GoodRx Holdings, Inc. (NASDAQ:GDRX) Q1 2025 Earnings Call Transcript

GoodRx Holdings, Inc. (NASDAQ:GDRX) Q1 2025 Earnings Call Transcript May 8, 2025

Operator: Ladies and gentlemen, thank you for standing by and welcome to the GoodRx First Quarter 2025 Earnings Call. As a reminder, today’s conference is being recorded. I would now like to introduce your host for today’s call, Aubrey Reynolds, Director of Investor Relations. Mr. Reynolds, you may begin.

Aubrey Reynolds: Thank you, operator. Good morning everyone and welcome to GoodRx’s earnings conference call for the first quarter 2025. Joining me today are Wendy Barnes, our Chief Executive Officer; and Chris McGinnis, our Chief Financial Officer. Before we begin, I’d like to remind everyone that this call will contain forward-looking statements. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation, statements regarding management’s plans, strategies, goals and objectives, our market opportunity, our anticipated financial performance, underlying trends in our business and industry, including ongoing changes in the pharmacy ecosystem and the impact of our store closures and announced bankruptcy of one of our retail partners on our business, our value proposition, our long-term growth prospects, our retail, our direct and hybrid contracting approach, collaborations and partnerships with third parties, including our point-of-sale cash program and our integrated savings program, our e-commerce strategy and our Capital allocation priorities.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors. These factors, including the factors discussed in the Risk Factor section of our Annual Report on Form 10-K for the year ended December 31, 2024 and our other filings with the securities and Exchange Commission, could cause actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements made on this call. Any such forward-looking statements represents management’s estimates as of the date of this call and we disclaim any obligation to update these statements even if subsequent events cause our views to change. In addition, we will be referencing certain non-GAAP metrics in today’s remarks.

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

Wendy Barnes: Thank you, Aubrey, and thanks to everyone joining us today. I’ve now completed my first 100 days as CEO and I want to share progress we’ve seen in the business, how we’re strengthening our foundation and the opportunities ahead. Then Chris will take you through the highlights of our first quarter results and guidance. Since stepping into this role, I have dedicated my time strengthening our leadership team, gaining a deeper understanding of our business, meeting with key partners, understanding the macroeconomic environment and identifying key capabilities and growth opportunities. I can confidently say that we are in a very strong position to deliver meaningful value across the pharmacy ecosystem. Furthermore, we are focused on high impact initiatives that will drive our business forward in compelling ways.

I firmly believe that our success starts with having the right individuals in the right roles, knowledgeable leaders who bring vision, expertise and a commitment to our mission. I’ve made some important leadership changes to strengthen our business. In March, we appointed Aaron Crittenden as President of our RX Marketplace. Aaron previously played a pivotal role in building our Pharma Manufacturer Solutions business and has a track record of scaling partnerships. In this new role, Aaron will focus on expanding GoodRx’s presence at the pharmacy counter to streamline workflows, improve pharmacy economics and ensure GoodRx is the first and best choice for consumers at the point-of-sale. He will also be responsible for expanding and reimagining how we work with PBM and health plan partners in an integrated solution to further deliver the value of GoodRx. We also appointed Scott Pope, PharmD as our Chief Pharmacy Officer and Head of Clinical Engagement.

Scott will be focused on enhancing GoodRx engagement with all healthcare professionals, or HCPs, doctors, pharmacists, supporting staff and other constituents. Finally, we recently appointed Gary Kline as Senior Vice President of Government Affairs. Gary will be focused on advancing our government affairs strategy and strengthening relationships at the federal level to support our policy and advocacy goals. I am confident that our leadership team is well positioned to navigate the complex prescription medication landscape, position us for growth and deliver on our strategy. Our value proposition to consumers and HCPs remains strong. We help Americans save both time and money when filling medications, complementing their insurance coverage by bridging inevitable and growing coverage gaps and reducing friction in the system so people can get the care they deserve.

In the first quarter of 2025, over 12 million consumers and over 750,000 HCPs used GoodRx, demonstrating the strength of our platform and trust we’ve earned in the healthcare system. We continue to see engagement across all stakeholder groups in particular. Pharmacies continue to actively partner with us to solve customer affordability issues while also delivering on their profitability goals. We see pharmacies responding with enthusiasm to our e-commerce offering, recognizing the value we bring the consumer experience. And pharma manufacturers continue to expand their portfolios with us, deepening our partnerships and reinforcing the strength and reach of our platform to deliver access and affordability offers to consumers for brand medications.

These are powerful signals that validate our unique ability to connect and deliver value across the pharmacy ecosystem. I want to acknowledge the ongoing uncertainty in the macroeconomic environment driven by factors that could influence our business, including regulatory and policy changes, shifting consumer sentiment, tariffs and evolving government initiatives. I also want to acknowledge the news pertaining to the Rite Aid bankruptcy announcement this week. This is recent news and we are actively working to understand more. What we know today is that they have reentered bankruptcy and are pursuing a sale of substantially all of their assets. It is too early to know how this will exactly play out, but we do believe that we are well positioned to engage consumers and other pharmacy partners to ensure smooth patient transitions.

Ultimately, these prescriptions will be filled somewhere and we are in active dialogue with pharmacy partners to make sure we are best positioned to service our consumers. I would also highlight that our efforts to broadly engage pharmacy partners over the past several months have put us in a strong position for productive dialogue with potential buyers or landing spots for these patients, and we believe that we can create unique and mutually beneficial arrangements to support such patient transitions. Despite these potential challenges, the strength of the GoodRx brand remains clear across all economic conditions. Our leading platform is built to deliver consumers savings and access to their medications regardless of the state of the economy and retail pharmacy environment.

