GoodRx (GDRX) 9 Nov 232023 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. And welcome to the GoodRx Third Quarter 2023 Earnings Call.As a reminder, today's conference call is being recorded.I would now like to introduce your host for today's call, Whitney Notaro, Vice President of Investor Relations. Madam, you may begin.

Thank you, operator. Good morning, everyone, and welcome to GoodRx's earnings conference call for the third quarter 2023.

Scott our Interim Chief are and Executive today Voermann, Karsten Financial me Wagner, Chief our Officer; Joining Officer. begin, of Raj will Beri, will call.Before contain portion this also Officer to we today's be joining forward-looking everyone our for the call Chief that I'd like Operating remind statements. Q&A our management's call offering our environment contracting our do tax of considered without potential of of our including in assets forward-looking relate made financial plans, realizability certain with goals partnerships matters objectives, to with anticipated regarding growth, and solutions strategies, statements savings opportunity, ongoing the business, impact macroeconomic our and on under retailers, All the business. deferred the that our our of historical initiatives, the our on market third statements, grocery and parties, limitation approach of this cost former direct trends de-prioritization not and collaborations our impact anticipated our fact solutions be expected impacts manufacturer performance, on the statements should underlying business, of issue for pharma are other statements factors. promises These known but important uncertainties, risks, nor and unknown involve neither and guarantees achievements factors implied statements. future actual These our performance, be expressed results, any cause different materially by from results, or achievements may or forward-looking performance, to or the Form made call. quarter and actual to December those discussed the results XXXX, on updated XX, the XX, for forward-looking ended indicated from ended and cause on XX-K as could section Report Securities Risk the of Exchange differ Commission September this XXXX, Factors for the our statements filings other our our materially Factors with by year in XX-Q Form Annual Report on by Quarterly events of and our management's views change. forward-looking subsequent the of disclaim obligation this to if statements, statements any such as estimates update these to Any cause call, even we represent date

our previously non-GAAP termination future addition, the are believe as announced these they define from of past exclude we including with today's restructuring. business. not solutions client costs revenue revenue, contract excluding underlying referencing manufacturer will be remarks, indicative in We In of which associated we costs metrics because performance certain adjusted we revenue pharma or

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

eye with milestone was said our call, we're discuss us business I'm to revenue to highlight an for financial working third growth Thanks, growth. milestone our to Whitney, to will third quarter we in our results. year-over-year both financially QX top take today first priorities towards compounding then and thanks the and meaningful achieved quarter, On that and making we QX this to everyone progress our in the adjusted basis. been beyond. like through revenue to joining We've happy on an against Today, report and I'd XXXX results. the operationally important momentum returning the you rebuild Karsten in

raise yield end of part make our than non-recurring growth revenue is a to which revenue to and fiscal QX that the EBITDA contract the 'XX continue within $XXX range adjusted acceleration high $XX be million as be for adjusted relationship we expect down to million. we $XXX adjusted with our will year-over-year we 'XX We our million XX% that our XXXX valuable areas million through to prior We Adjusted to fiscal revenue. our to beyond. to million. in termination restructuring one-time modest outlook our more in to which sights QX a $XXX quarter, expect is ongoing of will X elected to $XX reduction in detail.I'd substantial full-year customer year GAAP $XXX savings.The anticipate guidance and Because turn higher full-year highlight our and like go implies particularly to Karsten a will announced year progress related adjusted QX as last range, to manufacturer solutions of be revenue we mid pharma vitaCare into includes a XXXX in the margin GAAP guidance. the payment revenue guidance million margin we GAAP to revenue business which provided

XXX several great affordability drove with GoodRx retailer and help relationships while pharmacy claim Transitioning and a number strategy, several members significant for their First, with parties. agreements to partnerships at positive our allows execute large that with to pharmacies continuing believe retail other network launched on nearly distribution deliver significant we annual September, us broad example, consumers band with of consumers this our money with volume also a prescription on the retail we consumers.For continue direct helped in save was margins. of these to to pricing and now of savings built partnership across and and PBM medication. we XX,XXX GoodRx retailers drive huge quarter. pharmacies, double-digit PBM in volume programs that margin retail specifically priorities millions in We're seeking enabled retail originally to both medications on hybrid their can program increased that to We've medication. structuring Walgreens incremental PBMs complementing to who are Walgreens model brought created help traffic drug-specific

retailer for retailer but coming our just been we're PBM pricing, benefit called transparency, ensure and marketplace, us help our lingo. consumer and more industry As demand price partners to alike, here proactively has retailers extend us network priority second margin continued insurance to partners. drive the value and funded believe over to with commercial plans quarters. for allow opportunities the retailers provide progress merchandising stability, GoodRx to to and will We retail a marketing the and programs strengthening consumers, not optimization.Our help in and and plan continue We value relationships also by creating expanding

