GoodRx Holdings, Inc. (Nasdaq: GDRX) (“GoodRx” or the
“Company”), the leading destination for prescription savings in the
U.S., has released its financial results for the fourth quarter and
full year 2023, which are consistent with its preliminary results
announced on January 10, 2024.
Fourth Quarter 2023
Highlights
- Revenue1 and Adjusted Revenue1,2 of $196.6 million
- Net loss of $25.9 million; Net loss margin of 13.2%
- Adjusted Net Income2 of $31.1 million; Adjusted Net Income
Margin2 of 15.8%
- Adjusted EBITDA2 of $57.3 million; Adjusted EBITDA Margin2
of 29.1%
- Net cash provided by operating activities of $15.9
million
- Exited the quarter with over 7 million consumers of
prescription-related offerings3
Full Year 2023
Highlights
- Revenue1 of $750.3 million
- Adjusted Revenue1,2 of $760.3 million
- Net loss of $8.9 million; Net loss margin of 1.2%
- Adjusted Net Income2 of $114.6 million; Adjusted Net Income
Margin2 of 15.1%
- Adjusted EBITDA2 of $217.4 million; Adjusted EBITDA Margin2
of 28.6%
- Net cash provided by operating activities of $138.3
million
- Over 750,000 unique healthcare providers (HCPs) visit GoodRx
annually4
“We’ve locked in on creating value for consumers and ended the
year strong building on our third quarter progress with
accelerating momentum in the business, both financially and
operationally, in the fourth quarter,” said Scott Wagner, Interim
Chief Executive Officer. “We’ve been ruthlessly focused on driving
prescription-savings events by leaning into our deep relationships
with retail partners, bringing the fundamental benefit of GoodRx to
commercial plans through our integrated savings program and
bringing savings to brand drugs through our pharma manufacturer
solutions offering. These all reinforce our value proposition and
are expected to continue driving topline growth in the first
quarter and the full year 2024.”
1
Revenue in the third quarter 2023
was impacted by a $10.0 million client contract termination
payment, which was recognized as a reduction of revenue, in
connection with our plan to de-prioritize certain solutions under
our pharma manufacturer solutions offering approved by our board of
directors on August 7, 2023 (the “Restructuring Plan”). Revenue
excluding the $10.0 million client contract termination payment
represents Adjusted Revenue for the third quarter and full year
2023. For all other periods, revenue equals Adjusted Revenue.
2
Adjusted Revenue and metrics
presented as a percentage of Adjusted Revenue, Adjusted EBITDA,
Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Net Income
Margin, and adjusted costs and operating expenses are non-GAAP
financial measures and are presented for supplemental informational
purposes only. For the periods presented, Adjusted EBITDA Margin
and Adjusted Net Income Margin are defined as Adjusted EBITDA and
Adjusted Net Income, respectively, divided by Adjusted Revenue.
Refer to the Non-GAAP Financial Measures section below for
definitions, additional information, and reconciliations to the
most directly comparable GAAP measures.
3
Sum of Monthly Active Consumers
(MACs) for Q4'23 and subscribers to our subscription plans as of
December 31, 2023. Refer to Key Operating Metrics below for
definitions of Monthly Active Consumers and subscription plans.
4
Based on internal data on unique
HCP visits to GoodRx for the year ended December 31, 2023. A unique
HCP who visits GoodRx more than once during a given year is only
counted as one unique HCP in that year.
Fourth Quarter 2023 Financial
Overview (all comparisons are made to the same period of
the prior year unless otherwise noted):
Revenue and Adjusted Revenue1,2 increased 7% to $196.6 million
compared to $184.1 million. Prescription transactions revenue
increased 11% to $143.9 million compared to $129.4 million,
primarily driven by an 8% increase in Monthly Active Consumers as
well as quarter-specific favorability related to certain client
contracts. Subscription revenue decreased 6% to $23.1 million
compared to $24.6 million, primarily driven by a decrease in the
number of subscription plans due to the anticipated sunset of our
partnership subscription program, Kroger Savings Club. Kroger
Savings Club revenue was over $1 million less in the fourth quarter
of 2023 than in the prior year period. Gold subscription plans grew
year-over-year and quarter-over-quarter to approximately 694
thousand and Gold revenue was $21.5 million. Pharma manufacturer
solutions revenue decreased 2% to $24.4 million compared to $24.9
million, primarily driven by the impacts of the Restructuring Plan.
The prior year quarter included over $2 million of revenue related
to vitaCare, whereas in the fourth quarter of 2023 there was
essentially none. Other revenue of $5.2 million stayed relatively
flat.
Cost of revenues decreased 13% to $15.2 million, or 8% of
revenue, compared to $17.4 million, or 9% of revenue, primarily
driven by a decrease in personnel related costs due to lower
average headcount principally as a result of the run-rate cash
savings from the Restructuring Plan implemented beginning in the
third quarter of 2023. Adjusted cost of revenues2 decreased 19% to
$13.8 million, or 7% of Adjusted Revenue2, compared to $17.0
million, or 9% of Adjusted Revenue2.
Product development and technology expenses decreased 13% to
$32.0 million, or 16% of revenue, compared to $36.8 million, or 20%
of revenue, primarily driven by a decrease in payroll and related
costs due to higher capitalization of certain qualified costs
related to software development and lower average headcount.
