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spk05: Ladies and gentlemen, thank you for standing by, and welcome to the GoodRx fourth quarter and full year 2020 earnings call. As a reminder, today's conference is being recorded. I would now like to introduce your host for today's call, Whitney Notaro, Vice President of Investor Relations. Ms. Notaro, you may begin.
spk11: Thank you, Operator. Good afternoon, everyone, and welcome to GoodRx's earnings conference call for the fourth quarter and full year 2020. Joining me today are Doug Hirsch and Trevor Bezdek, our co-founders and co-chief executive officers, and Karsten Vorman, our chief financial officer. Before we begin, I'd like to remind everyone that this call will contain forward-looking statements. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding management's plans, strategies, goals and objectives, our market opportunity, our anticipated financial performance, and the expected impact of COVID-19 on our business. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties, and other important factors. These factors 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. Factors discussed in the risk factors section of our annual report on Form 10-K for the year end of December 31st and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made on this call. Any such forward-looking statements represent management's estimates as of the date of this call, and we disclaim any obligation to update these statements, even if subsequent events cause our views to change. In addition, we may also reference certain non-GAAP metrics, which are reconciled to the nearest GAAP metric in the company's shareholder letter, which can be found on the overview page of our investor relations website at investors.gooderx.com. I'd also like to remind everyone that a replay of this call will become available there shortly as well. With that, I'll turn the call over to Doug.
spk03: Thank you, Whitney, and thanks to all of you for joining us this afternoon. GoodRx's mission to help Americans has never been more important. Over the past year, the COVID-19 pandemic hobbled and overwhelmed our nation's health care system. More than 65% of Americans were financially impacted by the pandemic, forcing more than one in three patients to skip treatment or medications. Over 150 million people sacrificed basic needs to find healthcare or sacrificed their healthcare to meet basic needs. Either way, these kinds of sacrifices have serious, long-lasting consequences for both individuals and our nation. GoodRx has always been laser-focused in providing Americans with access to the care they need at a price they can afford. As the crisis unfolded, we rallied to help. During the pandemic, GoodRx launched a host of new products and initiatives that delivered relief to Americans in need. We doubled down on new, affordable telemedicine services, delivered prescriptions directly to homes, and created more savings opportunities for prescriptions, medical care, labs, and other healthcare services. Doing well by doing good has always been our mantra. Our efforts to help Americans significantly grew our business. We delivered strong performance in 2020 with fast growth at attractive margins and reached new milestones, including over $25 billion of cumulative consumer savings in our prescriptions transactions offering alone, a record number of monthly active consumers, and a 2X increase of subscribers on our platform. In addition to these exciting business milestones, we donated approximately 1.1 million shares valued at over $40 million to GoodRx Helps in the fourth quarter, following through on the commitment we made at the time of our IPO. GoodRx Helps is our charitable initiative to help provide care to people who simply have nowhere else to turn. We've also been focused on diversity, equity, and inclusion within GoodRx as we recognize the importance of reflecting the diversity of our consumers within our own organization. I'm proud to report that in just six months, we have tripled the number of women in leadership positions and prioritized diversity in our recruiting. Today, close to half of our team identifies as people of color. We could not be more proud of the effort and dedication of our team as we continue to build the leading consumer-focused digital healthcare platform. We reach more consumers than ever with an improved and simplified user experience, but we have just scratched the surface of the massive opportunity ahead. We believe that there will be lasting changes to the way Americans find and receive healthcare after the pandemic. Millions of people have embraced telemedicine and home delivery. Millions more are turning to the Internet to learn about their care and the choices available to them. Across the healthcare ecosystem, long-hidden information is flowing more freely, and patients are being empowered to own their healthcare journey. GooderX intends to play a leadership role in post-pandemic healthcare, helping Americans reengage with physicians in care to seek help for chronic and new health challenges. There will likely be a substantial backlog of undiagnosed conditions and neglected preventative care. and we will be there to meet our consumers wherever they need help. We see 2021 as a massive opportunity to bring more value to our consumers at each stage of their healthcare journey. We remain intently focused on continuing to strengthen our brand and broaden our reach, taking our content and insights to the next level, and investing in our platform to launch new products and services. Much has changed over the past year, but one constant remains, our mission to help Americans get the healthcare they need at a price they can afford, and it has never been more relevant. With that, I'll turn it over to Trevor to address key highlights from the quarter and trends in our business.
spk07: Thank you, Doug. GoodRx continues our consistent expansion with another year of strong performance in 2020 with 42% year-over-year revenue growth at an attractive 37% adjusted EBITDA margin. In the fourth quarter, we attracted millions of visitors to our platform, growing the number of consumers we serve across all of our offerings, and continuing to scale our subscription manufacturer solutions and telehealth offerings. Total revenue for the quarter grew 36% year-over-year to a record $153.5 million, with prescription transactions revenue growing 26%, even with headwinds from COVID-19 and a weak cold and flu season. Other revenue grew 153% year-over-year, reflecting the continued rapid growth of our other offerings. Our strong performance highlights the value we continue to provide to both consumers and key stakeholders across the healthcare ecosystem. Our expanding suite of offerings provides a broad range of services to consumers throughout their healthcare journey, and our deep brand-building investments are accelerating consumers' understanding of how we help. During the quarter, we helped a record 5.6 million monthly active consumers save on their prescriptions by using GoodRx at one of our 70,000 participating pharmacies. Many consumers also became subscribers, either after saving money through our prescription transactions offering or during their first interaction with us. We more than doubled the number of our subscribers during 2020, finishing the year with approximately 800,000 across our two subscription programs, GoodRx Gold and the Kroger Rx Savings Club powered by GoodRx. These paid subscription programs provide consumers access to even lower prices of participating pharmacies while generating greater lifetime value for us. The growth in our subscribers was fueled by further optimizations around platform integration and user experience, which drove more effective consumer acquisition and conversion. The new benefits added to GoodRx Gold this year were another driving force behind the subscriber growth. After adding prescription mail order benefits to Gold in the third quarter, we continued to expand the program's benefits in the fourth quarter to include exclusive discounts on online doctor visits through the GoodRx app. During the year, we also closed a multi-year partnership extension with Kroger, the largest grocery chain in the U.S., which offers consumers access to lower prescription prices at Kroger pharmacies. We remain focused on creating more value for our monthly active consumers, subscribers, and the millions of visitors who use GoodRx, and continue to collaborate with our pharmacy and PBM partners to find more opportunities to do so. The growth in both our prescription transactions and subscriptions offerings was achieved through despite headwinds from COVID-19 and a weak cold and flu season. As we look ahead, we believe we are very well positioned to capitalize