partners, with trading more in insurance range get wide care can to benefits for are company. off what they healthcare third-party more coverage. commercial of that coverage options As complex together on We called patients there's employers.In for result and or and off It's of coverage a health continue plan the terms with And and falling even card integrated individuals. PBM the we benefits volume savings base same opportunity increasingly created of simple come an costs vast employee a from lower often payer the bring often short, The tandem the GoodRx's expenses GoodRx. for on to believe copay, with product afford all consumer constantly GoodRx has seamlessly our presents as within ISP employees. and providing several is we've corporate-funded price these program, funded their of of who majority employer-provided programs have closely their elegant. and for both benefit transaction their align case. benefit increasing proportion price an prescription The and their the huge of with deductible, benefit already a helps and Companies know, people plans is pays

Navitus each programs. there X asked over programs add integrated combined, cover During our who more the third further X and us about with savings lives.Now, we of U.S. Scripts. to Caremark programs quarter, relationships have strengthen existing These PBM frequently to with partners, XX% of MedImpact our these X Express are CVS the questions announced PBMs, and investors

is whether pricing first the or risks somehow. creating cannibalizing, The are programs

percentage And big single-digit is and a we've they XX up second the noted in prescription The of make material how medications see get pricing accessing question that first with integrated only top how savings. low our small on don't we risk, To can consumers to believe offering any direct-to-consumer fast. through there the issues. are we cannibalization, medications respect savings the

we are XX% U.S. who've the potential, adopted opportunity lives covered to with around changes a other every subset opportunity, with our may be We At these the GoodRx, quantify PBM want about trajectory These win-win-win year-end, and and in nascent available should of this members and partners going to only in program. are think doing could for the QX think partnerships that employ PBM over stage programs beyond. of be let terms a will designs for us. we the program of companies through XXXX, before consumers, we plan believe employers sponsors our to PBMs the by optimistic In and our eligible sizing we're track make though, these PBMs.Given significant. how The alone and are ISP's we're quarter coming the be that programs big into them.

segment deeply the GoodRx ecosystem of the integrated reach First, becomes TAM. incremental an savings prescription more and can healthcare into

Second, PBMs save helping incremental access their money. sponsors plan volume while

pharmacists at relieve outcomes.These providers of seamless point of access consumers and on pharmacy Third, get them helping experience the counter, better also adherence can burden. time to and healthcare which and well programs their improve prescription administrative as as medications most save at health a more create prices for both the importantly,

scale expected the programs in these integrated rollout of Some to once place will January and MedImpact programs going are are forward. live savings And expected XXXX. CVS eligible already the members benefit takes Caremark and

Our our which third medications, show solutions up and solutions manufacturer branded priority to P&L. as has our been for affordability access accelerate in pharma

brand direct care conditions.For Lantus global diabetes access number across drugs way for seeing to insulin most to a living out this diabetes new of ability $XX. offer unique prescribed Our large play brand a impact, drugs only people increase leader example, affordability Sanofi, working and with drives we're for a claims for to we're and in with their

GoodRx, initiatives government cost to access relationships leverage effort to system. not the healthcare to of low this with and the an within affordability their consumers implementation number slow actually to access insulin have with lower year, for point the and pharma their due of and Sanofi context, the For issues structural has and able able companies significant broaden a our they're in even medications. collaborate earlier been like price to reach When direct-to-consumer scale been

key performance, on to and of and marketing of volume industry solutions demonstration in a access metrics tens the access XX,XXX in ecosystem. direct increases the U.S.Affordability several consumer on regardless for expect brand pharma us prescription. prescription can we drug insurance intersection margin its rates growth. into as marketers to on of highly as marketers XXXX start.In to any in go-forward manufacturer This GoodRx for role core strength, both QX. point brands of healthcare brand prescription insurance of and pharmacies consumer to and and terms of buy-down programs millions will and prescription We're due professionals, impact set in bottom of healthcare on well with their at for believe financial connect solutions regardless status pharma per build transaction GoodRx's grow effective GoodRx is for clients from the value The to we the via our to The brands. and are becoming prescribers one reach and quarter-over-quarter our across that cost proposition GoodRx is awareness our Americans access of line apart return brand at that GoodRx We're connection accelerate revenue GoodRx's affordability retail can is XXx are Now of the a like for $XX a healthcare what new patient the value plays on status right itself Sanofi finding adherence. for enable translate GoodRx issues medication. prescription to our or ROI coverage. is are clear unique the using partnership that Lantus on in providing programs others of the distinctive Xx attractive able to patients to chain high These patients achieving focus continuing achieving others best-in-class to access savings

