GoodRx(GDRX) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Condensed Consolidated Financial Statements (Unaudited) The company's unaudited financial statements for Q1 2024 show key balance sheet, operations, equity, and cash flow data Condensed Consolidated Balance Sheets Total assets decreased to $1.45 billion while stockholders' equity declined to $631.1 million due to stock repurchases | (in thousands) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $533,295 | $672,296 | | Total current assets | $732,799 | $872,790 | | Total assets | $1,453,963 | $1,588,800 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $116,521 | $122,559 | | Total liabilities | $822,894 | $826,842 | | Total stockholders' equity | $631,069 | $761,958 | Condensed Consolidated Statements of Operations Q1 2024 revenue grew to $197.9 million, but operating income fell to $7.4 million, with an improved net loss of $1.0 million | (in thousands, except per share amounts) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Revenue | $197,880 | $183,986 | | Total costs and operating expenses | $190,499 | $172,683 | | Operating income | $7,381 | $11,303 | | Net loss | $(1,009) | $(3,290) | | Loss per share: Basic and diluted | $(0.00) | $(0.01) | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity decreased by $130.9 million to $631.1 million, primarily due to $154.8 million in stock repurchases - The company repurchased 21.3 million shares of Class A common stock for $154.8 million during the three months ended March 31, 2024[21][71] - Of the total repurchases, 20.9 million shares were bought back from related parties (Spectrum and Francisco Partners) for an aggregate consideration of $151.4 million[22][70] Condensed Consolidated Statements of Cash Flows Operating cash flow increased to $42.6 million, but significant financing outflows led to a $139.0 million net decrease in cash | (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $42,586 | $32,288 | | Net cash used in investing activities | $(20,615) | $(14,288) | | Net cash used in financing activities | $(160,972) | $(14,090) | | Net change in cash and cash equivalents | $(139,001) | $3,910 | Notes to Condensed Consolidated Financial Statements Notes highlight customer concentration, a $27.5 million legal accrual, a new stock repurchase program, and revenue stream performance - For Q1 2024, one customer accounted for 12% of revenue; for Q1 2023, two customers accounted for 13% and 11% of revenue, respectively[40] - The company increased its accrued legal settlement to $27.5 million as of March 31, 2024, related to ongoing class action lawsuits concerning consumer privacy[47][63] - In February 2024, the Board approved a new stock repurchase program authorizing up to $450.0 million of Class A common stock, with $295.2 million remaining available as of March 31, 2024[68] | (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Prescription transactions revenue | $145,395 | $134,907 | | Subscription revenue | $22,601 | $24,143 | | Pharma manufacturer solutions revenue | $24,509 | $20,435 | | Other revenue | $5,375 | $4,501 | | Total revenue | $197,880 | $183,986 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses an 8% revenue increase, improved net loss, growth in Adjusted EBITDA, and key operational metrics for Q1 2024 Key Financial and Operating Metrics Monthly Active Consumers grew to 6.7 million while subscription plans declined; Adjusted EBITDA increased to $62.8 million | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Monthly Active Consumers (millions) | 6.7 | 6.1 | | Subscription plans (thousands) | 778 | 1,007 | | Non-GAAP Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Adjusted EBITDA | $62.8 million | $53.2 million | | Adjusted EBITDA Margin | 31.7% | 28.9% | Results of Operations Revenue grew 8% driven by prescription and pharma solutions, while operating expenses rose due to a legal settlement accrual - Prescription transactions revenue grew 8% YoY, driven by a 10% increase in Monthly Active Consumers[99][100] - Pharma manufacturer solutions revenue increased 20% YoY due to organic growth and expanded market penetration[102] - Subscription revenue decreased 6% YoY, primarily due to the anticipated sunset of the Kroger Savings program[101] - General and administrative expenses increased by $11.5 million (39%), mainly due to a $13.0 million estimated legal settlement loss recognized in the quarter[106] Liquidity and Capital Resources The company maintains strong liquidity with $533.3 million in cash, despite significant cash use for stock repurchases - The company's principal sources of liquidity as of March 31, 2024, were $533.3 million in cash and cash equivalents and $91.7 million available under its revolving credit facility[112] - Net cash used in financing activities increased by $146.9 million year-over-year, primarily driven by a $143.7 million increase in payments for stock repurchases[120] Quantitative and Qualitative Disclosures About Market Risk Market risk exposures remain materially unchanged from the 2023 Annual Report on Form 10-K - There have been no material changes in the company's market risk since the disclosure in the 2023 10-K[123] Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls in Q1 2024 - Management concluded that as of March 31, 2024, the company's disclosure controls and procedures were effective[124] - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[125] PART II. OTHER INFORMATION Legal Proceedings The company details a $28.0 million accrual for privacy lawsuits and a new securities class action lawsuit filed in April 2024 - The company accrued an estimated probable loss of $28.0 million as of March 31, 2024, for ongoing consumer privacy class action lawsuits[63] - A new class action lawsuit was filed on April 22, 2024, alleging violations of the Exchange Act related to the company's disclosures about a "grocer issue" that occurred in 2022[64] Risk Factors Risk factors remain materially unchanged from those disclosed in the 2023 Annual Report on Form 10-K - There have been no material changes to the risk factors previously disclosed in the 2023 10-K[128] Unregistered Sales of Equity Securities and Use of Proceeds The company details its Q1 2024 stock repurchases of $154.8 million and the remaining use of IPO proceeds - As of March 31, 2024, an estimated $460.5 million of net proceeds from the IPO remained, which have been invested in investment-grade, interest-bearing instruments[131] | Period | Total Number of Shares Repurchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet Be Repurchased (in thousands) | | :--- | :--- | :--- | :--- | | March 1 - 31, 2024 | 21,329,492 | $7.26 | $295,185 | Defaults Upon Senior Securities No defaults upon senior securities were reported during the period - None[134] Mine Safety Disclosures This section is not applicable to the company's operations - Not applicable[135] Other Information No directors or officers adopted or terminated Rule 10b5-1 trading plans during the first quarter of 2024 - During the three months ended March 31, 2024, none of the company's directors or officers adopted or terminated any contract, instruction or written plan for the purchase or sale of securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c)[136] Exhibits This section lists all exhibits filed with the Form 10-Q, including agreements and certifications