on the rebound in doctor visits and new therapy starts once healthcare activity normalizes and consumers resume typical healthcare purchases. During the fourth quarter, we continue to expand our telehealth services, both in depth and breadth, while remaining highly scalable. Hey Doctor by GoodRx, which we are rebranding as GoodRx Care, now offers over 35 common primary care services available nationwide, including eczema, headache, and migraine and hypertension. We introduced a new refill visit protocol covering over 1,000 medications, which addresses the needs of many of our consumers for short-term medication renewals. As monthly consumer demand continued to increase, our median turnaround times remained consistent, demonstrating our ability to scale our custom electronic health record technology and provider network. We also introduced technology that can automatically navigate consumers to the most appropriate telemedicine options, including partners in our marketplace. Our telehealth offering, which includes GoodRx Care and our telehealth marketplace, covers over 150 conditions and adds a secondary entry point for consumers to access our platform. Finally, our manufacturer's solutions offering continues to grow at an incredible rate. During 2020, we grew revenue by approximately 4x, we had record bookings in the fourth quarter, we continued to increase the number of our manufacturer partners, and our client renewal rate exceeded 90% from 2020 to 2021. This offering continues to grow quickly given the pool of high-intent, purchase-ready consumers on our platform and our strong relationships with a wide network of providers. Manufacturers spend $30 billion annually on advertising to attract patients to their brands, whether they go direct-to-consumer or through providers. GoodRx offers a much more targeted and efficient way for them to do both. On the consumer front, 20% of the searches on our platform are for brand medications, and many consumers already have a prescription in hand. We also have extensive reach and satisfaction with providers, with 2 million prescribers in the U.S. having a patient that has used GoodRx and an extremely high provider NPS of 86. We offer manufacturers both traditional advertising solutions as well as more customized, innovative products. whether direct to consumer or through digital and in-office channels to reach healthcare professionals. We are seeing demand for our full product suite to help consumers start and stand their therapy and to inform healthcare professionals of new offerings. Manufacturer Solutions provides us with a high contribution, since there is typically no incremental consumer acquisition cost, given we already have over 18 million monthly visitors to our platform and have ample inventories. GoodRx is pioneering the transformation of healthcare. We remain focused on increasing our reach, strengthening our relationship with consumers, and continuing to build the trusted brand to guide individuals through their healthcare journey. Looking ahead, we see many opportunities to further disrupt the industry with new products that make healthcare more affordable and convenient for more Americans. In 2021, we continue to be focused on increasing our reach and awareness since about 70% of consumers still are not aware that prescription drug prices vary between pharmacies. In addition to investments in marketing, we are doubling down on our research and content efforts, as we believe the right content and insights further empowers consumers, increases engagement, drives consumer acquisition, and propels even faster growth in our manufacturer solutions offering. We also recently launched new Spanish language options to facilitate the GoodRx experience for the Spanish-speaking community. Increasing reach can also be achieved through the expansion of our offerings and new features. In the year ahead, we'll continue to work on exciting, innovative products at the intersection of healthcare and technology so we can help Americans fill additional gaps when it comes to their healthcare needs. We also see exciting opportunities to better engage with consumers who already use GoodRx through both upselling and cross-selling. We can upsell by converting monthly active consumers to subscribers and cross-sell between our prescriptions and telehealth offerings as we continue to integrate GoodRx care and provide more value to our consumers. Over the last few months, we've already begun to reap the benefits of better integration of telehealth into our platform, including the increased attach rate of our telemedicine service to those using GoodRx to fill a prescription. For manufacturer solutions, we're continuing to add new partners and offer manufacturers more innovative solutions. We're working on a significant multi-brand partnership with a leading manufacturer, which we hope to formally announce soon. On the product front, we are particularly excited about working with our partners to get consumers from a doctor visit to medication in hand in the smoothest, fastest way possible. We believe our 90% partnership renewal rate, record bookings in the fourth quarter, and the addition of very strong talent to our sales team position us for significant year-over-year growth in 2021. Overall, we are very pleased with our fourth quarter and the full-year results, the growth of our offerings, and the continued progress we're making to deliver more value to consumers throughout their healthcare journey. With every transaction, the GoodRx network continues to strengthen. Our leading platform and trusted brand allows us to reach more and more consumers. This increased volume drives improved pricing and consumer savings, strengthening engagement and further improving already great user economics. This allows us to continue to expand our platform and enhance our products, further strengthening this hard-to-replicate virtuous cycle that we have and in creating an even deeper competitive moat. We believe the years ahead present an exciting opportunity to reach even more consumers through both our existing offerings and the launch of new services to further disrupt healthcare and improve affordability and access for all Americans. And with that, I'll turn it over to Karsten to discuss our financial results and guidance.
spk06: Thank you, Trevor. Good afternoon, everyone, and thank you for joining us today. Our fourth quarter results once again highlight the unique combination of scale, growth and profitability our business provides, strong unit economics, the large market in which we operate, and our ability to execute and generate strong operating cash flow. Revenue for the quarter was $153.5 million, growing 36% year over year, driven by continued growth in our prescription offering as well as our newer offerings. Prescription transactions revenue grew 26% year over year, to $131.3 million, driven by a 32% year-over-year increase in our monthly active consumers. As a reminder, monthly active consumers represent the number of unique consumers who use GoodRx to save on their prescription in a given month, and it does not include consumers of our other offerings, such as subscriptions, manufacturer solutions, and telehealth. When presented for a quarter, monthly active consumers represent the average of the calendar months in the quarter. Our MAC count reached a record 5.6 million in the quarter, which included mid-hundreds of thousands of MACs from ScriptCycle. ScriptCycle was the small acquisition that closed in the latter part of the third quarter, so the fourth quarter was the first quarter that MACs related to ScriptCycle had been included in the count. We expect ScriptCycle MACs to continue to grow at roughly the same rate as our GoodRx MACs. ScriptCycle, whose revenue is included in prescription transactions revenue, has significantly lower revenue and contribution per consumer than our organic MACs provide. However, ScriptCycle further increases our reach and its consumers represent a large incremental user group that has the potential to use other GoodRx offerings in future. Excluding ScriptCycle, our consumer economics have remained largely consistent. Other revenue grew 153% year-over-year to $22.2 million with strong growth in all of our other offerings. The growth of these newer offerings reflects the value they bring to consumers, as well as our ability to create multiple entry points into our growing platform, which grows LTV over time. As Trevor mentioned, we finished the year with approximately 800,000 subscribers. We're disclosing our subscriber count this quarter to provide a more holistic view of our growing consumer base and to present another way we monetize a portion of the millions of visitors on our platform. Our subscription offering, which is rapidly becoming a