mentioned, and prioritizing that we programs quality standardized deal we've instead creating scale for expect deals one-off year, to rapidly. go-to-market been As we've this going

exciting schedule have teams inflight, Karsten the that, detail.There's forward year-over-year to our quarter vitaCare of in we're last things underway to ahead over to everyone deliver in headed by quarter.With includes hand work to will on we which where should like I'll and which adjusted XXXX. lead providing speak revenue And this organization. Our to savings Karsten. great in on it look next growth I announced updates XXXX. and to is track restructuring we're expected more across

each or do growth quarter-over-quarter. to largely is decreased is and ongoing year-over-year revenue. have since The increase fees model, of termination past you, underlying year-over-year has quarter to year-over-year for customer we turning in In were result before revenue, Total anticipate adjusted quarter contract by I'll decreased Thank X% upper PTR had adjusted the $XXX.X do program. not going primarily of 'XX during related and summary, to with in revenue offset costs results ranges. incremental speak revenue quarter, our contra financial increase by margin Scott. end revenue million. as in MACs partially X% first the believe as and driven on XQ another Transactions performance EBITDA, revenue to increased for Adjusted to client to the to adjusted the X% a increased our X.X million. revenue guidance. non-recurring our we're third We're our EBITDA to a associated MACs been quarter Adjusted Prescription flat of to with solutions quarter payment any well a restructuring recognized payment contract one-time $XX includes a adjusted forward.Moving Transactions announced shift as which not which we hybrid million $XX million $XXX.X calculation future incentive X% client million. our revenue from pleased it last up indicative the was manufacturer year-over-year pharma of reduction termination year-over-year transaction, of to $XXX.X This million excluded vitaCare revenue. as Prescription per a our to lower

payment. leaning manufacturer fees impacted which we slightly were reduction since manufacturer $XX.X revenue transaction. relationships, were $XX seeing Pharma related to termination near the I as termination mentioned is we connection any a million continue in partially million number on by contract where million of of underlying offering of past revenue client.As it growth.Turning a termination with quarter performance, decrease and retailer offsetting Kroger $XX.X of was pharma indicative the Subscriptions impacts Savings change well we made future underlying family single $XX Growth Gold very we're as towards million was payment in of revenue plans, as treated not this of they adjusted a contribution third primarily declining and the of count, solutions As our manufacturer contract down believe with portion plans to increases revenue decrease solutions we're offering's plans. away user to not plans impact this about of XX% client in running, into earlier, year-over-year we year-over-year. Club Gold and subscription the contract quality trajectory subscriptions. and Inclusive as XXX,XXX Club, volume offset do plans, which Kroger forms and a in ended client declined the Based optimistic associated was the to to million solutions of minority costs, per subscription a the the subscription total the the pharma mix quarter lower more $XX restructuring with in do our or we from anticipate due XX% incremental to a remain campaigns costs Savings was in term. the payment

sooner of and this on solutions of prior in be percentages as contract connection of those percentage pharma million related the won't however, GoodRx the information primarily we discussed of capitalized solutions point-of-sale payment and program, growth. Cost by technology of adjusted may with payroll quarter-over-quarter expenses to which year, and decrease elevated and and both third to $XX.X The quarter of Depreciation million pharma stock-based and $XX.X the our 'XX. reduced XX.X% points was related from $XX.X our of recognized and during the in with on pharma Gold solutions. ahead given arising savings primarily EBITDA restructuring revenue Cost the expenses restructuring third million as costs million which administrative lower Sales incongruent The quarter, The million is impact, period's including the higher the up increase $X.X continued clients view to as vitaCare Product versus presentation contingent as cash 'XX. expenses of including was a was restructuring fees.In momentum percents quarter quarter compared plan, relating increase informative rapid of loss assets higher increased in own million more Adjusted higher certain approximately and in capitalized Our from I $XX.X our $XX.X Transactions acquisition and million to dollars tabular of $XX.X increase was of to prior in well manufacturer revenue, last the in average that revenue. the to absolute more third basis the plans, related related driver quarter costs was million income year-over-year revenue in million intangible net percentages our by were $XX.X in an of to originally in the of expectations. principally software which incentives, in that call million reflected earnings in and Q-o-Q in manufacturer reference restructuring was offerings are third quarter solutions is compared reduction net marketing, disposal offset of change $XX.X X% personnel million million was expenses value for of and a believe approximately invest restructuring.Net of third in was acquired comment by EBITDA Adjusted in Prescription the than we of this up anticipated. primary marketing development $XX.X revenue. fair discounts million quarter quarter's costs our related other pharma the of $XX in to solutions year. third-party quarter. loss provided to partially versus $X.X XQ vendor year-over-year. by makes $XX.X manufacturer with revenue related year-over-year net year-over-year expenses. XXXX. in $X.X The primarily were driven primarily the was and continuing last our connection were payroll high-cost-to-serve off-boarding, is spent by compared termination million third calls.Please software, $XX.X million, margin client the revenue, XQ adjusted million comparable $XX.X amortization of pharma the to XX the sales million headcount. of XXXX. which we million consumer restructuring, compared were million costs, $XX.X client million third XQ including $XX.X XXXX. revenue million, $XX.X to consideration subscription loss of XX in driven Slide total year third manufacturer impacts decreasing million in $XX.X and amortization were Adjusted versus the 'XX a included XXXX, in activities driven manufacturer of our million of increase General accelerated expect The in a an revenue which on and Because shifting of versus vitaCare by the off $XX.X with QX increase $XX.X connection due operating is to since $X driven generated a in expenses last guidance.We compensation to period. our due a decrease ahead Amortization the