Our role will be even more critical as consumers prioritize essentials and seek ways to save. This is why we will continue to invest in our brand and its impact. We believe our value resonates strongly with consumers and we are proud that GoodRx was recently recognized as one of Newsweek and USA Today’s 2025 Most Trusted Brands. Now let’s dive into our prescription marketplace and manufacturer solutions offering. Starting with our prescription marketplace. During the first quarter, we provided meaningful value to our pharmacy partners. We helped retail pharmacies solve challenges they face around lower reimbursement and rising store costs. As we advance our position as an ally to pharmacies, we do want to be transparent that some prescription pricing has increased across our platform as we ensure pharmacies are able to achieve a sustainable level of profitability.

We believe strongly that partnerships need to benefit all parties, the retailer, GoodRx and most notably, the consumer. So it is important that we facilitate a marketplace of fair, affordable pricing. We will always put consumer affordability front and center in our offering in a way that is sustainable. As a result of some of these price increases, we have seen pressure on overall monthly active consumers, or MACs, and in our Integrated Savings Program, or ISP offering. Yet we have extended our leadership position in the prescription affordability segment as demonstrated by our growth in segment share, which has increased over 300 basis points year-over-year in the first two months of the quarter. Partnering closely with pharmacies on pricing sets us up strongly for the long-term durability of our offering and enables us to have unique partnership opportunities with pharmacies.

One such partnership involves our e-commerce capabilities. During the quarter, we launched a new experience for retail pharmacies that improves how consumers get their medications via the GoodRx platform. Our directly integrated e-commerce solution checks medication inventory, validates a user’s prescription and enables the consumer to pay on GoodRx before picking up their prescription in store and soon to be delivered to their home. This integrated solution is compelling for consumers and also helpful to pharmacies by streamlining workflows, reducing cost to fill and enhancing the digital experience. E-com is a core component of our broader strategy to modernize the prescription experience and embed GoodRx directly into pharmacy operations creating deeper retail partnerships.

We have launched this with one retail pharmacy partner and are actively engaged in conversations to expand to more pharmacies as we aim to further reduce friction for consumers and pharmacists. Now turning to our integrated savings program, or ISP, which provides consumers with a complement to their health insurance for cover generics. We continue to partner with PBMs in this offering and are actively evaluating how to best evolve this solution moving forward to deliver more value. One area that we are excited about is extending the offering into non-covered medications. We have received positive feedback from PBMs and pharma manufacturers regarding the integration of GoodRx’s negotiated brand price points into commercial plans where there are gaps in coverage.

We view this as a win for patients, plans, pharma manufacturers and PBMs. We are in active dialogue with a number of partners on this extension. Now turning to pharma manufacturer solutions. During the first quarter, we continue to drive our access and affordability solutions forward, partnering with even more pharmaceutical brands and delivering meaningful return on investment for partners. The power of our brand and associated consumer and HCP traffic makes partnering with GoodRx a must have for pharma brands to surface their access and affordability programs. We’re especially excited about our growing brand point-of-sale discount program, which enable pharma manufacturers to set a cash price of their choosing and deliver it straight to consumers with minimal friction at the checkout counter through a GoodRx coupon at the point-of-sale.

This is a key differentiator in our ability to partner with retailers as well as PBMs. We have strong proof points that our point-of-sale discount programs are resonating. For example, in 2023 we launched a point-of-sale buy down program with an insulin brand and generated significant incremental fills without cannibalizing existing business. Based on that success, the manufacturers expanded their partnership in 2025 to five additional brands. We are pleased that pharma manufacturers are recognizing the value of our offering and are continuing to expand their portfolios. Proven business results for our other access programs are also driving 2025 renewals and expansions. As an example for a vaccine brand partner, we were the number one source of scheduled vaccine appointments through an integration on GoodRx. This drove an ROI of over 15 times to the client and led to an expansion of the partnership to other vaccines in the partner’s portfolio.

The momentum and traction in our pharma manufacturer solutions offering is also impactful to our broader business. Winning with brands further enhances our ability to win with consumers, pharmacies and HCPs, which fuels more platform demand and utilization. In closing, I am very optimistic about the future of GoodRx and believe that we have tremendous opportunity to expand our business to help even more Americans save on their medications. Our value proposition across the pharmacy ecosystem sets the foundation for why our business is durable and resilient. We are focused on initiatives that will help expand our value to key constituents. First, serving as an ally to pharmacies through our pharmacy profitability efforts and technological capability initiatives, which help pharmacies better engage with consumers, improve workflows, lower cost to fill and elevate pharmacy’s digital footprint.

Second, helping pharma manufacturers reach their patients and targeted HCPs via our access and affordability partnerships. We will continue to extend our footprint both in integrating brand copay programs as well as point-of-sale buy downs. Third, building out the prescriber’s office as a go-to-market channel. This is a strategic focused area for our Chief Pharmacy Officer and we look forward to updating you on the progress we make in future quarters. And finally, continuing to invest in our brand to ensure that we remain the number one place that Americans go for medication access and affordability. We’ve laid the groundwork, sharpened our focus and are now leaning into the opportunities ahead. With the right strategy, team and partnerships in place, we’re positioned to grow durably and profitably.

With that, I’ll turn it over to Chris to discuss our first quarter highlights and guidance.