scale business, is a natural extension of our successful prescription transactions offering. It addresses the same consumer needs and generally offers even greater savings on prescription medications. Many times, consumers go through the same funnel when searching for prescription prices, and if they choose the lowest price, they will often become subscribers without ever having been a monthly active consumer. This is mutually beneficial because we believe that we offer consumers more value through our subscription offerings, and they also generate higher LTV for us and provide better revenue predictability. As we continue to scale our subscription offering and it contributes more meaningfully to our financials, we could also see increased conversion from max to subscribers, which also produces a higher LTV. To summarize, looking at our total prescription-related offerings, we have 5.6 million MACs in our prescription transactions offering and 800,000 in our subscription offering. GoodRx has 18 million monthly visitors in January. In addition to monetizing MACs and subscribers, we're able to further monetize a portion of these visitors with offerings such as manufacturer solutions, delivering more value to consumers and increasing the scale of our prescription-related offerings. Turning back to our 4Q performance, the growth of our prescription transactions and subscriptions offering in the quarter was partially offset by headwinds related to COVID-19. With the widespread surge in cases and resulting lockdowns and restrictions, consumers continued to defer non-urgent physician visits. This, coupled with an unusually weak cold and flu season, negatively impacted new therapy starts and prescription volume in the fourth quarter. As Trevor mentioned, we believe we are well-positioned to capitalize on the rebound in doctor visits, prescription fills, and new therapy starts once consumers resume typical healthcare purchases and start clearing the substantial backlog that has built up over the last year. Moving down the P&L, cost of revenue is $9.2 million, or 6% of revenue, compared to $4.6 million and 4.1% of revenue in 4Q19. The increase was driven by provider costs related to our telehealth offerings due to an increase in the number of online provider visits, an increase in outsourced and in-house personnel related consumer support expense to support our growth, and an increase in overhead allocations. We continue to deliver strong gross margins at the mid-90s levels. Product development and technology expenses were $23.7 million compared to $9.8 million in the comparable period last year. This increase is primarily due to continued investment in the team and product, as well as an increase in stock-based compensation, including awards made in connection with our IPO. Excluding stock-based compensation and various items related to acquisitions, adjusted product development and technology expense was 11.2% of revenue compared to 7.8% of revenue in 4Q19. We plan to continue to invest in our product and platform with the goal of creating the best consumer experience, continuing to scale our existing offerings, and developing new offerings, all of which are intended to help more consumers in different stages of their healthcare journey deliver more value to them and increase the lifetime value we generate. The sales and marketing expenses were $74.9 million compared to $54.3 million in 4Q19. We increased advertising spend by $13.5 million year-over-year and continued to build a strong team with the goal of increasing our consumer base and building the GoodRx brand, which we believe will yield positive returns for us long-term. Adjusted sales and marketing expenses, a percent of revenue was modestly lower year-over-year making up 46.8% of revenue in 4Q20 compared to 47.7% last year. We continue to optimize our consumer acquisition spending in light of COVID-19 market conditions and are actively monitoring doctor visits and new therapy starts. General and administrative expenses were $340.8 million compared to $4.5 million in the fourth quarter of 2019, The majority of this increase, $285.3 million, or approximately 85%, was due to stock-based compensation expense and associated payroll tax expense related to the non-recurring co-CEO awards made in connection with the IPO, as well as $41.7 million of non-recurring, non-cash charge related to a charitable stock donation in support of GoodRxHelps, our philanthropic endeavor that Doug described earlier in this call. Excluding these two non-recurring and other items, adjusted G&A as a percent of revenue is 4.1% compared to 3.4% in 4Q19, with the incremental costs primarily associated with starting to operate as a public company at the end of September. In the fourth quarter, we incurred a net loss of $298.3 million. Again, this is primarily due to stock-based compensation expense and related payroll taxes of $297.8 million in the quarter, $285.3 million of which related to the non-recurring co-CEO grants made at the time of the IPO, and the non-recurring $41.7 million related to the stock donation. Adjusted net income was $32.2 million, growing 40% compared to $23 million in 4Q19. Adjusted EBITDA grew 17% year-over-year to $49.1 million. Adjusted EBITDA margin continued to be strong at 32%, reflecting our ability to deliver profitable growth due to compelling unit economics of our business and repeat activity on our platform, which remained at over 80%. Our adjusted EBITDA margin decreased approximately 500 basis points year over year due to continued investments in product development and technology, the growth of our telehealth business, and investments in our general and administrative infrastructure, all of which I've discussed. On a quarter-over-quarter basis, adjusted EBITDA margin decreased primarily due to an increase in advertising spend and a shift of some marketing investments from the third quarter into the fourth quarter, as discussed during our third quarter earnings call. We continued to generate strong cash flow, with net cash flow from operating activities of $14.9 million for the quarter. Cash flow from operating activities was impacted by over $10 million in payroll tax expense related to the co-CEO grant, as well as some prepaid expenses we had to make in relation to our operation as a public company and for some 2021 marketing expense. On the capital investment front, our primary investments were related to the non-recurring one-time build of our new headquarters in Santa Monica, as well as additional investments in our platform and product. Approximately $14 million has been spent to date on our new headquarters, net of tenant improvement reimbursements, approximately $2 million of which was spent in the fourth quarter. While we've substantially completed the construction, there may continue to be some limited amounts of CapEx hitting our cash flow statement in the first quarter of 2021. We ended the year with $969 million of cash and cash equivalents. Before turning to guidance, I want to spend a moment on the co-CEO awards. As a reminder, at the time of the IPO, we granted non-recurring equity awards of approximately 24.6 million shares to our co-CEOs for a total expense of $533 million over four years. A portion of the awards were performance-based, with vesting dependent on the price of our shares, and the other portion was time-based. The performance-based portion totaled $320 million of expense and the time-based portion totaled $213 million of expense. As of the end of 2020, the performance-based portion of the awards has been fully vested and expensed at $320 million, $88 million in the third quarter and $232 million in the fourth quarter. For the time-based portion, $53 million of the awards were expensed in 2020, $10 million in the third quarter and $43 million in the fourth quarter leaving $160 million remaining to be expensed in future periods. Approximately $91 million of the remaining $160 million will be expensed in 2021. $30 million, $24 million, $20 million, and $17 million in the next four quarters, respectively, starting in the first quarter. In addition to stock-based compensation, we also incurred employer tax expense of $10.4 million in the fourth quarter in connection with these awards. We expect another couple million dollars of employer taxes to be incurred in 2021, or approximately 1.5% of the $91 million. And now turning to guidance. For the first quarter of 2021, we expect revenue of $158 to $161 million, reflecting 20% year-over-year growth at the midpoint. We believe this growth will be driven primarily by a triple digit increase in other revenue as momentum in our manufacturer solutions, subscriptions, and telehealth offerings continues. We expect our prescription transactions revenue to contribute to the first quarter