Our and capital focus shareholders. are value continue we'll investments high-return for allocation maximizing priorities and to unchanged on

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

revenue QX facility full-year guidance. We're of $XXX.X guidance basis. revenue revolving capacity, to our to Our adjusted XXXX of be on on $XX.X credit an and total unused had million.Now transitioning liquidity million representing reported

revenue XQ from third as mid-single-digit revenue million to year-over-year acceleration the adjusted $XXX Our outlook million, quarter. as which growth growth $XXX is for well adjusted represents

to expecting guidance the be which GAAP $XXX was full-year the our million.From termination quarters, and implies be of high one-time to to the above quarter identical restructuring high $XXX to million and quarter GAAP million. of for the mid-to-high third After adjusted Previously, last back $XX the fourth in revenue prior adjustment range continue in full-year, XX%.Moving adding $XXX EBITDA and guidance adjusted in EBITDA revenue expect million again in revenue $XXX we're expect to We we client to and range during adjusted fourth to manufacturer the delivered offering. XX% perspective, couple because we revenue XXs, XX% was within payment margins will to contract on between non-recurring. the by vitaCare million adjusted with a range GAAP that we've guidance revenue, be margin mid-to-high pharma solutions solely related to relation the our in margin quarter quarter fourth the

We Prescription $XXX revenue expect Transactions million to million. $XXX of approximately

to continued manufacturer We expect our services. guidance solutions offering, This pharma vitaCare million range including revenue $XX of $XX deprioritizing of approximately rationalizing of reflects this million.

subscription revenue in $XX approximately quarter. expect fourth million of the We

counts have been subscriber QX. Gold increasing, that again anticipate GoodRx in and may Our they we increase

to plans Kroger continue However, we declines fall to expect to we plans for subscription in the Club due operate. total program subscription Savings

fourth in year. performance conditions as revenue released approximately in RSU and shares other to co-founders' XQ were took the performance our delivery of expect related reminder, We The XXXX place million in to the be we 'XX grants this $X October remaining quarter.Also, of as a anticipated. as met

We're growth the due trend planning asked assessing years, in similar about expended you As calls. the 'XX our of the pay detailed as priorities Many guidance in we tax those the grants anticipate continuing to planning EBITDA cover the quarters, that third the for have October next operator cash next provide initiatives to $XX.X prior more cash range meet and in in continuing we roughly our XXXX related earnings indicated on for growing Scott the and for adjusted a perspectives annual XXXX. for the to 'XX.While of like over into liability taxes. on currently adjusted our mentioned business percentage performance RSU focus areas to expect in at right the about shares during and are we prior in to of XXXX, the delivery grant for revenue co-founders' growth exceed the ISP, discussed those catalyze approximately million good XXXX. XXXX you These and ordinary guide, priorities building previously views This course withheld XQ the with the new of the confident our was to in models, we mid-single-digit business. that are we GoodRx uptake incurred on call 'XX year connection are expenditure to of the our quarter, refine XXXX implied to rate including I'll expect we XQ following margins rate we cycle.With to feel XQ turn that, now it Similar or Q&A. in previous