Chris McGinnis: Thank you, Wendy, and good morning everyone. For the first quarter, total revenue was in line with our expectations at $203 million, up 3% versus the prior year. Prescription transaction revenue and manufacturer solutions were up 2% and 17% respectively, versus the prior year. For the first quarter, adjusted EBITDA of $69.8 million rose 11% versus the prior year, which constitutes an adjusted EBITDA margin of 34.4%. This is an improvement of 60 basis points compared to the fourth quarter, and while ahead of our expectations for the quarter, we believe this will be within a sustainable range for the remainder of the year. We continue to have a strong balance sheet, ending the quarter with $301 million in cash with $91.7 million of unused capacity on our revolving line of credit, resulting in total liquidity of $392.7 million.

During the first quarter, we deployed approximately $100 million of cash on hand to repurchase 23.3 million shares of our stock at an average price of $4.32 per share. Given our stock price, we continue to believe that stock repurchases are accretive and the best use of cash. At the end of the first quarter, approximately $189 million of capacity remained under our $450 million share repurchase program. Turning now to our outlook for the remainder of the year, as we discussed last quarter, Wendy and I are committed to a transparent approach to guidance and given our limited time in our respective roles, we provided a range of outcomes within which we have confidence while providing ample room to adjust as we gain deeper understanding of the business.

For the full year 2025, we continue to believe that revenue will be in the range of $810 million to $840 million, representing 2% to 6% growth compared to 2024. There are a number of factors that influence revenue, including macro conditions such as consumer confidence and spending trends, tariffs and other policies related to drug pricing, economic climate, and our ongoing business development efforts driving our strategic initiatives. It’s hard to predict the impact that these variables will ultimately have on our full year revenue, but in an effort to be as transparent as possible at this point in the year, we have greater conviction and visibility at the lower half of our range with achievement of strategic initiatives providing opportunities to deliver in the upper half of our range.

As Wendy noted, we’re aware of Rite Aid’s announcement on Monday to pursue a sale of substantially all of its assets through a voluntary bankruptcy process. Given the timing of this announcement, we have not included any estimate of the impact of this process on our guidance. However, Rite Aid is currently forecasted to be less than 5% of our total revenue in 2025. As Wendy noted, these scripts will continue to be filled somewhere and we will leverage our retail partner relationships to maximize a smooth transition of these scripts. We will keep you informed in future quarters as this continues to unfold. With respect to our guidance for full year adjusted EBITDA, we are slightly increasing and narrowing the range now believing it will be between $273 million and $287 million, which represents approximately 5% to 10% growth compared to 2024.

With full year guidance as context, for the second quarter we expect revenue to be up sequentially from the $203 million we reported in the first quarter with an adjusted EBITDA margin roughly similar to the first quarter. With that, I will now turn the call over to the operator for questions.

Q&A Session

Operator: Certainly. [Operator Instructions] And one moment for our first question, which comes from Lisa Gill of JPMorgan. Your line is open.

Lisa Gill: Thanks very much and good morning. If I could, ask two things. One, Wendy, when I think about bigger picture, you talked about high impact initiatives. I want to just understand what you think are most important. I think you highlighted a few things, whether it’s retail, manufacturing, the prescriber, investing in the business, et cetera. But which of those do you think will really drive, what Chris talked about, which is the upper end of the range? And then I know it’s hard to put a number around Rite Aid. I appreciate this is all new news. But can you give us from a historical perspective, they have been closing stores, CVS has been closing stores. What has been the rate that you’ve been able to recapture or maintain that relationship with that consumer when stores have closed? Just to give us an idea of historically if there’s a way to think about it.

Wendy Barnes: Yes. Hi, Lisa. Thank you for the question. Good to hear from you. I will start with your first question, noting the strategic initiatives that we’ve got high confidence in and just can’t share additional detail on, on this call. Let me start first with the closer partnerships with retail pharmacies that absolutely would be item number one. And what I mean by that more specifically is directly contracting embedding at the counter where it becomes a much tighter partnership such that we have much better line of sight to capturing those cash prescriptions also included in that e-commerce partnership that you heard me outline. When we’re connected in that manner, we effectively become the digital front door for our retail pharmacy partners.

And when you point to also manufacturers, it becomes a bit of a triangulation with us sitting at the center if you will. So those brand partnerships as we’re continuing to add additional brands to our portfolio where we’ve got those point-of-sale cash buy downs, we additionally are conveying that value to the retail pharmacy partner. But the additive note there is that now our PBM partners also remain interested in wrapping or auto wrapping those non-covered brands. So it all starts to convey with us at the middle connecting these pieces both to the payer PBM, the retail pharmacy and of course ultimately the consumer ends up benefiting whether or not they are someone standing at the retail counter, separate and aside from their coverage or potentially as an employer beneficiary utilizing their benefit and then finding out that a drug isn’t covered when they initially perhaps would have intended to use their coverage at the counter.

So it really puts us at the center with an ability to drive those things. And while I can’t tell you specific partnerships today because we’re not able to announce them yet, what I will tell you is that we’re well beyond conversations on these particular opportunities. We are actively contracting, working out Ts and Cs and it’s very much my hope that we’ll have the ability to comment on these in an upcoming earnings call. The last item I would point you to strategically is that of the HCP or healthcare professionals. As we look at the prescriber office and the supporting staff and the pharmacist and the pharmacy counter, what we are now seeing with what we’re partnering with manufacturers on is that we have an ability to drive a much tighter partnership there.

And we are candidly not taking as great of an advantage of that as we should be today given the connectivity that we have to HCPs. And with Dr. Pope in his role, we are now laying out a strategy that I believe is going to produce material benefit to us. And again we look forward to describing that to you in a future quarter. To the second question as it pertains to additional store closures, I’m going to send that over to Chris for commentary.