Adjusted product development and technology expenses2 decreased 8%
to $24.2 million, or 12% of Adjusted Revenue2, compared to $26.3
million, or 14% of Adjusted Revenue2.
Sales and marketing expenses increased 11% to $93.8 million, or
48% of revenue, compared to $84.1 million, or 46% of revenue,
primarily driven by an increase in payroll and related costs as
well as a net increase in advertising and promotional expenses.
Adjusted sales and marketing expenses2 increased 6% to $83.8
million, or 43% of Adjusted Revenue2, compared to $78.9 million, or
43% of Adjusted Revenue2.
General and administrative expenses increased 6% to $30.4
million, or 15% of revenue, compared to $28.6 million, or 16% of
revenue, primarily driven by a non-cash charge related to the
disposal of allocated goodwill associated with the Restructuring
Plan recognized in the fourth quarter of 2023. In addition, the
year-over-year change was impacted by increases in payroll and
related expenses and third-party professional services costs,
substantially offset by decreases in stock-based compensation
expense principally related to the non-recurring awards granted to
our co-founders in connection with our IPO, legal settlement costs
and change in fair value of contingent consideration. Adjusted
general and administrative expenses2 increased 43% to $17.6
million, or 9% of Adjusted Revenue2, compared to $12.3 million, or
7% of Adjusted Revenue2.
Net loss was $25.9 million compared to a net loss of $2.0
million, primarily driven by the individual factors described above
as well as due to an income tax expense of $1.2 million, compared
to an income tax benefit of $2.8 million. Net loss margin was 13.2%
compared to a net loss margin of 1.1%. Adjusted Net Income2 was
$31.1 million compared to Adjusted Net Income2 of $27.4
million.
Adjusted EBITDA2 was $57.3 million compared to $49.6 million,
primarily driven by higher prescription transactions revenue.
Adjusted EBITDA Margin2 was 29.1% compared to 26.9%.
Cash Flow and Capital
Allocation
Net cash provided by operating activities in the fourth quarter
was $15.9 million compared to $31.9 million in the comparable
period last year, largely driven by the impact of higher net losses
year-over-year. As of December 31, 2023, GoodRx had cash and cash
equivalents of $672.3 million and total outstanding debt of $661.8
million.
GoodRx is focused on a disciplined approach to capital
allocation, centered on furthering the Company’s mission and
creating shareholder value. Our capital allocation priorities are
investing for profitable growth, paying down debt, buying back
shares, and M&A that aligns with our strategic priorities.
These capital allocation priorities support GoodRx’s long-term
growth strategy while also providing flexibility to navigate
near-term challenges.
Share Repurchases
During the fourth quarter of 2023, we repurchased $77.8 million
in shares of Class A common stock, representing approximately 14.1
million shares, under our then-current share repurchase program,
which expired on February 23, 2024. As of December 31, 2023, we had
$44.3 million of unused authorized share repurchase capacity under
our then-current share repurchase program.
On February 27, 2024, our board of directors approved a new
stock repurchase program (the “New Repurchase Program”) that
authorized the repurchase of up to $450.0 million of our Class A
common stock. Repurchases under the New Repurchase Program may be
made in the open market, in privately negotiated transactions or
otherwise, with the amount and timing of repurchases to be
determined at the Company’s discretion, depending on market
conditions and corporate needs. GoodRx may also, from time to time,
enter into trading plans intended to satisfy the affirmative
defense conditions of Rule 10b5-1(c)(1) under the Securities
Exchange Act of 1934, as amended, to facilitate repurchases under
the New Repurchase Program. Any repurchases are expected to be
funded with the Company’s existing cash and cash equivalents,
working capital, cash flows from operations, or funds available
through various borrowing arrangements. The New Repurchase Program
has no expiration date, does not obligate GoodRx to acquire any
particular amount of Class A common stock and may be modified,
suspended or terminated at any time at the discretion of our board
of directors.
Guidance
For the first quarter and full year 2024, management is
anticipating the following:
$ in millions
1Q 2024
1Q 2023
YoY Change
Revenue5
~$195-$198
$184.0
~6%-8%
Adjusted Revenue5
~$195-$198
$184.0
~6%-8%
Adjusted EBITDA Margin6
High twenty-percent range,
potentially up to 30%
$ in millions
FY 2024
FY 2023
YoY Change
Revenue5
~$800
$750.3
~7%
Adjusted Revenue5
~$800
$760.3
~5%
Adjusted EBITDA6
~$250
“We are guiding to first quarter revenue and Adjusted Revenue in
the range of about $195 million to $198 million, representing about
6% to 8% year-over-year growth, and Adjusted EBITDA Margin in the
high twenty-percent range, potentially up to 30%. Our first quarter
guide includes our current estimate of the impact of the recent
system outages disclosed by UnitedHealth Group that we believe, at
this early stage, is not reasonably likely to have a material
impact on our financials, despite the impact lasting a couple of
days,” said Karsten Voermann, Chief Financial Officer. “For the
full year 2024, we expect revenue and Adjusted Revenue to be about
$800 million, representing about 7% and 5% year-over-year growth,
respectively. These full year growth rates are tempered by the
approximately $25 million topline impact associated with our pharma
manufacturer solutions restructuring, including the
deprioritization of vitaCare, the anticipated sunset of the Kroger
Savings Club, and our continued investments in consumer incentives
which we expect will reduce revenue. We believe our Adjusted EBITDA
trajectory is continuing to ramp as we delivered Adjusted EBITDA
Margin in the high twenties over the last couple of quarters and we
expect to achieve approximately $250 million of Adjusted EBITDA for
the full year 2024.”