Instructions] [Operator Our comes of of Charles Rhyee line the Cowen. question first from

most least kind wanted And partnership all you're in ones important towards to the situation. do you retail done obviously, over next, expect that let's that? anymore? you what few how we've I a sense, know I of kind quarter have a I direct not And a on what or details. you've that with ask, us sort have guess in the these and to lot now within lot you your as of going is gotten sense of work say, -- the the guess, PTR, the can well. to of that information of retailers. do feeling first progress directly announced percent are issues about network coming to months of relationship? we're at of that confidence make appreciate stability Walgreens a past and in retailers, of partnering This Maybe And here and I sort Kroger back I you a you months kind more a give really,

of retailer a progress. the we working want such with but value Appreciate into we're finalized to as would relationship deliver same, And themes with, retailer-by-retailer millions contractually And and first Charles, to XXXX. again, volume on question. our retailers will Great say, more several, us are it's that plans targets. what proposition of defined really with and in think foremost, help covered our is help I it.And with framework with both our where of about which to through I'm to happy but good enabling we're, it. our with happy also it's I'm basis, feel retailers we're land it. medication And on the doing affordability I others to on and and their we've going the closely, go operationally both that margin with Scott. discussion to of different, working each get And I retailers, pretty is both a tens Americans. is

direction retailers would a have that with just you you is the those past, value do feel overall, bring relationship different them very do a it's sometimes, in sort when Because to who -- a maybe in sense going, contracting, lose the know feel relationships so like say would out full where yet through don't even have you direct And there's you like about you -- a because drug. them? with you on I speak of that with excited weren't that the proposition them GoodRx right, cash-pay they pharmacies you

Yes, XXX%, Charles.

So I think what you're seeing is examples.

both you're right, network are and seeing this also importantly, these part good that them prop. for chains, out more probably are won't they're too, last you a months of individual big of and great some And happening also. our execution call X retailers in the But core relationships world, pricing specifically. with back the that's individual X PBMs to track value If for because to I

this So you're examples of seeing inflight. an

of ways important some about a works think demand done on is its this point I side the partners one forever both how is that either is work contract for and and in a on marketplace supply basis. everybody with isn't single This fulfillment.

tie really engineering effort, continue pricing point again, not work. broad I'm of partners with of to the it's retailing for work so mindful but on to underway just basis.So forever that sort we we're everybody ongoing contracting ourselves can so pleased both the that's an closely our all a on then is and value And add

Jailendra of line the from comes question next Our of Singh Truist.

clarification, Scott. First, a quick

consensus I'm I mean, couldn't drive happening, for volumes through more follow I these you will I PBMs. then will we there's why I already clarify flowing see X% mentioned to why the programs understand X%. is -- because think if will question assuming preliminary, that revenue delta they are -- no cannibalization where Why it's Maybe scripts PBM. will ISP really main but is. expectations, XXXX on big more growth to my volumes? that. But compared

X%. you're yet, year be not other know or will were clarify I any reflecting you I we headwinds growth given confirm expecting X% than ISP if more. all that about mean, because, can the outlook? quantifying least Maybe facing in contribution to there at headwind, some that higher incremental talk be but you're to ISP, you're to So this benefit tailwind Maybe

color there. some Just

I'll Karsten. I'll to start then -- ISP Raj. on and with is start off question the off pass this

how the we're of partners, we're ESI, ISP going Caremark others is like with and about First multiple really all, live next thrilled program including live year. with We're going.

comes on and ones, too the there's is they're volume going claims was think is high, think PBMs, question another insurance ecosystem cash price their for because into to and too that are on with the copay attractive. would question, program, I -- it at I seeing happen or -- there the now high the were just option all. claims for is there And not are was those down where the there the those ISP not them. cannibalization And what really price

now And so Karsten pass on to second ecosystem, within that the part. that's is incremental.I'll staying and the a claim so for it's

as XXXX, to we QX. respect expecting your aligned with second said, growth of which part question, with think we're was I the

lower So growth. mid-single-digit to mid-

assessing and at stages they're we new early year. get more know And also begin going as have our into more important point, as we partners we a is plan pharma some But we that's and what perspective, see think guidance distinction. look an that we particular. we're we we'll is their XXXX. providing And ISP from really very for been not what important this into lot pharma man levers, ISP sol growth. based or and sol, we the we've the on to what normally response growth in still in of ramp here hope The of that's to that I provide opposed we more forward to call continued we believe why when that the anticipate. know, our is as and thing of detailed might in guide the think on We lot now a think getting. I information including or indication questions man said what And positive, we to ISP

question KeyBanc. the next Our of from line Schoenhaus comes Scott of

manufacturing kind of market? changed following a pharma to you adjust more the question. Just would what seeing or you the Just are that of Jailendra's and that to saying together something parts market. your customers be on are trying revenue, moving cause in The broader year? currently that revenue with solutions Has up budgets What initial for outlook kind on your piece 'XX end more cautious guidance? about of next