growth as well. Fourth quarter headwinds related to COVID-19 and a weak cold and flu season have continued into the first quarter and are reflected in our guidance. We estimate that the lack of flu will have a total negative impact of approximately $5 million on prescription transactions revenue this winter, with the vast majority of this impact felt in the first quarter of 2021. On a year-over-year comparative basis, it's worth noting that Q1 2020 was an extremely strong quarter for us relative to the COVID-impacted Q1 2021. The first quarter of the year in a non-pandemic environment is typically seasonally strong, and that was the case last year. Additionally, we saw some modest pull forward at the onset of the pandemic last March as consumers stockpiled their medications. We expect other revenue to continue to make up an increasing percentage of our revenue figure in the first quarter. On the adjusted EBITDA front, we expect an adjusted EBITDA margin of approximately 30% as we continue to invest in our brand and platform. As stated in our third quarter's earnings call, we will not be providing specific guidance around our user count on a regular basis. It's worth noting that as long as COVID-19 continues to impact consumer behavior around doctor visits and prescriptions, our MAC and subscriber growth may be impacted. However, we believe that this will be followed by tailwinds from the clearing of the substantial medical backlog which continues to build. A recent IQVIA study found that in 2020, there are almost 1 billion diagnosis visits that did not happen. When this backlog begins to clear and we see pent-up demand, we will be there to help our consumers re-engage with the healthcare system. Turning to the full year, we expect 2021 revenue of $735 to $755 million, reflecting year-over-year growth of 35% at the midpoint. This assumes the second quarter will still be impacted by COVID-19, and the healthcare activity will begin to pick up in the third quarter as a substantial backlog of 1 billion visits will begin to clear, significantly adding to visit, therapy start, and prescription volumes. We expect our adjusted EBITDA margin to be in the range of 30% to 32%, with 2021 laying the foundation for future growth of our platform and our brand as we continue to make the right investments to maximize value for our consumers, the company, and our shareholders. We are building the leading consumer-focused digital healthcare platform in the U.S. and plan to continue investing our strong cash flows in our platform, product, user experience, and our brand with the goal of creating the best consumer experience and improved healthcare affordability and access for all Americans. This is a scale platform with a rare combination of high growth and profitability. We benefit from a strong brand, first mover advantage, and a decade of experience and relationships that benefit all key stakeholders in our ecosystem. And we believe we've only just begun to scratch the surface of a massive market opportunity. And with that, I'll now turn to Trevor for closing thoughts.
spk07: Thanks, Carson. 2020 was another amazing year for GoodRx. We helped more Americans than ever access affordable healthcare when they needed it most and delivered strong, profitable growth at a very fast pace. We grew revenue 42% over 2019, more than 2x since 2018, and more than 5x since 2016, only four years ago. We also grew adjusted EBITDA five times since 2016, reflecting our focus on efficiency as we've grown, all while maintaining our extremely high NPS scores with both consumers and providers, a 4.8 app rating for GoodRx and a five-star app rating for HeyDoctor. Over the last few years, we've built on the success of our prescription transactions offering by introducing new offerings to bring more value to our consumers at each stage of their healthcare journey. Between our subscription, telehealth, and manufacturer solutions offerings, Our services now span even more of the healthcare journey, but we are just beginning. Our teams are doing amazing work, and we are so excited for the continued rollout of new products and services for consumers and prescribers. We have barely scratched the surface of the massive market opportunity as we continue to accelerate our transformation of healthcare for all Americans. With the strength of our brand, our increasing reach, commitment to our mission, and the value we continue to create for consumers, We believe we are well positioned to win across the $4 trillion healthcare ecosystem in 2021 and beyond. Thank you for your continued interest in GoodRx. We look forward to sharing our progress in the quarters to come. And with that, I'll now turn the call over to the operator for questions.
spk05: As a reminder, to ask a question, you will need to press star 1 on your telephone. Again, that's star 1 on your touchtone telephone to ask a question. To withdraw your question, press the pound key. We ask that you limit yourself to one question and one follow-up so that we have time for everyone's questions within the hour we have allotted. Please stand by while we compile the Q&A roster. Our first question comes from the line of Ricky Goldwasser of Morgan Stanley. Your question, please.
spk13: Yeah, hi, and good evening, and thanks for the update. First question is around the MAC growth. Just wanted to make sure that I heard it correctly. What was the impact from script cycle on the sequential growth from 3Q to 4Q? And you've clearly done the acquisition earlier in the year, so was that already included in the guide?
spk07: Thank you, Ricky, very much for the question. Yeah, to step back just one second to high level and look at sort of the macro and the overall growth, You know, we delivered, you know, amazing performance in 2020 with sort of 42% year-over-year revenue growth, over $550 million, sort of this incredible sort of 37% adjusted EBITDA margin, really worth $200 million adjusted EBITDA. We've hit a lot of new milestones, including sort of that record, sort of $5.6 million MAC. And we're really happy to now be talking about the numbers we've hit on subscribers, where we've doubled our subscribers, you know, reaching 800,000 subscribers. and sort of the 18 million visitors also. So we're really excited about the growth and profitability that we demonstrated and continue to demonstrate. And so I'd like to turn it over to Carson, though, who can speak about specifics of the MAC on script cycle.
spk06: Hey, Ricky. Yeah, thanks for the question, and thanks for turning it over, Trevor, as well. Ricky, with respect to MAC count, yeah, we hit 5.6 million in the – in the quarter, and of that $5.6 million, mid-hundreds of thousands of them will max. And we did not include those max in guidance previously to your question because the acquisition just closed at the end of the third quarter, it was, and we needed some time to work through the calculations. So they're wholly incremental, the mid-hundreds of thousands to our base of existing max, and we're quite excited about them because they represent both deeper penetration into the market broadly and secondly because they represent users to whom we may be able to sell other GoodRx products and services going forward, which is also an exciting reality. I think the final thing that we like about them is that our channel of acquiring ScriptCycle Max is a little different. While we've often had partnerships with the larger pharmacy chains, Through ScriptCycle, we get much more access to smaller and regional pharmacy chains and can increase our penetration in that market. Is that helpful, Rikki?
spk13: Very helpful. Thank you. And then my next question, I mean, clearly you're seeing a lot of momentum in manufacturing solutions. I think, Trevor, you mentioned a couple of times the backlog that you have and sort of that booking number issue. Can you maybe give us more updates, any way for us to kind of like quantify the contribution you're going to see in 2021 and the visibility that a booking gives you?
spk07: Yeah. So, you know, we're really happy with the growth in manufacturer solutions. You know, that offering continues to grow at this high rate. You know, we grew 4X year over year as we continued to sort of help reduce the cost of brand prescriptions. In Q4, we continued building out the manufacturer solutions team. We rolled out more of these integrated programs we talked about with additional manufacturers. We launched new care portals. We just kind of driven that. And so we anticipate with sort of the great sort of progress we've made on these products, on these teams, and all the existing users coming to GoodRx to access these solutions, that 2021 will also be a great year for the growth of this area. So, Karsten, do you want to speak to any additional details on that?