Chris McGinnis: Yes, I appreciate the question, Lisa. I suspect – look, I don’t have – we don’t have specific data around conversions and retention of those scripts. But to the spirit of your question there is – let’s talk about what we do know about Rite Aid. This situation is a little different than past store closures, right. So we now have a process. We know their intention is to sell substantially all their assets and they actually announced the process, right. So they’ve sought a voluntary bankruptcy process, which does a couple things. And Rite Aid, for its part, announced in its press release that they want continuity of service, right. They want to make sure that patients have access to their prescription medications, and they want a smooth transition.

So what that means as a part of the bankruptcy is that a number of bidders will come into that process. In our terminology, we believe that’s going to be sort of what we call a file buy, right. They’re going to buy the patient’s records and transition to a different pharmacy. So working to create a smooth transition. We are already in conversations with some of our retail partners, which we believe will be credible bidders for a portion of these assets and we will work to smoothly transition those scripts. And by smoothly transition, we mean when they take the file over, that is a GoodRx customer and it will come over and it will refill and it will look the same at a new retailer as it did at Rite Aid, right. So to the extent that doesn’t happen in terms of a “smooth transition.” Look these are GoodRx customers and they came to our platform to begin with because they were looking for an affordable solution to access their medications.

So to the extent that there’s something happens that’s not a “smooth transition,” we believe those customers are coming back to our platform. We’ve got one of the best brand names in healthcare. As Wendy noted, we’ve been named one of the most trustworthy brands in healthcare for 2025. We think these patients are – they’re not on benefit for a reason, and so we think they’ll continue to do that. So trying to scale the issue again to the spirit of your question, it’s less than 5% of our projected revenue for 2025. The chance that that’s the impact is remote on us, right. So it’s going to be something less than that. And so it’s also the other part of the process that they now outline because we have visibility to a bankruptcy process. And the reason we can’t put it in our guidance is I don’t – we don’t know today whether this is going to take three, four, five bidders or dozens of bidders to buy substantially all those assets.

We don’t know the timeline for negotiations. We don’t – there’ll be some approval process with a bankruptcy trustee or some stakeholders or creditor committees and then, of course, other closing conditions, regulatory approvals, et cetera, and ultimately closed and then the script gets filled. So the timeline that those all happen on, how many transactions that takes and ultimately transitioning these scripts out, it’s really hard to know how that will impact us in 2025. But look, at the end of the day, while we’ve scaled it as less than 5% of our business, I can’t stress enough that’s a remote possibility that it’s that level of impact to us. And our job is to work to mitigate the impact and make sure that that smooth transaction happens in concert with our retail network.

Wendy Barnes: Lisa, I would just add on because I suspect this question is going to be on most everyone’s mind on the call, again noting that it’s less than 5% of our forecast. That would be on a 12 month view. So we’re already five months into the year. Clearly all of these prescriptions are going to disappear, right? We know that it’s going to be a significantly smaller portion than that. We also don’t think this is all going to happen in the next four to six weeks. I mean, this is going to be something that’s probably going to be stair stepped over time. Beyond that though, I also do want to reiterate and reemphasize the relationships that we have with pharmacies are in a significantly different place at this point in time than they were last year.

We are speaking top to top around those that are interested in obtaining these file buys, perhaps doing so in partnership with some. So we’re just in a very different position to be able to take advantage when these scripts transition. I would also note that of our millions of users, the percentage for which we have contactability is materially higher than it was in years past. So we also have the ability to directly communicate to these same consumers, who are filling medications with us. And that was not the case, certainly not as ubiquitously last year as it is today. You also did ask a question as it pertained to, I think, other retail closures. Look, what I would say is some of the others that you’ve pointed to, they’ve been in smaller pockets and largely those have been thinning in current markets such that the same retailer largely maintained those scripts and transferred them to themselves, which is also a far different scenario.

So as to the few others that you pointed to, nothing material that we would have pointed out that created an impact to us from a closure perspective.

Lisa Gill: Thank you.

Wendy Barnes: Thanks, Lisa.

Chris McGinnis: Thanks, Lisa.

Operator: Thank you. And our next question will be coming John Ransom of RJF. Your line is open, John.

John Ransom: Hi, good morning everybody. I’m just – on the legacy business, the old model, as you know, was to aggregate all these PBM price out goes mostly from the smaller PBMs. We’re seeing the larger PBMs go to cost plus pricing. CVS has said they want to have it all cost plus next year as an example. What do you see with the small PBMs? Are they moving to cost plus for their pharmacy networks? And if so, is that a good guy, a bad guy, or neutral for your legacy model?

Wendy Barnes: Yes, I appreciate the question. Good to hear from you, John. So, to be clear, a significant percentage of our business today already runs on cost plus rails. We’re somewhat indifferent to the reimbursement mechanism to the pharmacy. So that actually is kind of the point of clarity there. This is about how the pharmacy gets paid, but it really doesn’t overly influence how many drugs aren’t covered at the end of the day, that’s largely what drives the pool of opportunity for cash prescriptions. And I would also point out that cost plus or not cost plus, when you’re in a cost plus environment, notably most base prices tend to increase. And so as a result of that, there’s also going to be more pressure on the consumer in their funded plan to create an opportunity for a cash prescription.