access the for GoodRx I hearing ways, of proposition And -- you're in of us, in years, transaction and our budgets. the X X commentary business their the really that, think industry, patients match agencies. is are brand a and to up.But front still of behalf than is running of always there's marketers for be work control the years through and getting less as them now with getting a gosh, go work I've in proposition business These able although And of this it front those It's X old. months, ramped should in of in to our all is sponsor in XXXX, value drug we engine now right a brand of macro to the should There's at the our and into little this is, budget-independent. own. value budgets look about really. things first And and that again, we're physicians on the right bunch we pilots brand I'm less whole for be GoodRx drugs move effort bunch been pick "Hey, getting hopeful run And Really now we the marketers, program should some and through matter. context, that go GoodRx." transaction. And we do and is and kind through that people right page say, marketers that our then for a which your the on have I really of no-brainer your the doesn't shovel susceptible brand marketing

Lisa of line Our JPMorgan. next from of Gill comes the question

want way because back to it just that to what's the understand to go program is deductible talking to primarily going not forgo I going I comment, times, plans, that's being minute people afford from each high I for something. Scott, a drug, PBM back the and make into The this they to able in the to ISP the will my is take talking many sure PBMs have time. are about we're so that understand and But understanding drug. your employer opt to that

So kind in as of guidance will we Or XXXX? is next transactions? XXXX, similar this have move give think they about on I for will see couple in you you we'll be rolling margin as That XXXX? an idea question. secondly, so of design then my plan plans be what when about notify Rx say, think the you, months, when the ISP, in for And it would today to first throughout we

rollout, is of little the terms different each a of for opt-out the or PBMs. opt-in In

again, And it you into through essence And around But what from again, to a will PBMs, all of to that things back to of yes, first themselves, only really out January value us this discussion I so there's the with think, you're come that's a payer but and the customers. prop different. little roll ramp. their not we bringing tighter expect. help And all of get nice, right, and the of as one uptake for the quarter, they're it's as the certainly range the that's

it of that's the to how kind work.Let me it Karsten So question. off or on hand will economics Raj

Yes.

pharmacy win. claim it generally the model about mirrors economics core perspective, think through more generally, in best our comes the think will price it business at I geography that particular that we every meaning particular the multi-PBM identically, in, from with flows that an essentially PTR ISP and PBM when

of the So perspective. the economics prescription revenue economic from it's and revenue from substantially an transaction our the looks perspective, transactions line identical in

comes Eric line Our Sachs. of next question Goldman the Sheridan of from

back dynamics those to wonder about of, think for you're understand headwinds how some was and some I and the should tailwinds But should evolving of sort QX? next that year? be the in or Because as aware if going it variability us seems underpin of that we and like also guide you that, the what in Maybe terms you're the run we implying of we to tailwinds there that. shift headwinds margins mix should both margin building Can those way And forward you better out. commentary. see of take QX help

It's Scott.

not we're about only think in you going really but growth. next as broadly, QX spot nice into year, a have think flow-through nice to I from incremental revenue

in nice the rebuild position So a sizable through things flow be going described giving now and different one. into to on with works, marketing through able to front a lean to little our what talked amount I haven't nice way, pharma but margins. of doctors' think good And same in the business doing a And been returns things there's areas nice a as manufacturer what on little solutions is And seeing it's the will today. a return underway in as spend what a to consumers what but the and we balance in ourselves let to that's I offices, brands, we're different Two, marketing revenue to or to really more vitaCare, think you're signal. we try both back we've bottom-line, works. a to again, a to to growth, we're way create a invest right brands. that that room ISP on get get growth than we're the whether help as we in nice lot past it's which is Then engine continue signal retail go-to-market see going to like us are about got we patients, again, in our and that to at has

Hettenbach from of comes question next Our line of Stanley. Morgan the Craig

as set. pharma come back more the to it sounds Scott, being kind you're opportunity focused you manufacturing wanted And Just of solutions. to like evaluate the

do growth could this range in out a coming even it's if or see to opportunity kind how over of years? you what grow time, As you look market the the

access. most to start on are matching right brand I should billion that when GoodRx, market fulsome that them taking millions revenue. a it would first for absolutely The a of business together logical that programs only And what that when think for kind years $X spend say, where be multiyear in at tens prescription a look access lay will companies we pharma some on lives million than today, only the out programs I at is of point at generics brand the of drugs get of like if broadly, at of access more X patients of but X% the for like I somebody in however, it's $XXX means a opportunity the way, actually old, less something basis. feels everybody goalposts not XXXX, Investor GoodRx. quarter and Day,

basis, you on this so be seems it it if we And think potential multiyear for a significant it should about because and significant work the should and absolutely, we work.

line the Stan Fargo Berenshteyn Wells from of comes question next Our Securities. of

filling it? in fall of for PBMs but deployment Like the instead you've On that seen sense of far ISP, pay I sometimes how been formulary thus can a going the end has for Is to here? the maybe cases cash up situation, realize early, you give of us what it's that type and kind out use of of deployed the it a you thus prescriptions far? still this program

Yes.