“Our balance sheet and liquidity position remained strong in the
fourth quarter, with a healthy cash balance that affords us
significant flexibility. We will continue to prioritize cash
conversion and disciplined capital deployment to support our
strategic priorities and accelerate value creation,” concluded
Voermann.
5
Adjusted Revenue is a non-GAAP
financial measure and is presented for supplemental informational
purposes only. We expect revenue, the most directly comparable
financial measure calculated in accordance with GAAP, to equal
Adjusted Revenue for the first quarter and full year of 2024. For
the first quarter 2023, revenue equals Adjusted Revenue. For the
full year 2023 Adjusted Revenue, refer to the Non-GAAP Financial
Measures section below for reconciliation to the most directly
comparable GAAP measure.
6
Adjusted EBITDA Margin is
Adjusted EBITDA divided by Adjusted Revenue. Adjusted EBITDA and
Adjusted EBITDA Margin are non-GAAP financial measures and are
presented for supplemental informational purposes only. We have not
reconciled our Adjusted EBITDA and Adjusted EBITDA Margin guidance
to GAAP net income or loss and GAAP net income or loss margin,
respectively, because we do not provide guidance for such GAAP
measures due to the uncertainty and potential variability of
stock-based compensation expense, acquired intangible assets and
related amortization and income taxes, which are reconciling items
between Adjusted EBITDA and Adjusted EBITDA Margin and their
respective most directly comparable GAAP measures. Because such
items cannot be provided without unreasonable efforts, we are
unable to provide a reconciliation of the non-GAAP financial
measure guidance to the corresponding GAAP measure. However, such
items could have a significant impact on our future GAAP net income
or loss and GAAP net income or loss margin.
Investor Conference Call and
Webcast
GoodRx management will host a conference call and webcast today,
February 29, 2024, at 5:00 a.m. Pacific Time (8:00 a.m. Eastern
Time) to discuss the results and the Company’s business
outlook.
To access the conference call, please pre-register using the
following link:
https://register.vevent.com/register/BIc3b837c2f5dc4943bcc1355119820c4d
Registrants will receive a confirmation with dial-in details and a
unique passcode required to join.
The call will also be webcast live on the Company’s investor
relations website at https://investors.goodrx.com, where
accompanying materials will be posted prior to the conference
call.
Approximately one hour after completion of the live call, an
archived version of the webcast will be available on the Company’s
investor relations website at https://investors.goodrx.com for at
least 30 days.
About GoodRx
GoodRx is the leading destination for prescription savings in
the U.S. We offer consumers free access to transparent and lower
prices for generic and brand medications, as well as comprehensive
healthcare research and information. We also equip healthcare
professionals with efficient ways to find and prescribe affordable
medications. Since 2011, GoodRx has helped consumers save nearly
$70 billion and is one of the most downloaded medical apps over the
past decade.
GoodRx periodically posts information that may be important to
investors on its investor relations website at
https://investors.goodrx.com. We intend to use our website as a
means of disclosing material non-public information and for
complying with our disclosure obligations under Regulation FD.
Accordingly, investors and potential investors are encouraged to
consult GoodRx’s website regularly for important information, in
addition to following GoodRx’s press releases, filings with the
Securities and Exchange Commission and public conference calls and
webcasts. The information contained on, or that may be accessed
through, GoodRx’s website is not incorporated by reference into,
and is not a part of, this press release.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including without limitation statements
regarding our future results of operations and financial position,
industry and business trends, our value proposition, our
collaborations and partnerships with third parties, including our
integrated savings programs, the anticipated sunset of the Kroger
Savings Club, the New Repurchase Program, anticipated impacts of
the de-prioritization of certain solutions under our pharma
manufacturer solutions offering and our cost savings initiatives,
our direct contracting approach with retailers, realizability of
deferred tax assets, expected impact of recent outages disclosed by
UnitedHealth Group, business strategy, cash conversion and capital
deployment, our plans, market opportunity and growth and our
objectives for future operations. These statements are neither
promises nor guarantees, but involve known and unknown risks,
uncertainties and other important factors that may cause our actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements, including, but not
limited to, risks related to our limited operating history and
early stage of growth; our ability to achieve broad market
education and change consumer purchasing habits; our general
ability to continue to attract, acquire and retain consumers in a
cost-effective manner; our reliance on our prescription
transactions offering and ability to expand our offerings; changes
in medication pricing and pricing structures; our general inability
to control the categories and types of prescriptions for which we
can offer savings or discounted prices; our reliance on a limited
number of industry participants, including pharmacy benefit
managers, pharmacies, and pharma manufacturers; the competitive
nature of industry; risks related to pandemics, epidemics or
outbreak of infectious disease, such as COVID-19; the accuracy of
our estimate of our total addressable market and other operational
metrics; our ability to respond to changes in the market for
prescription pricing and to maintain and expand the use of GoodRx
codes; our ability to maintain positive perception of our platform
and brand; risks related to any failure to maintain effective
internal control over financial reporting; risks related to use of
social media, emails, text messages and other messaging channels as
part of our marketing strategy; our dependence on our information
technology systems and those of our third-party vendors, and risks