spk06: Yeah, I think you largely covered it, Trevor, but Ricky, in the past we've talked about how excited we are about manufacturer solutions because we feel like we're in significant control of how fast it grows, meaning we already have the users, we already have the inventory and the app, and it's really a matter of incrementally selling through to the different pharmaceutical manufacturers and agencies. And as Trevor said, the scaling of the team to levels that we haven't previously had has allowed us to really accelerate the business. We continue to increase the number of our manufacturer partners, and our client renewal rate from the existing partners exceeded 90%. So when you combine those two things together, along with our record bookings in the fourth quarter, We believe that 2021 is a year that we're extremely well positioned for. We also think that as manufacturers continue to evolve and the historical ways of interacting both with HCPs and with consumers changes post COVID that we're well situated to serve the new reality of how pharma manufacturers interact with those important constituencies. That said, we're still only a tiny bit penetrated into TAM. You know, when you think about it overall, this is a $30 billion TAM by our estimation, and we're just barely scratching the surface of it. So we're really excited about this line of business.
spk05: Thank you. Our next question comes from Doug Anmuth of J.P. Morgan. Please go ahead.
spk17: Thanks for taking the questions. First, you talked about the backlog of undiagnosed conditions and neglected preventative care and Certainly 2021 providing a massive opportunity to help consumers. Not looking for a product release or anything here, but just curious if you can give us a sense of what kinds of new services you may think about, just as you think about the product roadmap going forward. And then secondly, I was hoping you could talk a little bit more about the marketing strategy, just kind of coming out of COVID and, you know, how that impacts your ability and how you're thinking about leaning in more on marketing as we kind of go through the quarters of 21. Thank you.
spk07: Thank you, Doug. Really appreciate the question. And I'm going to hand it over to Doug to answer that.
spk02: Hey, Doug. It's Doug. So, yeah, thank you for asking. You know, the overall theme of our product roadmap is We want to help more people and more parts of their healthcare journey. As we've already talked about, manufacturer services is wide open for us. We already have engaged consumers who are literally in the purchase process, and we are excited to continue to deliver innovative and cool solutions that, honestly, I think just are superior to what you can see otherwise in the market, and we just see tremendous potential there. In addition, we are spending a lot of time and effort working on getting to know our consumers better, right, with accounts and subscriptions, as you already heard about our record growth of subscribers. but so that we can actually anticipate what a consumer would need and be there for them before they may even know that they need it. So we're really, really excited about all these initiatives that will get us to know our consumers better. We've talked a little bit about telehealth. We've had tremendous growth in telehealth over the course of the year, especially in services like offering refills when people are out of medications, for example. And we're going to continue to invest a ton into just finding affordable and convenient care anywhere where a consumer has a gap. And God knows, You know, in 2021, all these consumers have this pent up demand and they're open to new ways. And we're just very, very fired up to participate as consumers emerge from this pandemic and introduce them to new ways, better ways to get their health care. I'll hand it back at this point to Trevor to maybe handle the marketing question.
spk00: Sure.
spk07: Yeah. So for marketing, you know, we have, you know, continued to invest in marketing to build sort of our brand. and build awareness, you know, as we've talked about, even, you know, at the scale we're operating at, and that growth rates are operating at, 70% of consumers don't even know that prescription prices can vary significantly across pharmacies, much less sort of the tools that we are providing to help them navigate this sort of complex healthcare system. So we're going to continue driving awareness at the top of the funnel through various channels, You know, the main way we get consumers is still sort of unpaid, word of mouth, just, you know, the 90 MPS score that we have with consumers because we offer a good product drives increased users. But we're going to double down on the work we're doing around insights, which we can talk about more with health professionals as we've been doing. And we've really started testing out some new channels, things like out-of-home audio where we've really never advertised in the past. So we see a lot of opportunities across a lot of areas to continuous expanding marketing, building brand. And, you know, we're starting to leverage our consumers and their stories. You know, the stories we hear from our consumers are very powerful, and we want to share and amplify those stories where appropriate. So we started doing a lot of great work on that front, led by our new chief brand officer, Simon Cassels, who was previously CMO at Ring and did amazing work there. And so we, you know, we are excited about, you know, all this continued opportunity on marketing and making people aware. of what we're doing.
spk17: Great. That's helpful. Thank you both.
spk05: Thank you. Thank you. Our next question comes from the line of Ross Sandler of Barclays. Please go ahead.
spk15: Hey, guys. Apologies if this is already asked. Just been hopping around a little bit. But a follow-up on that marketing efficiency. So it seems like – Industry-wide CPMs and digital are going to come down fairly short order on the back of IDFA and some of these more restrictions around targeting. So do you think that could drive better efficiency from your marketing and potentially help accelerate your user growth or no? And then just high level with consumers engaging with pharmacies at a higher cadence with the vaccine campaign, Any thoughts on how you might combine that with marketing to accelerate some of the Mac growth? Thanks a lot.
spk07: Thank you, Ross, for the question. You know, on the marketing side and marketing efficiency, you know, we've been sort of proud of, you know, being able to deliver this extremely good product you know, performance marketing throughout the sort of history of our business along with the, you know, brand and increasing brand awareness. You know, as I mentioned, we've been testing a lot of, you know, new channels and finding new areas that are excellent and work. You know, we've really been in a situation where, you know, there's a lot more opportunity on this type of marketing. And so, you know, it's really us digging in doing more of this So, if really their drive, CPM is decreasing and we can use that, that's only helpful, but certainly not something we are assuming needs to happen in any way for delivering the results we're saying. On the second, in terms of more engagement in the pharmacies, yes, we think that there's a lot of benefits from this increased distribution of vaccine. specifically of, you know, as it transitions in this vaccine distribution from some of these more at-risk populations to sort of a broader population base, I think we're seeing more and more of that distribution going through pharmacies, which increases pharmacy foot traffic, which is generally beneficial to us. There's a lot of more opportunities to, you know, to work with the pharmacies on that and just get more general usage of our solutions from it. You know, we'll talk potentially more about what we've been doing around sort of vaccine alerts, and some of the partnerships, there's a large number of, you know, 1.2 million people signing up for that program. So all of this will, you know, is helpful for driving additional demand as we go through the year and continuing sort of, you know, even even more of the sort of great performance we had in 2020. Christian, really appreciate the question.
spk05: Thank you. Our next question comes from Justin Post, Bank of America. Your line is open.
spk08: Great. A couple questions. First, you're one of the few companies guiding for the year, and just what about your business, the stickiness of your user gives you confidence, and prior years have you been able to hit your numbers? And then the second question, on the acceleration in the second half, When you look at the users as far as frequency or spend, what was down this year that gives you confidence that that will come back as we get to the reopening in the second half? Thank you.