I bit by PBM. a think, again, PBM little as Scott different mentioned, by it's a

pay those cash examples either are ecosystem, that that deductible within cases of these PBM's use mix that there compelling case medications overall. the our also high for not of is overall. think What that us with is the I that a out are them we're actually and formulary we work drugs actually than to seeing consumer very that drugs just they're see different cash offering are of in the forms definitely where fall staying

that all. covered it we're at we not drugs that type are And there's life-sustaining. so lot maintenance of And we when meds for at seeing see a look cannibalize mix, that of

incrementality this that's capturing market. we And it's and win-win see as win-win we and to so a And want for that really, us serviceable really as addressable to who PBMs lives are new expanding it's reason, out us, a possible.And roll this many new stream, consumers. great the for so kind for why it's of revenue really it capturing for as we're as a

the Grosslight of Citi. Daniel question comes Our of line from next

quarter in do contracts, mix anticipate but lower your 'XX, to think about least that of your will continued PTR bit this a has you say, volume fee given direct be could headwind headwind the contracting MAC direct contracting headwind? admin direct volume the or shift, offset in then broadly, fee. curious strong revenue be of if shift fiscal And the to for fee. that lower was admin as -- direct I'm a we a should I mentioned mix headwind You some the I offset know a contracts. this at volume admin

offset, This When is Karsten. From the per at so digits. they higher That PTR we slightly benefits. counts quite our perspective, by first down for have to but grew either MAC, volume Q-o-Q we which of significantly degree all, that when drifted that for in matter. single ever Y-o-Y our our some on example, yes, look was at look MAC think you or year-over-year, I seen

and MAC have, gain can But per you're versus we it's as a a from those marketing we at as volume we for in filing, component PTR in the sort it. revenue some down barely what at the to #X, perspectives, direct be changes And would But offset of a contracting we PTR drivers call, of the contra beginning things to indicated per prior there the all. X the looking think I drop of degree. otherwise #X. of said are a be do calls portion have slight So rev expense. Q-over-Q, our at And effects when part the MAC to component on

of Our Davidson. next Robert of Simmons question comes from the line D.A.

a I are is a you -- from? So payment that be of forward? the off I much was the going how customers' million away much to how wondering is headwind exit related will one-off, but business $XX walking revenue $XX know million

one. take that This I'll is Karsten again.

event manufacturer a adjusted We to payment this to accelerating the customer savings, customer really to off quickly restructuring. vitaCare had important sure the that them us good themselves really part beginning as us and payment new customers one-time in well. of services big benefit what that is what's areas. is led ensuring here one why that they're vitaCare wind-down because the obligation shape it view, continue to to rewards And elected restructuring to into revenue of our an from to transition and a particular think which metric. set and accelerate able make more important supportive starting the them good note make, that non-recurring this and when to drove to standing, to we specific, our transition XXXX want that our to the they we our I ongoing in is is as services from allow solutions and, the and at the is up in was the for their we're asking reaping to in And that that other and very revenue we're transition we in us our in off of in really part vitaCare of successfully.It'll earn restructuring that fully with environment expected they're were make reap of anticipation. the

Our next Raymond the of James. line Parker of question Snure comes from

John This is for on Parker Ransom.

Was run fulfilled, slight like then And I away up write-down of question. that's pharma down this a it's to building why of not was following essentially good I'm trying rate some write-down? to want to mechanics you're being this revenue understanding given just that the walking of understand a a previous on build line considered previously a maybe just versus a it million the booked get a it rate why item. is of to that, from off kind adjustment period this of that kind item. sol business step not of be was in going necessarily business? going and to $XX or line this run forward, off is contra revenue cost kind man there and of revenue is why revenue was just a prior cost Just now Like, revenue? and actually of mechanical

I'll take those in reverse order.