And as you kind of heard me outline in our first quarterly call, and we’re continuing to use similar language, my overall vision for the company is that this cash offering of which we hold the number one position, simply be a complement to insurance. It really shouldn’t be an or it should really run alongside as an and. And that is what we’re doing by embedding as e-commerce partners with retailers such that it’s just always going to present itself whenever it’s more compelling from a cost perspective to utilize the cash benefit. And I would also remind you, given the pressure on price, what we know around so many brand medications is that there’s almost one billion prescriptions per year that go unfilled due to price. And so again, that just continues to create a pool of opportunity for us to go after from a cash perspective.

John Ransom: Great, thank you. And my other question, the old management team, so I won’t put you make you responsible for this, but they were pretty excited about the theoretical opportunity with GLPs. But as you’ve seen Novo has struck deals with Hims, and they’ve struck deals with CDS. Is that – I know you connect people to the Novo Patient Assistance Programs, but is the GLP opportunity still out there to be had or is that just maybe not going to happen?

Wendy Barnes: No, it absolutely continues to be an opportunity. And again, I very much appreciate the question. So, let’s start first with kind of grounding in what is happening with Novo and Lilly today. So, they’ve both created their own direct programs with their own direct discounted price. And to be clear, the partnerships that have been announced are largely with telemedicine pharmacies or pharmacies inclusive of CVS whereby those pharmacies are effectively redirecting the script to those direct programs at the manufacturer offered price. Having said that, we are continuously dialoguing with Novo and Lilly all the way at the top around how we can continue to be of assistance. So yes, their affordability programs are already embedded in our platform such that we are helping them engage consumers to get to their affordability program.

Clearly we’re not a fulfilling pharmacy, so the ability to actually fulfill those scripts isn’t an opportunity for us and they’re doing it through either their own pharmacy or a few select home delivery pharmacies today. So, that’s how they’re approaching the program. And again, I want to be clear though that through those programs it is their own discounted price that only they are honoring. No one at present has a discounted cash point of sale buy down price. I continue to believe there absolutely is an opportunity to get that, but I also believe it’s going to take time for more molecules to launch to put pressure on those manufacturers to produce a cash price buy down at point of sale. Now having said that, with the two large manufacturers out there today, I think, it will probably be evident which one would likely be more receptive to a cash price just knowing where they sit from a market position.

And I would leave you with this that those are the conversations we’re having. I additionally have asked both of these manufacturers why from a consumer experience perspective, even with their direct program, they wouldn’t want to embed those direct programs directly on the GoodRx platform. If you think about it from a consumer perspective, nobody wants to have to go to 10 different places to get their basket of drugs. And while I applaud both of these manufacturers for putting a lower price point in market through their direct offering, it’s still asking consumers to go through a different experience to get those drugs. And at the end of the day, the basket of drugs just doesn’t look like that. It’s not specific to one manufacturer.

So we are also in conversations to potentially embed some of their programs with us, which I think, should also be the long-term goal because we know that we’ve got over 2.5 million consumers on our site in any given quarter and that number is specific and accurate to our first quarter searching for these GLP1 drugs. So in summary, John, I would say the opportunity continues to be a large one, but we also are pushing hard for a true cash discounted price that we can buy down at the point of sale. And right now neither manufacturer is doing that.

John Ransom: Thanks so much, Wendy.

Wendy Barnes: You’re welcome.

Operator: Thank you. And our next question will be coming from Charles Rhyee of TD Cowen. Your line is open Charles.

Charles Rhyee: Thanks for taking the questions. May be to follow-up on John’s question there, Wendy, you just mentioned that the two large manufacturers for GLP1s currently are not offering sort of this cash price book. And the argument that you make to provide a better consumer experience certainly makes sense to me here. What are the reasons that they are not yet kind of moving forward with that perhaps? And I am sure they would understand sort of wanting to provide patients with a better experience as well. What are some of the reasons they’re providing that this is not the right time to do something like that yet?

Wendy Barnes: Yes, I think the short answer is we’re close. To be clear, they do see the value and also clearly understand that their patients, often with the script already in hand, are already looking on our GoodRx platform. I think it’s for a couple of reasons, the first of which is, look, they pretty recently just came out of their supply shortage situation, compounding pretty recently just effectively got put to bed. There have been a number of moving parts here. As such, their direct models continue to make a fair bit of sense, but very soon they won’t as more molecules continue to launch and there is more pressure in this class of drugs that will change the dynamic just like it does in any class of drugs as more molecules launch, which is why I think we’re going to be in a good position to take advantage of that.

Charles Rhyee: Okay, that makes sense. And I guess the other question, I think, it was Lisa’s question earlier was, you talked about sort of the opportunity with HCPs. If I remember a year ago, I think, the company had really talked about that the top 10 percentile of HCPs in the network were already driving something like 50% of the max for GoodRx. Is that still the case? And so it seemed like that was a focus already last year. Just trying to understand what wasn’t working last year to drive that further, because it seemed like if you get that next 20% – next decile to perform at the first that would be a meaningful increase. I’m just curious, what are you looking to do differently now that maybe you weren’t doing last year?

Wendy Barnes: Yes, no, good question. Look, first of all, Scott is pretty new in role, as I mentioned, but as we continue to look at the number of HCPs that are engaged with us. So, let’s just start with this year. We’ve already had over 750,000 unique physician and prescriber NPIs engaged on the platform. So, we know that there continues to be more opportunity to engage directly. And of course, you heard us “over one million” in 2024 were engaged. What we know is that that particular audience has over 90% awareness of our brand and so said differently with what we’re doing today, I think, you’ve heard us talk about HCP mode on our platform. We believe that there is a larger opportunity to take advantage of their presence on our pages in partnership with pharma, and we simply aren’t pulling that through today.