related to any failure or significant disruptions thereof; risks
related to government regulation of the internet, e-commerce,
consumer data and privacy, information technology and
cybersecurity; risks related to a decrease in consumer willingness
to receive correspondence or any technical, legal or any other
restrictions to send such correspondence; risks related to any
failure to comply with applicable data protection, privacy and
security, advertising and consumer protection laws, standards, and
other requirements; our ability to utilize our net operating loss
carryforwards and certain other tax attributes; the risk that we
may not achieve the intended outcomes of our restructuring and cost
reduction efforts; our ability to attract, develop, motivate and
retain well-qualified employees; risks related to our acquisition
strategy; risks related to our debt arrangements; interruptions or
delays in service on our apps or websites; our reliance on
third-party platforms to distribute our platform and offerings,
including software as-a-service technologies; systems failures or
other disruptions in the operations of these parties on which we
depend; risks related to climate change; the increasing focus on
environmental sustainability and social initiatives; risks related
to our intellectual property; risks related to operating in the
healthcare industry; risks related to our organizational structure;
litigation related risks; our ability to accurately forecast
revenue and appropriately plan our expenses in the future; risks
related to general economic factors, natural disasters or other
unexpected events; risks related to fluctuations in our tax
obligations and effective income tax rate which could materially
and adversely affect our results of operations; risks related to
the recent healthcare reform legislation and other changes in the
healthcare industry and in healthcare spending which may adversely
affect our business, financial condition and results of operations;
as well as the other important factors discussed in the section
entitled “Risk Factors” of our Annual Report on Form 10-K for the
fiscal year ended December 31, 2023 and in our other filings with
the Securities and Exchange Commission. The forward-looking
statements in this press release are based upon information
available to us as of the date of this press release, and while we
believe such information forms a reasonable basis for such
statements, such information may be limited or incomplete, and our
statements should not be read to indicate that we have conducted an
exhaustive inquiry into, or review of, all potentially available
relevant information. These statements are inherently uncertain and
investors are cautioned not to unduly rely upon these statements.
While we may elect to update such forward-looking statements at
some point in the future, we disclaim any obligation to do so, even
if subsequent events cause our views to change.
Key Operating Metrics
Monthly Active Consumers (MACs) refers to the number of unique
consumers who have used a GoodRx code to purchase a prescription
medication in a given calendar month and have saved money compared
to the list price of the medication. A unique consumer who uses a
GoodRx code more than once in a calendar month to purchase
prescription medications is only counted as one Monthly Active
Consumer in that month. A unique consumer who uses a GoodRx code in
two or three calendar months within a quarter will be counted as a
Monthly Active Consumer in each such month. Monthly Active
Consumers do not include subscribers to our subscription offerings,
consumers of our pharma manufacturer solutions offering, or
consumers who use our telehealth offerings. When presented for a
period longer than a month, Monthly Active Consumers are averaged
over the number of calendar months in such period. Monthly Active
Consumers from acquired companies are only included beginning in
the first full quarter following the acquisition.
Subscription plans represent the ending subscription plan
balance across both of our subscription offerings, GoodRx Gold and
Kroger Savings Club. Each subscription plan may represent more than
one subscriber since family subscription plans may include multiple
members.
We exited the fourth quarter of 2023 with over 7 million
prescription-related consumers that used GoodRx across our
prescription transactions and subscription offerings. Our
prescription-related consumers represent the sum of Monthly Active
Consumers for the three months ended December 31, 2023 and
subscribers to our subscription plans as of December 31, 2023.
Three Months Ended
(in millions)
December 31,
2023
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
September 30,
2022
June 30, 2022
March 31, 2022
Monthly Active Consumers
6.4
6.1
6.1
6.1
5.9
5.8
5.8
6.4
As of
(in thousands)
December 31,
2023
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
September 30,
2022
June 30, 2022
March 31, 2022
Subscription plans
884
930
969
1,007
1,030
1,060
1,133
1,203
GoodRx Holdings, Inc.
Condensed Consolidated Balance
Sheets (Unaudited)
(in thousands, except par
values)
December 31, 2023
December 31, 2022
Assets
Current assets
Cash and cash equivalents
$
672,296
$
757,165
Accounts receivable, net
143,608
117,141
Prepaid expenses and other current
assets
56,886
45,380
Total current assets
872,790
919,686
Property and equipment, net
15,932
19,820
Goodwill
410,769
412,117
Intangible assets, net
60,898
119,865
Capitalized software, net
95,439
70,072
Operating lease right-of-use assets,
net
29,929
35,906
Deferred tax assets, net
65,268
—
Other assets
37,775
27,165
Total assets
$
1,588,800
$
1,604,631
Liabilities and stockholders'
equity
Current liabilities
Accounts payable
$
36,266
$
17,700
Accrued expenses and other current
liabilities
71,329
47,523
Current portion of debt
8,787
7,029
Operating lease liabilities, current
6,177
4,068
Total current liabilities
122,559
76,320
Debt, net
647,703
651,796
Operating lease liabilities, net of
current portion
48,403
54,131
Other liabilities
8,177
7,557
Total liabilities
826,842
789,804
Stockholders' equity
Preferred stock, $0.0001 par value
—
—
Common stock, $0.0001 par value
40
40
Additional paid-in capital
2,219,321
2,263,322
Accumulated deficit
(1,457,403
)
(1,448,535
)
Total stockholders' equity
761,958
814,827
Total liabilities and stockholders'
equity
$
1,588,800
$
1,604,631
GoodRx Holdings, Inc.