Parker. think thanks -- the for question, I

things happy good customer one so On worked them. have quite with out made the I $XX base. the think is that the a way of reasons the payment we And absolutely is that for the million, is

customers reason this a except contra is inherently extraordinarily it's to first I a XXX question, that -- payments of payment think under in rev, circumstances. sole the the are customer. to because to under your part And is rev contra limited ASC

to that's So expenditure reversed There that equals of the and indication was a customer at revenue treated. that being no the simply a from payment matter book contra how that It's rev. of be perspective, went all. to anything guidance that cash customer sort of or should

comes Our Deutsche from line of next George Bank. the of question Hill

have lumped of together. kind all X quick I ones,

rollout being hear the to you partnerships. come what wanted the relates Would guys to Charles' relationship ESI retail has the call, learned love you've I continued. question on pilot QX the it On then as as to And just about to in of tends of second, value retailers. guess And again, stage. back or could for what's retailer I for a the think, like the I be the these be the we know the you discount the would relationships, share in that kind cards economics headwind about use to prop helpful. talked anything

Scott. it's Yes,

Let me do your of part the second question first.

make is really in -- You're XXX% part a big demand of means. and towards that an workflow industry standpoint. retailers and and frankly, in workload right whole and, But broadly, focus how practices with not from better. business it's terms on the of economic orienting just and worked to doing what it retailers lean what And has we're

wanted set Walgreens done to particularly month was a so spike. whole with action that and pricing there drugs. And where And example a retail of partner us one we've Walgreens doing with was some for a of emphasize

being this of meaningful first traffic with offsets the and on going your question. certain API your what to off energy, standpoint time, that we our to to resourcing where first do -- that absolutely pricing a it partners should forever we're drugs answer that, It's standpoint.I'm how it's models. the to building had real-time them how and both where, basis I it hand the with it drive.There's call with it how both that so the and things trying manage work. this is that them And help that to we retailing were tooling an impact also helped able Raj of earlier, attention it from manage And and to is are volume how work. on not they but works margin. work investing today, should get and therefore, part doing And to to a And

we happy ESI, incremental over on their really And we're all, happy their this bigger and really really, first how evolving really is really anticipate incremental just employer actually and and of and addressable this Yes, us, time. expanding and Scott. into members Thanks, about Yes. ESI rollout a happy is, us beneficial really about it much business gone the volume And market. is to broader initiative plans. ESI how why has we're it's for our it's about for

of more on this program in is, out, ramping we a focused transitioning to so year, even can we've single-digit our to XXXX members into get to member before, ESI revenue. we -- program? percentage successfully be And eligible to means optimize of and financials, And represents a the terms mentioned the rollout what as we've can Overall, the And tiny how we expect with XXXX. broader work how been conversion? in it work that

as could it be beyond expect move material XXXX. more more and We we

both drugs for upon within ton and match where scope for what to There is X and PBMs with to and to our strategy adds point One insight distinctive pricing dynamics again. -- it's our something which is a this retailers reach they the GoodRx value adds value system incredible of degree in ability want to question different a into your parts is the do. the of Scott between And across threads the depending that category. pricing

what's you part cetera. with ecosystem, relative that, us of to And do et GoodRx about tooling, with so is to ability for if think others insight, both in distinctive the our

ability sophistication and frankly energy, and support one the we're And on it time, to around to our resources comment spending more on so this across underneath the of that pricing this and sophisticated team do relies engineering system.

of Jack from question Wallace next Partners. comes Our of Guggenheim the line

Sorry. came late. on here I

these apologies already if have are been So asked. --

your about so in we how conversations Just seeing potentially with should that's advertising on guess quickly XQ the pharma realignment clients, spend impacting then of on next terms the some there pharma I year? of what of of impact going And the in you business budget business. seasonality the far think there? are

We're in with deep right for and now planning with and agencies. XXXX just discussions the clients RFPs

we speak. And so as really that's happening

still getting getting about in think earlier, selfishly designing developing in the GoodRx, the then is what ] or right -- the It our certain our them call XXXX. what other certain companies. opportunity within at the standpoint, more brands. us to lets And is said people of just I and I of front going first and programs I we're divisions [ getting new those expand from enough entirely thing brand-brand far that foundation and that

so brands, access And where and our beachhead roll in evolution them awareness go and -- more our this we those are of get still is on then out.

macro thing the to is So we're always that's our really in that control. is that mostly affected but do ability nice budgets, and our -- by certainly

questions further remarks. for Wagner to now closing As conference to I would there turn are no back Sir? the like queue, Scott in

all we couple our that priorities a And year-over-year XXXX. do incredibly to everybody. to of Thanks really off. on and hit get we as growth benefits We themes into is a GoodRx. for focus before match to that. continue the nice proposition set were our important They of us. for financial have sign of appreciate compounding we value on Hey, pacing a should and joining have Thanks are the great. Maybe It's important a milestone hit which questions, for it. -- that are

both, date next specifics in to fulsome We first XXXX, and more into our as Day trying on calls, we're set in will give and have process we the around quarter Investor definitely quarter to everybody. a the get the year of with a

to and we'll for couple Thank time, in thanks months. talk you. the a again, So everybody of

concludes Thank conference for this you today's And call. participating.

You may disconnect. now