I think it could look very different depending upon which specific strategies we pursue. We’ve got a list of several items at present that I would really like Scott to share on a future call. But primarily this will Involve partnering with pharma to pull through the engagement we already have with HCPs and monetizing that opportunity.

Charles Rhyee: Okay, thank you. Look forward to hearing more about it later.

Wendy Barnes: Thank you.

Operator: And one moment for our next question, which will be coming from Jailendra Singh of Truist Securities. Your line is open.

Jailendra Singh: Thank you and good morning. Thanks for taking my questions. So, I want to follow-up on the guidance commentary on having comfort with the lower half of range, how much of that is driven by PMS business? You talked about macro environment. Can you be a little bit more specific? Have you seen any cautionary pharma behavior or less willingness to spend? Or is it that you want to be more prudent given all the uncertainty?

Chris McGinnis: It’s really the latter, Jailendra. So the way, I think, about revenue and you mentioned the pharma solutions business that’s sort of a traditional selling cycle. So, we have conversations with manufacturers and what we’re seeking to do is obviously not only expand the number of manufacturers we’re working with, but obviously penetrate deeper into the drug portfolios of those manufacturers we’re working with. And so that’s a traditional selling cycle where you’re having conversations, you’re deepening the relationship. So we’ve got a funnel – we got a pipeline funnel. We probability weighted so that revenue sort of, you fill and build, right. So you sort of fill the – the funnel, the pipeline, and you bring those deals through the funnel.

And so we have to sort of probability weight based on, the pipeline at the beginning of the year. So revenue builds throughout the year. I still have strong conviction that the manufacturing solutions business will be a 20% growth line of business for us. The 17% in the first quarter is sort of like on track for us because it will build throughout the year. So, right now as we just build the revenue profile of the company, I’ve got strong conviction in the lower half of that range and then I think continuing to execute on the core, continuing to drive some of the strategic initiatives that Wendy had outlined, drives us to the upper part of the range.

Jailendra Singh: Thank you. And my follow-up, max in the quarter at down mid-single digits, slightly below Street expectation, not sure if anything to highlight there. On the flip side, you clearly saw some better unit economics, which is something you guys expected as mix of lower margin pharmacies fall out of system and drive more revenue per script. How should we think about MAC and revenue per MAC for the rest of the year? How much more runway is left in pushing that revenue per MAC metric higher from current levels?

Chris McGinnis: Yes, I mean – so first of all, I appreciate you calling it out. We alluded to this back in February that we felt like, I know, probably and this is Street’s expectations, this is actually in line with our expectation around MAC. We knew based on some of our strategic alignment around balancing both retail profitability and economics with our core mission of ensuring that patients have access to medication at affordable pricing. There’s a balance there. And so how we ultimately hit that equilibrium of balancing that equation, I think, scripts continue to fall out of the system while that happens and then it gets rebased. And then look, we want to be a growth company ultimately we want to grow those scripts over the long term.

But how that sort of lands, is we’re kind of – we still think there’s a little bit of headwind on sort of MAC volume. In terms of the ability to drive the margin profile of those scripts, I still think there is headroom, I think, there is opportunity as we sort of still call out and optimize the right mix that will enhance that margin profile. I think continue to enhance it. But look, the customer is always front and center of everything we’re doing and trying to find that equilibrium and working with our retail partners. But both have to be true. We have to achieve our core mission of making drugs accessible and affordable, but we need a healthy retail network out there, so we want to align to their economics as well. So that’s the strategy.

Over the long term we think that will be add the most value to us. But in the meantime it’s probably a little headwind on MAC.

Jailendra Singh: Great, thank you.

Operator: And one moment for our next question. Our next question will be coming from Craig Hettenbach, Morgan Stanley. Your line is open Craig.

Craig Hettenbach: Great, thanks. Wendy, can you touch on capital allocation? You’ve been buying back stock and understanding the multiples low, at the same time there is a discussion here kind of wanting to be a growth company. So, how are you thinking about the current portfolio as it is? Are there any other capabilities from a tuck-in perspective that you would consider?

Chris McGinnis: Yes, I mean I’ll take a step first and let Wendy weigh in. So, in terms of capital allocation priorities, obviously we are investing in our business. I mean in terms of you look at our capitalized software continues to go up, we’re continuing to build out suite of capabilities as we integrate further and deeper with both on the pharma side and tie it back to the retail network. So, we’ll continue to spend money on ourselves first and foremost. And then look absent other sort of strategic opportunities that come up given the stock price certainly where it is, we’ll continue to put money back into stock repurchases. It’s just to us it’s highly accretive, the stock is undervalued. And so in terms of returning excess cash to stakeholders right now, we’ll continue to execute against share repo.

Craig Hettenbach: Great. And then just as a follow-up, if you were able to do 20% growth in ManSol, I mean that’s a very good outcome, particularly given some of the uncertainty in the pharma. So, can you maybe just talk about what that represents just from a greenfield perspective for you guys, kind of where you’re at with that business and ability for kind of penetration to be able to drive that type of growth.

Wendy Barnes: Yes, so we don’t – this is Wendy, we don’t specifically call out by brand, by manufacturer, obviously publicly what I will tell you is the pipeline is robust, there does continue to be a significant amount of room for growth. We remain convicted at 20% plus for this year. What we also know is that we’re continuing to expand not just the list of brands which is a combination of affordability programs, ad media, we’re also continuing to expand those point-of-sale direct MSA cash buy downs which involve directly negotiating with the manufacturer. And what we’re proving over and over again is an incredibly strong ROI. So what I’m equally excited about is we’re delivering results to the partners we already have.