Condensed Consolidated Statements of
Operations (Unaudited)
(in thousands, except per share
amounts)
Three Months Ended
December 31,
Year Ended December
31,
2023
2022
2023
2022
Revenue
$
196,644
$
184,109
$
750,265
$
766,554
Costs and operating expenses:
Cost of revenue, exclusive of depreciation
and amortization presented separately below
15,170
17,360
66,925
65,079
Product development and technology
32,032
36,770
135,836
143,137
Sales and marketing
93,751
84,128
341,328
357,631
General and administrative
30,371
28,581
125,515
144,792
Depreciation and amortization
43,608
15,533
107,668
54,177
Total costs and operating expenses
214,932
182,372
777,272
764,816
Operating (loss) income
(18,288
)
1,737
(27,007
)
1,738
Other expense, net:
Other expense
—
—
(4,008
)
—
Interest income
8,474
5,445
32,171
9,274
Interest expense
(14,821
)
(11,927
)
(56,728
)
(34,243
)
Total other expense, net
(6,347
)
(6,482
)
(28,565
)
(24,969
)
Loss before income taxes
(24,635
)
(4,745
)
(55,572
)
(23,231
)
Income tax (expense) benefit
(1,234
)
2,773
46,704
(9,597
)
Net loss
$
(25,869
)
$
(1,972
)
$
(8,868
)
$
(32,828
)
Loss per share:
Basic and diluted
$
(0.06
)
$
(0.00
)
$
(0.02
)
$
(0.08
)
Weighted average shares used in
computing loss per share:
Basic and diluted
403,248
411,683
410,315
412,858
Stock-based compensation included in
costs and operating expenses:
Cost of revenue
$
123
$
169
$
610
$
359
Product development and technology
7,144
9,863
30,096
35,190
Sales and marketing
8,646
5,037
20,311
21,036
General and administrative
12,865
14,345
53,803
63,649
GoodRx Holdings, Inc.
Condensed Consolidated Statements of
Cash Flows (Unaudited)
(in thousands)
Year Ended December
31,
2023
2022
Cash flows from operating
activities
Net loss
$
(8,868
)
$
(32,828
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
107,668
54,177
Amortization of debt issuance costs
3,382
3,413
Non-cash operating lease expense
4,104
3,349
Stock-based compensation expense
104,820
120,234
Change in fair value of contingent
consideration
—
18,057
Deferred income taxes
(65,562
)
(497
)
Gain on sale of business
—
(11,404
)
Loss on operating lease assets
1,353
12,569
Loss on disposal of capitalized
software
7,975
—
Loss on minority equity interest
investment
4,008
—
Other
1,348
—
Changes in operating assets and
liabilities, net of effects of business acquisitions
Accounts receivable
(26,467
)
1,375
Prepaid expenses and other assets
(32,162
)
(13,644
)
Accounts payable
17,456
(874
)
Accrued expenses and other current
liabilities
21,253
(5,268
)
Operating lease liabilities
(2,930
)
(4,004
)
Other liabilities
914
2,125
Net cash provided by operating
activities
138,292
146,780
Cash flows from investing
activities
Purchase of property and equipment
(1,043
)
(3,967
)
Acquisitions, net of cash acquired
—
(156,853
)
Capitalized software
(54,723
)
(51,247
)
Investment in minority equity interest
—
(15,007
)
Proceeds from sale of business
—
16,576
Net cash used in investing activities
(55,766
)
(210,498
)
Cash flows from financing
activities
Payments on long-term debt
(5,271
)
(7,029
)
Repurchases of Class A common stock
(103,974
)
(101,721
)
Proceeds from exercise of stock
options
5,941
9,159
Employee taxes paid related to net share
settlement of equity awards
(65,481
)
(20,635
)
Proceeds from employee stock purchase
plan
1,390
—
Net cash used in financing activities
(167,395
)
(120,226
)
Net change in cash and cash
equivalents
(84,869
)
(183,944
)
Cash and cash equivalents
Beginning of period
757,165
941,109
End of period
$
672,296
$
757,165
Non-GAAP Financial Measures
Adjusted Revenue, Adjusted EBITDA, Adjusted EBITDA Margin,
Adjusted Net Income, Adjusted Net Income Margin and Adjusted
Earnings Per Share are supplemental measures of our performance
that are not required by, or presented in accordance with, U.S.
GAAP. We also present each cost and operating expense on our
condensed consolidated statements of operations on an adjusted
basis to arrive at adjusted operating income. Collectively, we
refer to these non-GAAP financial measures as our “Non-GAAP
Measures."
We define Adjusted Revenue for a particular period as revenue
excluding client contract termination costs associated with
restructuring related activities. We exclude these costs from
revenue because we believe they are not indicative of past or
future underlying performance of the business.
We define Adjusted EBITDA for a particular period as net income
or loss before interest, taxes, depreciation and amortization, and
as further adjusted for, as applicable for the periods presented,
acquisition related expenses, stock-based compensation expense,
payroll tax expense related to stock-based compensation, loss on
extinguishment of debt, financing related expenses, loss on
operating lease assets, restructuring related expenses, legal
settlement expenses, charitable stock donation, gain on sale of
business, and other income or expense, net. Adjusted EBITDA Margin
represents Adjusted EBITDA as a percentage of Adjusted Revenue.