spk07: Yeah. So the first, I'm going to actually hand that over to Karsten.
spk06: Sure. I'll take the first part of your question, Justin, and great to speak with you again as well. When we think about our business, we have a few things about it that are really attractive to us and make it somewhat more predictable. The first, of course, is the reality that over 90% of our transactions are repeats. So that helps us significantly. I think the second one is that in relation to some of the marketing questions that Trevor already answered, the returns on our marketing are also returns that we now know how to expect and anticipate quite well. I think the other important considerations are that we've looked closely at the patterns of what's happened over the last couple of quarters and what we expect to happen over the rest of the year. Over the last couple of quarters, I think the combination of a weaker flu season this year, as folks got less exposed to regular flu, and a heavier COVID had a pretty significant impact. But as you'd expect, we believe that the regular flu season, which frankly dragged down Q4 and Q1 revenues, mostly Q1 by 20%, nearly $5 million or approximately $5 million. That's a passing thing. We also believe that with the onset of more and more rapid vaccinations on the COVID side, as well as exiting winter, that post Q2, so the second half of the year, that massive backlog of undiagnosed conditions, IQVIA estimates about a billion diagnoses didn't happen last year, which is close to 30% of them by their stats. that that will begin to unroll. And as that happens, we see that as just a really big tailwind for the latter part of this year for us.
spk08: Is that helpful, Justin? Yeah, that is helpful. And maybe one follow-up. Other revenue was above our forecast and, you know, a lot of interesting things going on. I'm sure we're all going to try to model it. Any help in full year or for the quarter breaking down that other revenue in the categories?
spk06: Sure, I think we're not breaking it into categories really, but what I can tell you is that we continue to see the other revenue growth rate continuing to grow faster than the core prescription transactions revenue. That revenue is growing quite rapidly too, but it's just that the other revenue is even faster. Like we talked about before, in particular, Our manufacturer solutions business is performing very, very well. We're excited about that one. And when you really look at the combined growth last year, which was 153% year over year in 4Q, we believe that going forward into 2021, we're well positioned to produce high growth numbers as well. So I think across the whole other revenue spectrum, set of businesses, we're feeling extremely positive indeed.
spk05: Great. Thank you. Sure. Thank you. Our next question comes from Nick Jones of Citi. Your question, please.
spk14: Great. To one, can you talk about, I guess, the traction on the mail order as COVID restrictions remain tight? And then the second question is, as we get to the second half of the year, You know, are you seeing anything in some of the states that have already reopened, like Texas that has no masks and all businesses are open? I think there's some other southern states who have followed to give you confidence that once things do reopen, you'll kind of see this resurgence in therapy starts. Thanks.
spk07: Great. I really appreciate the question. Yes, let me talk first about mail. You know, we have been building some mail order capabilities to deliver more value to our consumers who are looking for that option. You know, we added mail order to both Gold and our telehealth offerings in 2020 as we continue to meet consumers where they are in their healthcare journey. But, you know, what I'd add here is mail continues to be this really small percentage of the prescriptions market. we believe were, you know, well positioned if, uh, to capitalize, if that were to change, but, but like males remained at this similar penetration where on a number of filled bases, it's a mid single digit percent of the market. Um, and even though there's been like a lot of effort over, you know, over many years from a lot of different players, um, even with COVID, you know, people are talking about increases, but these are small increases, um, relative to, uh, you know, the actual market. And so, you know, it's really just a very stable number. There's a lot of reasons why that's hard. So even though, you know, COVID has been an important option for some consumers during COVID, penetration more broadly really did not change significantly. So we're pleased with the adoption of mail on our platform, but it doesn't directly make a significant contribution to financials today, but it's another way to deliver value for consumers. And it drives the growth for our subscription offering. It gives another way to cross-sell our tele-consumers, increases life and value. And most importantly, you know, we're just super focused on providing more value to consumers across a broader part of their healthcare journey, you know, really providing the best possible solutions. And so for the second question, I think let me hand that to Carson to speak to that 2H sort of reopening and such.
spk06: Yeah, appreciate the question. When we think about 2H in particular, I think we think about the reopening in two ways. And I'm not sure the existing trajectories in some of the states that you mentioned are going to be wholly dispositive. The two ways we think about it are, number one, access to resources, i.e. cash. So things like the recently passed Biden stimulus plan is very helpful in that respect. And then the second way we think about it is people's desire and willingness to go out and engage heavily with the health care community again to receive the diagnoses, many of which are in that big backlog I mentioned in response to a previous question. So those effects won't wholly manifest until the Biden stimulus dollars get into people's hands and until the COVID is sufficiently under control, either through vaccines or just through, again, we've seen the warmer months be better. Until those two factors happen, which we see happening in the tail end of Q2 and into Q3, we would expect that the resurgence will come at or after that point. So, again, we don't think the existing patterns across the states fully incorporate the effects that we'll see later on in the year.
spk14: Great. Thank you both.
spk05: Sure. Thank you very much. Thank you. Our next question comes from Jalindra Singh of Credit Suisse. Your line is open.
spk12: Thank you. I was wondering if you can expand on your response on made order question and spend some time on any of the early observations you have come across on the impact on competitive landscape and opportunities from your point of view from the launch of Amazon Pharmacy and all Primark's discount cards. And anything that you can share from your recent conversation with PBMs or pharmacy partners since that launch from Amazon?
spk07: Yeah, that's a great question. You know, as we spoke to you, we had a record year, including record MAC numbers and the subscriber numbers that we're excited to show, you know, but, you know, to Amazon Primer X, you know, we've seen no impact. You know, they continue to push in mail. You know, that's been their effort since the, They bought BuildFact in 2018 and that's continued. We haven't seen anything outside of what they've been doing. We're not aware of anything that's really impacted our marketing strategy, rates, performance during the quarter. Nothing that's shown any change to any of our user behavior or performance indicating any impact on business at this time. I think as we spoke about, we We work with our pharmacies, the PBMs, to develop and roll out more programs to help consumers. And so, you know, we've been working on additional programs with partners to continue delivering even more value to consumers. So, you know, you can see that in some of the additional pricing programs, et cetera, we're rolling out, we've been doing with partners, and you'll see more of these as you look throughout the year.
spk12: Okay. And my follow-up on, uh, uh, just wanted to get your thoughts on pharmacy transactions revenue per MAC trends. It seems all the declining metric in Q4 was all driven by script cycle. I was wondering if you can help us, uh, how should we think about the trend in that metric on a pro forma basis in 2021? And also if you can talk about your expectations for that metric in longer term.
spk07: Uh, yeah, great. Um, I'll have Karsten speak to, to that metric.