They are broadening their portfolio with us. So it’s also going deeper with those same manufacturers and we’re continuing to increase the deal size with each of those partners. So that’s really where the headroom sits and we continue to be incredibly bullish on that opportunity.

Craig Hettenbach: Thank you.

Operator: And one moment for our next question. Our next question will come from George Hill of Deutsche Bank. Your line is open.

George Hill: Hey, good morning, Wendy. I have a question just to make sure I’m thinking about something right. I wanted to talk about Medicare. And with the benefit changes that kick in this year with the maximum out-of-pockets, I would have imagined you would have had Medicare beneficiaries in prior years that hit the – I guess that hit the catastrophic phase that then had a co-insurance payment where they might have tried to use a GoodRx card. And now that they’re going to have a maximum out-of-pocket, they’re going to get to the second quarter, third quarter of this year and they’re not going to have an out-of-pocket component where they might have been looking to use a cash pay card or discount card. I understand the complexities with GoodRx as it relates to Medicare and other government paid businesses, but I guess is there any dynamic that you’re seeing there in the Medicare population and maybe just remind us what your exposure was to Medicare users – at the end of 2024, at the start of 2025.

Wendy Barnes: Sure I appreciate the question, it’s good to hear from you. So, about less than 30% of our users are Medicare eligible, but to be clear, about 2% to 3% tend to hit their MAC or their maximum out-of-pocket or deductible phase. So, I think that the bigger point to think about regardless of the closing of the doughnut hole, is that there will continue to be pressure on these same consumers for where they’re spending their dollars. And ultimately Medicare is also going to be limited on what drugs they in fact do cover. So, there is always going to be a large, large list of drugs that are not covered regardless of what the out-of-pocket is for those that are in fact covered. And so we really don’t see a headwind pertaining to this, we continue to see the overall opportunity for cash use respective or irrespective of whether or not someone is Medicare eligible is growing.

Chris McGinnis: George, just to put a fine point on what Wendy said, when you think about less than a third of our business are Medicare eligible and our data showing less than 3% of those actually hit their MOOP or their max out-of-pocket, that if you extrapolate those two, it’s less than 1% of impact on us for closing that donut hole.

George Hill: Maybe if I could have a quick follow-up, you guys have the biosimilar strategy going on with Humira and Boehringer, I guess, can you talk about how effective that’s been given the initiatives by PBMs to be pretty restrictive in the channel, has that been a tailwind or a headwind to execution there?

Wendy Barnes: I appreciate the question. I mean I think we’ve seen reasonable uptake on pricing on the biosim. I mean I think we continue to believe that biosims represent in general and align with our affordability narrative. So, to the extent we can continue to obtain favorable pricing on any of those molecules, we want them to be available on our platform. I think is the short answer, because it conveys a better price point to consumers. And we know overall, particularly in that RA and derm category where biosims first launched, that the uptake in percentage of overall fields of biosims has been increasing nicely. So given that, I think we will continue to pursue contract and pricing for any class of biosims where it makes sense for us.

George Hill: Thank you.

Operator: And our next question will be coming from Steven Valiquette of Mizuho Securities. Your line is open, Steven.

Steven Valiquette: Thanks. Yes, good morning Wendy and Chris, thanks for taking the question. So, there was a question earlier on the revenue per MAC, which I think, you kind of answered in sort of talking more about margin. But by our math that was up about 7% year-over-year and it was actually the first time in years that actually went up. I was just curious if there were any other factors that drove that metric besides what kind of Jailendra alluded to earlier. I am wondering first, was there a shift in mix to higher priced drugs this year? Are you may be seeing more brand volume versus generic? And I guess also are you seeing just generic inflation in the overall market this year? Just curious if there’s any other variables driving that 7% growth in that revenue per MAC. Thanks.

Chris McGinnis: Yes, thanks Steve. I think you’ve sort of answered it. I think it’s all of the above. It’s mix shift, it’s higher drug use, inflation, it’s just – there is nothing other than that that I would call out specifically that’s driving it other than sort of just a mixed bag of the factors you’ve kind of highlighted.

Steven Valiquette: Okay, got it. Okay, that’s it for me. Thanks.

Operator: Thank you. And our next question will be coming from Allen Lutz of Bank of America. Your line is open.

Allen Lutz: Good morning and thanks for taking the questions. I want to follow-up on Steve and Jailendra’s question. Wendy, at the top of the call, I think, that you mentioned that there are higher prices in the GoodRx app. I just want to check to see if that is driving maybe the higher revenue per MAC at all. And then last quarter during the call, you talked about store closures potentially driving the MAC lower. As we think about higher prices and store closures, is there any way to bifurcate between those two what’s driving the MAC in 1Q. Thanks.

Wendy Barnes: Yes. No, I wouldn’t call out a delineation between those two items you just noted. I mean, the primary driver is the mix shift to higher margin or access at the pharmacy counter is again, we seek to bolster and enable the retail pharmacies so that they can continue to fill these prescriptions. But to be clear, we’re absolutely balancing that with a competitive and fair price for the consumer. It’s just in some instances, it might look a little higher than say it did three months ago, but still wildly competitive when you contemplate a cash price as a complement to insurance. But that is the primary driver.

Allen Lutz: Okay, thank you very much. And then for my follow-up, the VCRx acquisition in the quarter, can you talk about that a little bit? Is there anything you could share around how many members, how much revenue? And then are the members that you added there included in the MAC at the end of the quarter? Thanks.