We define Adjusted Net Income for a particular period as net
income or loss adjusted for, as applicable for the periods
presented, amortization of intangibles related to acquisitions and
restructuring activities, acquisition related expenses, stock-based
compensation expense, payroll tax expense related to stock-based
compensation, loss on extinguishment of debt, financing related
expenses, loss on operating lease assets, restructuring related
expenses, legal settlement expenses, charitable stock donation,
gain on sale of business, other expense, and as further adjusted
for estimated income tax on such adjusted items. Our adjusted taxes
also excludes (i) the valuation allowance recorded against certain
of our net deferred tax assets that was recognized in accordance
with GAAP and any subsequent releases of the valuation allowance,
and (ii) all tax benefits/expenses resulting from excess tax
benefits/deficiencies in connection with stock-based compensation.
Adjusted Net Income Margin represents Adjusted Net Income as a
percentage of Adjusted Revenue.
Adjusted Earnings Per Share is Adjusted Net Income attributable
to common stockholders divided by weighted average number of
shares. The weighted average shares we use in computing Adjusted
Earnings Per Share – basic is equal to our GAAP weighted average
shares – basic and the weighted average shares we use in computing
Adjusted Earnings Per Share – diluted is equal to either GAAP
weighted average shares – basic or GAAP weighted average shares –
diluted, depending on whether we have adjusted net loss or adjusted
net income, respectively.
We also assess our performance by evaluating each cost and
operating expense on our condensed consolidated statements of
operations on a non-GAAP, or adjusted, basis to arrive at adjusted
operating income. The adjustments to these cost and operating
expense items include, as applicable for the periods presented,
acquisition related expenses, amortization of intangibles related
to acquisitions and restructuring activities, stock-based
compensation expense, payroll tax expense related to stock-based
compensation, loss on extinguishment of debt, financing related
expenses, restructuring related expenses, legal settlement
expenses, loss on operating lease assets, charitable stock
donation, other expense, and gain on sale of business. Adjusted
operating income is Adjusted Revenue less non-GAAP costs and
operating expenses.
We believe our Non-GAAP Measures are helpful to investors,
analysts and other interested parties because they assist in
providing a more consistent and comparable overview of our
operations across our historical financial periods. Adjusted
Revenue, Adjusted EBITDA and Adjusted EBITDA Margin are also key
measures we use to assess our financial performance and are also
used for internal planning and forecasting purposes. In addition,
Adjusted Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted
Net Income and Adjusted Earnings Per Share are frequently used by
analysts, investors and other interested parties to evaluate and
assess performance.
The Non-GAAP Measures are presented for supplemental
informational purposes only and should not be considered as
alternatives or substitutes to financial information presented in
accordance with GAAP. These measures have certain limitations in
that they do not include the impact of certain expenses that are
reflected in our condensed consolidated statements of operations
that are necessary to run our business. Other companies, including
other companies in our industry, may not use these measures or may
calculate these measures differently than as presented herein,
limiting their usefulness as comparative measures.
The following table presents a reconciliation of net loss and
revenue, the most directly comparable financial measures calculated
in accordance with GAAP, to Adjusted EBITDA and Adjusted Revenue,
respectively, and presents net loss margin, the most directly
comparable financial measure calculated in accordance with GAAP,
with Adjusted EBITDA Margin:
(dollars in thousands)
Three Months Ended
December 31,
Year Ended December
31,
(dollars in thousands)
2023
2022
2023
2022
Net loss
$
(25,869
)
$
(1,972
)
$
(8,868
)
$
(32,828
)
Adjusted to exclude the following:
Interest income
(8,474
)
(5,445
)
(32,171
)
(9,274
)
Interest expense
14,821
11,927
56,728
34,243
Income tax expense (benefit)
1,234
(2,773
)
(46,704
)
9,597
Depreciation and amortization
43,608
15,533
107,668
54,177
Other expense
—
—
4,008
—
Financing related expenses
—
6
—
20
Acquisition related expenses
174
2,856
1,777
26,486
Restructuring related expenses
4,634
37
27,023
6,273
Legal settlement expenses
(2,900
)
(1,300
)
100
1,500
Stock-based compensation expense
28,778
29,414
104,820
120,234
Payroll tax expense related to stock-based
compensation
268
143
1,693
1,882
Loss on operating lease assets
979
12,569
1,353
12,569
Gain on sale of business
—
(11,404
)
—
(11,404
)
Adjusted EBITDA
$
57,253
$
49,591
$
217,427
$
213,475
Revenue
$
196,644
$
184,109
$
750,265
$
766,554
Adjusted to exclude the following:
Client contract termination costs
—
—
10,000
—
Adjusted Revenue
$
196,644
$
184,109
$
760,265
$
766,554
Net loss margin (1)
(13.2
%)
(1.1
%)
(1.2
%)
(4.3
%)
Adjusted EBITDA Margin (2)
29.1
%
26.9
%
28.6
%
27.8
%
________________________________________________________________
(1)
Net loss margin represents net loss as a
percentage of revenue.
(2)
Adjusted EBITDA Margin represents Adjusted
EBITDA as a percentage of Adjusted Revenue.