spk06: Sure, and great to speak with you again, Jalendra, too. I appreciate the opportunity. When we look at revenue per MAC, it's best to look at it in terms of its components. The prescription transactions revenue per MAC decreased in addition to the script cycle. As mentioned in the script, it has a significantly lower contribution per user than organic MACs provide. GoodRx's consumer economics on the broader organic MAC side have been completely consistent with where they've been in the past. The other component to consider in revenue per MAC more broadly is other revenue per MAC, and that number continued to grow about 20% Q over Q and 90% so quite rapidly indeed. So to your question of how to think about script cycle in relation to organic MACs, we believe the growth rates across both organic MACs and script cycles should be roughly similar. So that means when we look at the prescription transaction revenue per MAC, on the prescriptions transaction to revenue side, we expect that will stay largely consistent as well. I think when you look at total revenue per MAC, as we said before, we're so excited about the other revenue lines that we'll see that total revenue per MAC increase. Hopefully that's helpful. Yep, thank you.
spk05: Thank you. Our next question comes from Sean Dodge of RBC Capital Markets. Your question, please.
spk09: Sure, thanks. On Hey Doctor, or I guess Good Rx Care now, can you give us a sense of how that trended over the quarter, maybe relative to the third quarter? And I guess what I'm curious about is how do you expect an eventual reopening to impact that business? People feel a little bit more comfortable going back and seeing their doctors in person again. Is that potentially a bit of a headwind this year, or does the uniqueness of Hey Doctor be a little bit more purpose-built, a little bit more script-focused, maybe insulated from that?
spk07: Yeah. Thank you. Thank you for the question. I appreciate it. You know, we've seen a lot of positive momentum with Hey Doctor. We are rebranding it, as I mentioned earlier, as GoodRxCare. And so we've seen this demand across that marketplace, and we've seen the consumer demand and the visits in Good Earth, you know, in Hey Doctor, Good Earth Care continue to increase sequentially. So in 2020, you know, we increased the number of conditions. We treated over 150 conditions across all 50 states, mail order options. We increased the cross-sell numbers from telehealth to our prescription offerings, added these discounted telehealth services for gold. We're making a lot of product improvements to keep making that user experience better. We have heard when we look around some things about how telehealth volumes will shift. There may be people during the pandemic who have gone to telehealth for something that should be treated in person. For us, we have so much. We continue to grow here quickly. We have such a unique offering. We don't anticipate that that affects our momentum in any way. We think there's truly sort of a permanent shift, though, that's come post-pandemic that will sort of, that does make telehealth particularly attractive for certain portions of healthcare. And we think we can uniquely provide more services to our users that help us, you know, facilitate some of these, you know, healthcare needs for them and broaden sort of where we're accessing and providing services to them along their healthcare journey.
spk10: journey so uh you know we're really excited about this and you know expect the momentum to continue at a great pace okay great thank you thank you so much thank you our next question comes from charles re of cohen your line is open uh yeah thanks thanks for taking the question um wanted to ask again about sort of expectations in the second half and and it sounds like what you're saying is that uh you know, COVID, the impact of COVID as well as the soft cold and flu season. But it sounds like more, if anything, COVID itself is having an impact in keeping people from seeing their doctors. And now the expectation is as vaccinations become more common and spread out, you know, and people hopefully all go back to normal, that we're going to unlock this big wave of pent-up deferred care. And I think that makes all sense. As we look at the guidance, particularly on revenue, how much of that, though, do you embed into your assumptions here? Obviously, no one knows yet to the extent that all of this deferred care will be realized. Just curious, and recognizing that it's hard to say now, but what have you built into your assumptions here? Are you just kind of assuming if baseline was 100%, we're going to be you know, 105% of our baseline, or do you think there's going to, or are you already assuming, you know, some big step up as we get into the third and fourth quarters? Thanks.
spk07: Great. Yeah. I appreciate the question. Um, you know, one thing I'll just mention at a high level is, you know, so much, you know, our business has a huge amount of recurring revenue, you know, a large portion of our users, you know, are, are re are using good or X, you know, on a continual basis, which is one element of predictability. And then, you know, we also have additional predictability relative to how our business forums that's been, you know, that's given us great insight into, you know, how this performs. But I'll let Carson speak to this more specifically.
spk06: Sure. And great to talk to you again, Charles. I think as we think about it, there have been two factors that in late 4Q and even more so in 1Q, and those are one, COVID, and two, the weaker flu season, because the weaker flu season is also a bit of a drag. We think it costs us approximately $5 million or so in revenue. When we look at the rest of year forecast, we compare basically where we are to where we should be or where we'd expect to be and look at that gap closing over time, particularly as we get out of the first half of the year and into the second half of the year. So that's really how we think about it. Primarily Charles.
spk10: Okay. So in other words, it's not, it's sort of like where you expect to be, where you would have been, uh, not necessarily saying that it's where we would have been plus some pent up demand. Is that the fair way to think of it?
spk06: I think the fair way to think of it is the more of a pent up demand releases, uh, the better, clearly the better it is. But, um, But, yeah, I think conceptually it sounds like you could be aligned with where we are.
spk10: Okay. That's helpful. Thank you. Thank you.
spk05: Thank you. Our next question comes from Lloyd Wamsley of Deutsche Bank. Your question, please. Thanks.
spk18: Yeah, I wanted to just ask about these script cycle MACs. You know, you mentioned they monetize at a big discount to where you monetize your core good RX MACs. Is there an opportunity to get that up? It was part of the acquisition. We can plug our system in and get that up. And I guess, do you think you can fully close the gap? What needs to happen to get there? Where are you on that path would be the first question. And then the second question would just be, on the gold subscription, as you've integrated mail order and telehealth to the bundle, How have you seen engagement chain or retention change? Any further color you can give us on how enhancing the bundle has changed the, I guess, the LTV CAC type dynamics?
spk07: Great. Really appreciate the question. On ScriptCycles, that's an acquisition that we closed in August 2020. It's a relatively small company, but what I think we spoke to then, you know, area we're particularly excited about there is they primarily have partnered with these regional retail pharmacy chains, whereas GoodRx has worked a bit more with the larger areas. So the main thing there is this additional expansion opportunity with these regional and smaller pharmacy chains, and that we think is quite complementary. But the main opportunity there, we think, is the opportunity to grow reach, to grow scale, and to do a lot of cross-selling and up-selling. So that's sort of how we see that evolving. And then for gold, what I would say there is these new benefits that we've been adding, the main impact we see from them is that they're driving forth behind the strong subscriber growth, 102% year-over-year subscriber growth. And as we've been adding these additional benefits like prescription mail order, benefits to Gold in the third quarter. And in the fourth quarter, we've added these exclusive discounts on online doctor visits that we are able to sort of get better attached between all of our services. And all of this lets us convert users into Gold more effectively and continue adding to the benefits they're receiving. So our goal there is to really deliver this broad convenience and affordability to consumers at different stages of their healthcare journey, and have this really tight relationship with our consumers. As we have this tighter relationship, we think it enables us to generate this higher lifetime value, which we've already seen and spoken in the past about this, meaningfully higher LTV from gold users, try even better revenue predictability, and sort of just continue expanding on across the upsell, especially as we take the services we've spoken to you about, but also these new and additional services and areas we're working on as we expand and as we help people across their broader set of needs. So I appreciate the question.