Chris McGinnis: Yes. So, in terms of the total revenue profile, it’s immaterial as we called out in the Q, but this was a strategic retail partner that had a cash pay program and it’s private labeled. So, this is really as much about deepening our relationship with that partner and some of the other offerings that we’ve kind of highlighted and announced with this partnership. So, it’s less of about a contribution of revenue and more about deepening a relationship with that strategic partner.

Allen Lutz: Great, thank you.

Operator: And our next question will be coming from Michael Cherny of Leerink Partners. Your line is open.

Michael Cherny: Good morning. And congrats on a nice quarter. May be just one for me here on the margin side, as you think about the strong EBITDA performance both in the quarter embedded in the guidance going forward, having taken the full range up for the year, how do you think about the moving pieces for what’s in your control versus market oriented? What I try to mean by that is are you seeing – how much of it is a combination of better pull through on your revenue line items, your improvements year-over-year versus cost containment issues you’re pursuing? So we can understand the durability of what’s obviously been still a fairly strong EBITDA margin beyond this year.

Chris McGinnis: Yes. So it’s certainly a mix of both in terms of revenue and the cost side of the equation. And I don’t have a specific breakout of contribution that’s driving that uplift in the EBITDA, and margin profile and the percentage. But what I would say is in terms of what you ask about what levers in our control, obviously the revenue side is a little – there are components of that that are less within our control. Obviously there is a lot going on, I can’t remember a year quite like this in terms of trying to plan and predict in terms of volatility, consistency and those things. So, I certainly feel like I got a lot more control and more levers to control on the cost side. So I think that’s from a mixed perspective, I think, there is more levers to control there.

And I think it will bounce around a little bit. We have some elective spending, I think, we’ll do in the second half of the year. Wendy mentioned continuing to reinvest in our brand. So, I think we’ll see a little bit of marketing spend pick up as the plan right now is a little light in the first quarter, but I think we’ll pick that up in the second half, offset by some operational efficiencies which we’ll continue to press on. I mean we’re just really rolling up our sleeves there. So, I think there’s probably more offsets to be done there. So, we’re committed to being good stewards of shareholder money. We will operate the business as efficiently as possible, but we’re absolutely going to invest in our brand and initiatives that drive future growth of the company.

So, lot more control I’d say on that side of the equation.

Wendy Barnes: And I would just add as we think about the strategic opportunities that I believe Lisa may have asked about at the top of the call when we opened Q&A and I was also very purposeful in my remarks on using the word durable. A lot of where we’re investing are in strategic initiatives that deepen a partnership, whether it’s with pharma, the PBM or the retailer. That becomes a little more difficult to unwind when you’re conveying value to all parties in a meaningful way. And given our brand presence, the way we attract consumers, I’m thinking about this in terms of what could a competitor come in and do and potentially supplant. It becomes a little more difficult with the way we’re building some of the things we’re talking about becoming the digital front door and partner and the brand value that we’re conveying, a number of our competitors don’t have to be able to share with retailers or to wrap to those non-covered offerings inside PDM.

So that’s how we’re thinking about our strategic pillars. And the word durable again was used purposely for that very reason, because I want these things to become more in our control and more difficult to replace for our partners.

Operator: Thank you. And our last question will be coming from Daniel Grosslight of Citi. Your line is open Daniel.

Daniel Grosslight: Thanks for taking the question and congrats on the strong quarter here. We’ve seen a pretty significant expansion of direct-to-consumer distribution of GLP1s via NovoCare and Lilly Direct. I’m curious as you think about growth in pharma ManSol, and your relationships with Novo and Lilly if there’s an opportunity to become a kind of bigger front door to some of those direct-to-consumer cash pay only programs, whether through Novo or Lilly Direct, particularly thinking about your telehealth assets combined with your pharma distribution strength there. Thanks.

Wendy Barnes: Yes, it’s as if you’ve been sitting in some of my strategic conversations. Timely question. The short answer is yes, we agree with you. We’re having the same conversations with the manufacturers you note and potentially others that may have molecules either in this particular class or in classes that lend themselves to direct programs. Because we know that when any type of program is embedded in our platform compared to a distinct and separate environment that pharma has, it can be anywhere from 5, 10 to 15 times the lift through us as compared to that unique manufacturer program. Again, just because there isn’t a lot of consumer awareness on how to utilize those platforms and we’ve already got the trusted engagement of not only the consumer, but I think, it’s important to also note the HCP.

And that again is something we alluded to earlier. They also are looking at these price points in office trying to assist their patients. And we believe that continues to be a pretty large opportunity that candidly we’ve not monetized as well as we should. And so you heard me allude to what will be a much larger strategy there as well. And we do have a partnership with a telehealth provider. We partner with Wheel. We also think there is an opportunity to better leverage that partnership should we contemplate becoming more of that all-encompassing telehealth taking care of the visit in addition to servicing the script.

Daniel Grosslight: Thank you.

Operator: And I would now like to turn the call back to Wendy for closing remarks.

Wendy Barnes: Thank you. And a sincere thanks to everyone for joining us today. GoodRx has an exceptional value proposition and market position. We deeply understand the interconnected business relationships that drive consumer medication access and affordability and we are ideally positioned to deliver value to all of our stakeholders by fulfilling our brand purpose to the end consumer, which is a special especially important during times of economic and retailer uncertainty. Thank you again for joining us today.

Operator: And this concludes today’s conference call. Thank you for your participation. You may now disconnect.