2 2024 was $32.4 million, reconciled from a GAAP Net Income of $6.7 million by adding back stock-based compensation and acquisition-related intangible amortization, with a net tax effect adjustment Q2 Reconciliation: Net Income to Adjusted Net Income (in thousands) | Line Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | **Net income** | **$6,694** | **$58,786** | | Amortization of intangibles (acquisitions) | $2,100 | $5,599 | | Stock-based compensation expense | $26,590 | $17,897 | | Income tax effects and other adjustments | ($4,991) | ($55,059) | | Other adjustments (net) | $1,989 | $1,164 | | **Adjusted Net Income** | **$32,372** | **$28,387** | [Reconciliation of GAAP to Adjusted Costs and Expenses](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Adjusted%20Costs%20and%20Expenses) For Q2 2024, GAAP operating income of $19.9 million was adjusted to $50.5 million, representing a 25.2% margin on adjusted revenue, after accounting for stock-based compensation and acquisition-related intangible amortization Q2 Reconciliation: GAAP to Adjusted Operating Income (in thousands) | Line Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | **Operating income (GAAP)** | **$19,878** | **$18,308** | | Amortization of intangibles (acquisitions) | $2,100 | $5,599 | | Stock-based compensation expense | $26,590 | $17,897 | | Other adjustments (net) | $1,979 | $1,164 | | **Adjusted operating income** | **$50,547** | **$42,968** |