spk18: Thank you.
spk05: Thank you. Our next question comes from Lee Horwitz of Evercore ISI. Your line is open.
spk04: Great. Thanks. Sorry to maybe run back over a couple of things here, but maybe sticking with transaction revenue per MAC, the declines we had in the quarter, and what we believe to be implied for 21. Just so I'm fully clear, is script cycle really the only driver of this, both in the quarter and as we look at 21? Is there anything else that we should be aware of in terms of kind of potential fundamental headwinds to transaction revenue per MAC? And then, you know, any chance we can get maybe a little bit of a finer point on what's implied in terms of the script cycle contribution for revenue in 21. Thanks again for the question. Thank you very much, Lee. Carson?
spk06: Hey, Lee. Great to talk to you again. Lee, in terms of PTR, prescription transaction revenue per MAC, it would have been effectively consistent with prior quarters but for script cycle. So... I think script cycle is really the only contributor to shifts in PTR per MAC, so no real changes there. In terms of contribution more broadly, we haven't broken out the script cycle specifics at this point for a variety of reasons, including some related to the confidentiality of our script cycle deals. But we're pretty excited about the business, and we believe it will grow equally quickly as our base business will. So from a modeling perspective or from a blended PTR per MAC perspective, I think knowing that both are growing at the same time should help make sure that that modeling process can take place pretty accurately.
spk04: Great. Helpful. Thank you.
spk06: Oh, no problem, Lee.
spk05: Thank you so much. Thank you. Our next question comes from John Ransom of Raymond James. Your line is open.
spk16: Hi. You know, when we talk to long-term investors on GoodRx, one of the questions we get is, is this really sustainable for some of your retail partners? And you've heard a couple of them kind of publicly float the idea of creating their own subscription program where they could get around these most favored nation clauses with PBM contracts. So, I mean, do you see, like, two years from now, are you still going to have the same retail network? And, you know, what is the barrier for, say, Walgreens to just create its own program and do it through their loyalty program or CVS? And how do you sort of keep this retail network in the fold, just given the pressures on that channel? And then the other thing is, like, the small PBM channel is also under a lot of pressure from, the big three who can do everything better and cheaper. So just kind of speak, if you would, strategically to the sustainability of the model because you're kind of between two players in the channel that, you know, are not exactly prospering, you know, growing, gaining share. Thanks.
spk07: Sure. I don't appreciate the question. Yeah, so maybe I'll start first. I'll cover both parts of this. The You know, with retailers, you know, we've been doing this for a decade. You know, we believe we are able to continue driving value for the retailers, for the PBMs, for every member, you know, every part of the sort of ecosystem which we work. Every sort of transacted we do grows the amount of value we're really able to provide. Things like, you know, retailer programs. Specifically, these have existed since we started, you know, Walgreens has offered programs since we started Business Park 4, right, and everyone else. You know, we don't anticipate, you know, that this dynamic is changing. And I think you can see programs that we're running that are really exciting that drive incremental value, like the Kroger RX Savings Program powered by GoodRx that we offer. that does some things in a different way and lets us sort of have even tighter connection to users and really drives value for those retailers in some unique ways. So we're really excited there about those programs. On the PBM side, you know, we work with all of these PBMs. And we work with extremely large, you know, with all the PBMs. We work with, you know, from the largest to smaller. We continue to add PBM relationships. And as these PBMs grow, you know, relationships grow, we're able to deliver them, you know, more, you know, more reach. These relationships only get better for both sides. So it, you know, we think each of these factors just makes it so the business is stronger, relationships are stronger, and, you know, the value we're able to deliver consumers is even better.
spk05: Thank you. Thank you very much. Thank you. Next question comes from Stephanie Davis of SVVLeerInc. Your line is open.
spk01: Hey, guys. Thank you for taking my question. Congrats on the strong performance in the quarter. So following up on Charles' question, this one is probably best for Trevor and Carson. But you guys mentioned a highly recurring user base, acknowledging that flu headwinds affect both 4Q and 1Q, and COVID affects both 4Q and 1Q. Is there anything beyond conservatism in the low single-digit sequential growth from 4Q to 1Q, considering it's normally more in the high single to low bubbles?
spk07: Stephanie, yeah, thank you for the question. I think Carson, I'll hand this one to you.
spk06: Yeah, no, Stephanie, we're decently far through the quarter right now, given that it's March 11th. And as we sort of look at the quarter's evolution, the impact of the flu on the top line has been about 5 million combined in the last part of the fourth quarter and through first quarter. And while the transactions are highly recurring, the one challenge that COVID does present is that there are folks who don't actually get their new diagnoses. So it doesn't necessarily hit the recurrence of existing transactions, but we're eager to have COVID unwind so all those new diagnoses get made and end up coming over to GoodRx as folks get the medications required to address whatever the diagnosis is. So that's where we see ongoing lift, particularly later in the year, relative to 1Q and even 2Q. Is that helpful?
spk01: No, that's helpful. That's helpful. Maybe following up on that one for Trevor, you did talk about that improving attach rate between Hey Doctor and the prescription business. Is it still primarily a one-way street of Hey Doctor scripts to the prescription platform usage, or have you solved for a way to close the loop for these existing users that don't have a script in hand yet but could benefit from that?
spk07: Yeah, no, this is definitely a two-way street. What we're really excited about is both of those things. So when we look at the telehealth offerings, this is on one side a secondary acquisition channel where we can sort of get people in who need a prescription and get them using all of our solutions, get them using our prescription transaction solutions, subscriptions, manufacturers, and we're able to do that. And then also in the other direction. And so one example of the other direction, which, you know, is working great, is this additional benefit of, you know, of these exclusive sort of discounted visits for gold members. And so we're taking subscription users and driving them into these additional services. So we're definitely seeing sort of increased attach on both sides and sort of great benefits on both part of it. And this is really an area we think will continue to make lots of progress on cross-selling, upselling between all of our areas. And so, you know, I really appreciate the question. As we end, I just want to sort of highlight that, you know, we are really happy, you know, with this amazing sort of performance, we believe, in 2020 with this 42% year-over-year revenue growth, you know, with the Great quarter, the great year. And most importantly, the value we've been able to provide to consumers. And we are only scratching the surface of this sort of massive $800 billion near-term market opportunity. And there's so much room to go further into this sort of even larger $4 trillion healthcare market. So we're super excited for the quarters here to come this year and the performance and the new product and services that we'll see. So we really appreciate everyone's time.
spk05: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now.
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