The following tables present a reconciliation of net loss and
revenue and calculations of net loss margin and loss per share, the
most directly comparable financial measures calculated in
accordance with GAAP, to Adjusted Net Income, Adjusted Revenue,
Adjusted Net Income Margin, and Adjusted Earnings Per Share,
respectively:
(dollars in thousands, except per
share amounts)
Three Months Ended
December 31,
Year Ended December
31,
2023
2022
2023
2022
Net loss
$
(25,869
)
$
(1,972
)
$
(8,868
)
$
(32,828
)
Adjusted to exclude the following:
Amortization of intangibles related to
acquisitions and restructuring activities
32,037
5,674
64,806
23,200
Other expense
—
—
4,008
—
Financing related expenses
—
6
—
20
Acquisition related expenses
174
2,856
1,777
26,486
Restructuring related expenses
4,634
37
27,023
6,273
Legal settlement expenses
(2,900
)
(1,300
)
100
1,500
Stock-based compensation expense
28,778
29,414
104,820
120,234
Payroll tax expense related to stock-based
compensation
268
143
1,693
1,882
Loss on operating lease assets
979
12,569
1,353
12,569
Gain on sale of business
—
(11,404
)
—
(11,404
)
Income tax benefit on excluded items and
adjusting for valuation allowance and excess tax
benefits/deficiencies on stock-based compensation exercises
(6,966
)
(8,648
)
(82,134
)
(22,108
)
Adjusted Net Income
$
31,135
$
27,375
$
114,578
$
125,824
Revenue
$
196,644
$
184,109
$
750,265
$
766,554
Adjusted to exclude the following:
Client contract termination costs
—
—
10,000
—
Adjusted Revenue
$
196,644
$
184,109
$
760,265
$
766,554
Net loss margin (1)
(13.2
%)
(1.1
%)
(1.2
%)
(4.3
%)
Adjusted Net Income Margin (2)
15.8
%
14.9
%
15.1
%
16.4
%
Weighted average shares used in
computing loss per share:
Basic and diluted
403,248
411,683
410,315
412,858
Loss per share:
Basic and diluted
$
(0.06
)
$
(0.00
)
$
(0.02
)
$
(0.08
)
Weighted average shares used in
computing Adjusted Earnings Per Share:
Basic
403,248
411,683
410,315
412,858
Diluted
407,109
413,275
414,095
418,588
Adjusted Earnings Per Share:
Basic
$
0.08
$
0.07
$
0.28
$
0.30
Diluted
$
0.08
$
0.07
$
0.28
$
0.30
________________________________________________________________
(1)
Net loss margin represents net loss as a
percentage of revenue.
(2)
Adjusted Net Income Margin represents
Adjusted Net Income as a percentage of Adjusted Revenue.
The following table presents (i) each non-GAAP, or adjusted,
cost and expense and operating income measure together with its
most directly comparable financial measure calculated in accordance
with GAAP; and (ii) each adjusted cost and expense and adjusted
operating income as a percentage of Adjusted Revenue together with
each GAAP cost and expense and operating (loss) income as a
percentage of revenue, the most directly comparable financial
measure calculated in accordance with GAAP:
(dollars in thousands)
GAAP
Adjusted
GAAP
Adjusted
Three Months Ended
December 31,
Three Months Ended
December 31,
Year Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
2023
2022
2023
2022
Cost of revenue
$
15,170
$
17,360
$
13,771
$
16,983
$
66,925
$
65,079
$
62,136
$
64,258
% of Revenue (GAAP) /
Adjusted Revenue (Adjusted)
8
%
9
%
7
%
9
%
9
%
8
%
8
%
8
%
Product development and technology
$
32,032
$
36,770
$
24,238
$
26,335
$
135,836
$
143,137
$
95,664
$
102,706
% of Revenue (GAAP) /
Adjusted Revenue (Adjusted)
16
%
20
%
12
%
14
%
18
%
19
%
13
%
13
%
Sales and marketing
$
93,751
$
84,128
$
83,797
$
78,881
$
341,328
$
357,631
$
318,603
$
331,525
% of Revenue (GAAP) /
Adjusted Revenue (Adjusted)
48
%
46
%
43
%
43
%
45
%
47
%
42
%
43
%
General and administrative (1)
$
30,371
$
28,581
$
17,585
$
12,319
$
125,515
$
144,792
$
66,435
$
54,590
% of Revenue (GAAP) /
Adjusted Revenue (Adjusted)
15
%
16
%
9
%
7
%
17
%
19
%
9
%
7
%
Depreciation and amortization
$
43,608
$
15,533
$
11,571
$
9,859
$
107,668
$
54,177
$
42,862
$
30,977
% of Revenue (GAAP) /
Adjusted Revenue (Adjusted)
22
%
8
%
6
%
5
%
14
%
7
%
6
%
4
%
Operating (loss) income (1) (2)
$
(18,288
)
$
1,737
$
45,682
$
39,732
$
(27,007
)
$
1,738
$
174,565
$
182,498
% of Revenue (GAAP) /
Adjusted Revenue (Adjusted)
(9
%)
1
%
23
%
22
%
(4
%)
0
%
23
%
24
%
________________________________________________________________
(1)
Our financial results for the
first quarter of 2023 as previously announced in our press release
furnished as an exhibit to our Current Report on Form 8-K dated May
10, 2023 erroneously included an adjustment for “Other expense” of
$1.8 million in “Adjusted general & administrative expenses”
and “Adjusted operating income.” The error has been corrected by
revising the amounts for the affected line items for the year ended
December 31, 2023 in the table above.
