GoodRx(US:GDRX)2024-02-29 16:26Financial Data and Key Metrics Changes - In Q4 2023, adjusted revenue increased by 7% year-over-year to $196.6 million, primarily driven by organic growth in prescription transactions revenue [34][67] - Adjusted EBITDA margin improved by 220 basis points year-over-year to approximately 29.1%, with adjusted EBITDA growing 15% year-over-year to $57.3 million [34][23] - Net loss for Q4 2023 was $25.9 million, compared to a net loss of $2.0 million in Q4 2022 [23] Business Line Data and Key Metrics Changes - Subscription revenue declined by 6% to $23.1 million due to the wind down of Kroger Savings Club, with Gold subscription count increasing both quarter-over-quarter and year-over-year [22] - Prescription transactions revenue grew by 11% year-over-year to $143.9 million, an acceleration from Q3 growth [45] - Pharma Manufacturer Solutions revenue declined by 2% year-over-year to $24.4 million, impacted by the restructuring and shutdown of vitaCare [46] Market Data and Key Metrics Changes - Over 25 million consumers used GoodRx in 2023, achieving approximately $15 billion in prescription savings [9] - The company estimates that over 75% of GoodRx users have some form of insurance coverage, indicating a significant market for price comparison against co-pays [15] Company Strategy and Development Direction - The company is focused on strengthening retail pharmacy relationships and enhancing its hybrid model, which includes both direct contracting and PBM partnerships [36] - GoodRx plans to continue investing in advertising and promotion, with over $200 million spent in 2023 to increase user numbers and drive prescription volume [14] - The company anticipates adjusted revenue of about $800 million for 2024, representing a growth rate of approximately 5% [71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, citing increasing patient out-of-pocket costs and the essential role of GoodRx in the healthcare system [32][33] - The company expects continued revenue growth in Q1 2024, with adjusted revenue guidance of $195 million to $198 million [48] - Management acknowledged the impact of recent outages disclosed by UnitedHealth Group but indicated that the effect on financials was likely minimal [48][94] Other Important Information - The company ended Q4 2023 with $672.3 million in cash and cash equivalents and $661.8 million of outstanding debt [47] - A new stock repurchase program was approved to repurchase up to $450 million worth of Class A common stock [70] Q&A Session All Questions and Answers Question: What does GoodRx look like in 5-10 years? - Management indicated that the future model will likely remain a combination of PBM network relationships and direct retail partnerships, evolving but not drastically changing [76] Question: Can you elaborate on the ISP opportunity? - Management noted that while there is a significant opportunity with PBM partners, the rollout is still in early stages, and they are focused on expanding lives covered [56][80] Question: How does the ISP margin compare to traditional business? - Management stated that over time, ISP margins are expected to be similar to the rest of the business, with demand captured differently [59] Question: What is the impact of recent system outages? - Management explained that their tech teams effectively created alternatives to minimize the impact of outages, which were brief and did not significantly affect financials [94][116] Question: Are any direct contracting agreements exclusive? - Management clarified that direct contracting agreements are not exclusive, and GoodRx remains the leading company in the cash discount card space [132]