(2)
Adjusted operating income
represents Adjusted Revenue less non-GAAP costs and operating
expenses.
The following table presents a reconciliation of each non-GAAP,
or adjusted, revenue, cost and expense and operating income measure
to its most directly comparable financial measure calculated in
accordance with GAAP:
(dollars in thousands)
Three Months Ended
December 31,
Year Ended December
31,
2023
2022
2023
2022
Revenue
$
196,644
$
184,109
$
750,265
$
766,554
Restructuring related expenses (1)
—
—
10,000
—
Adjusted Revenue (1)
$
196,644
$
184,109
$
760,265
$
766,554
Cost of revenue
$
15,170
$
17,360
$
66,925
$
65,079
Restructuring related expenses
(1,272
)
(207
)
(4,150
)
(444
)
Stock-based compensation expense
(123
)
(169
)
(610
)
(359
)
Payroll tax expense related to stock-based
compensation
(4
)
(1
)
(29
)
(18
)
Adjusted cost of revenue
$
13,771
$
16,983
$
62,136
$
64,258
Product development and technology
$
32,032
$
36,770
$
135,836
$
143,137
Acquisition related expenses
(26
)
(540
)
(329
)
(1,416
)
Restructuring related expenses
(524
)
26
(8,927
)
(2,840
)
Stock-based compensation expense
(7,144
)
(9,863
)
(30,096
)
(35,190
)
Payroll tax expense related to stock-based
compensation
(100
)
(58
)
(820
)
(985
)
Adjusted product development and
technology
$
24,238
$
26,335
$
95,664
$
102,706
Sales and marketing
$
93,751
$
84,128
$
341,328
$
357,631
Acquisition related expenses
—
(185
)
—
(2,064
)
Restructuring related expenses
(1,240
)
—
(2,078
)
(2,679
)
Stock-based compensation expense
(8,646
)
(5,037
)
(20,311
)
(21,036
)
Payroll tax expense related to stock-based
compensation
(68
)
(25
)
(336
)
(327
)
Adjusted sales and marketing
$
83,797
$
78,881
$
318,603
$
331,525
General and administrative
$
30,371
$
28,581
$
125,515
$
144,792
Financing related expenses
—
(6
)
—
(20
)
Acquisition related expenses
(148
)
(2,131
)
(1,448
)
(23,006
)
Restructuring related expenses
(1,598
)
144
(1,868
)
(310
)
Legal settlement expenses
2,900
1,300
(100
)
(1,500
)
Stock-based compensation expense
(12,865
)
(14,345
)
(53,803
)
(63,649
)
Payroll tax expense related to stock-based
compensation
(96
)
(59
)
(508
)
(552
)
Loss on operating lease assets
(979
)
(12,569
)
(1,353
)
(12,569
)
Gain on sale of business
—
11,404
—
11,404
Adjusted general and administrative
(2)
$
17,585
$
12,319
$
66,435
$
54,590
Depreciation and amortization
$
43,608
$
15,533
$
107,668
$
54,177
Amortization of intangibles related to
acquisitions and restructuring activities
(32,037
)
(5,674
)
(64,806
)
(23,200
)
Adjusted depreciation and amortization
$
11,571
$
9,859
$
42,862
$
30,977
Operating (loss) income
$
(18,288
)
$
1,737
$
(27,007
)
$
1,738
Amortization of intangibles related to
acquisitions and restructuring activities
32,037
5,674
64,806
23,200
Financing related expenses
—
6
—
20
Acquisition related expenses
174
2,856
1,777
26,486
Restructuring related expenses
4,634
37
27,023
6,273
Legal settlement expenses
(2,900
)
(1,300
)
100
1,500
Stock-based compensation expense
28,778
29,414
104,820
120,234
Payroll tax expense related to stock-based
compensation
268
143
1,693
1,882
Loss on operating lease assets
979
12,569
1,353
12,569
Gain on sale of business
—
(11,404
)
—
(11,404
)
Adjusted operating income (2)
$
45,682
$
39,732
$
174,565
$
182,498
________________________________________________________________
(1)
We define Adjusted Revenue for a
particular period as revenue excluding client contract termination
costs associated with the restructuring related activities. The
restructuring related expenses adjustment to revenue herein for the
year ended December 31, 2023 represents the $10.0 million contract
termination payment to a pharma manufacturer solutions client in
connection with the Restructuring Plan.
(2)
Our financial results for the
first quarter of 2023 as previously announced in our press release
furnished as an exhibit to our Current Report on Form 8-K dated May
10, 2023 erroneously included an adjustment for “Other expense” of
$1.8 million in “Adjusted general & administrative expenses”
and “Adjusted operating income.” The error has been corrected by
revising the amounts for the affected line items for the year ended
December 31, 2023 in the table above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240229607736/en/
Investor Contact GoodRx Whitney Notaro
wnotaro@goodrx.com
Press Contact GoodRx Lauren Casparis
lcasparis@goodrx.com
GoodRx (NASDAQ:GDRX)
Historical Stock Chart
From Apr 2024 to May 2024
GoodRx (NASDAQ:GDRX)
Historical Stock Chart
From May 2023 to May 2024