GoodRx Holdings, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the GoodRx Third Quarter 2022 Earnings Call. As a reminder, today's conference call is being recorded. I would now like to introduce your host for today's call, Whitney Notaro, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and welcome to GoodRx's Earnings Conference Call for the Third Quarter of 2022. Joining me today are Doug Hirsch and Trevor Bezdek, our co-founders and co-chief executive officers, and Carson Bowerman, 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, the impact of the grocer issue on our business, and the impact of macroeconomic conditions on our future results of operations. 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 statement. Factors discussed in the risk factor section of our annual report on Form 10-K for the year ended December 31st, 2021, as updated by our quarterly report on Form 10-Q for the quarter ended September 30th, 2022, 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 earnings press release and the accompanying slides, which can be found on the overview page of our investor relations website at investors.goodrx.com. I'd also like to remind everyone that a replay of this call will become available there shortly as well. With that, I'll turn it over to Deb.

Thank you, Whitney. Good afternoon, everyone, and thank you for joining us. Today, we will be sharing our perspective on our recent performance, but I want to start off by discussing two of our most important priorities, which go hand in hand, to help Americans get the health care they need at a price they can afford, and as we deliver on that mission, to create value for our shareholders. During the last quarter, we made significant progress on both of these priorities. We furthered our mission by engaging even more deeply with all of our constituents, and in particular with consumers and providers. We continued to stabilize and further grow our retail network, worked with retailers and pharmacy benefit managers on finding more ways to offer even better consumer prices, expanded our content offerings, and enhanced our provider-focused offerings to make it even easier for providers to be great advocates for GoodRx. Providers have brought millions of consumers to the GoodRx platform over the last decade. We look forward to their future contributions in connection with the continued build-out of our provider-focused offerings. I will talk more about this shortly, but I wanted to first touch on the progress we've made toward driving value for shareholders. During the quarter, we significantly exceeded our own 3Q margin expectations with approximately 28% adjusted EBITDA margin. We drove better-than-expected growth, reaching $187.3 million in revenue in the quarter, and continued our high cash conversion with $33.7 million in cash flow provided by operating activities. Most importantly, we enhanced the stability of and expanded our ecosystem of PBMs, retailers, healthcare providers, and pharma manufacturers, all of which helped us deliver our third quarter results. Trevor will talk more about driving shareholder value shortly. Going forward, we are focused on driving adjusted EBITDA and cash conversion, which we have significant control over, while also delivering continued efficient growth and will continue to take action to drive shareholder value, strong margins, and our mission. I'll now dive into some of the actions we've taken recently that align with our culture as a mission-driven organization. We further our mission by helping consumers and strengthening our business. One example is GoodRx Health, which we launched in September 2021. During the third quarter, GoodRx Health experienced strong year-over-year traffic growth at approximately 25%. Additionally, as we discussed in our second quarter earnings call, we are in the early stages of increasing our consumer engagement efforts, which we will continue to focus on in Q4 and into 2023. We anticipate seeing meaningful benefits as a result of deeper relationships with our consumers, and these ongoing efforts will allow us to help consumers better navigate their healthcare journey with an even more compelling GoodRx value proposition and user experience. Allowing consumers to provide us with more information through registration increases the LTV of each user in prescription transactions and other areas of the business over time as we leverage data to create new tools and products in quarters and years to come. Examples of LTV enhancing consumer outreach include communications around price improvements for chronic prescriptions and reminders to engage with their provider for prescription refills. Our consumer engagement efforts are looking promising with significant differentials in LTV and repeat claim usage for engaged consumers versus baseline consumers. We serve 7.3 million consumers across our prescription transactions and subscriptions offerings in the third quarter, given each subscription plan has on average approximately 1.5 members. We see our engagement efforts opening the door to providing an array of services extending from subscribers to incremental services for engaged consumers And finally, our more transactional savings offerings. Importantly, higher engagement enhances our ability to influence consumer behavior, giving us more leverage and opportunities across our ecosystem of retailers, PBMs, and manufacturers. An example of just one of the expected benefits is our increasing ability to direct users to the retailer that best fits their needs, especially as their needs and prescription pricing change over time. In addition to these new ways to help consumers, we are also furthering our mission by helping healthcare providers through our recent launch of Provider Mode last month. Over the last decade, GoodRx has been embraced by healthcare providers who see firsthand the consequences their patients face when they choose not to fill prescriptions or to get care because it simply costs too much. In the last 16 months, over 865,000 prescribers have used GoodRx to look up medication prices, prescription discounts, and trusted health information on behalf of patients. Mindful of the pivotal role these healthcare providers play in helping patients overcome access and affordability challenges, we wanted to develop a product that would arm providers with the tools they need to better help their patients at the point of prescribing. Provider Mode offers a redesigned prescription savings flow and a faster, more customized experience to help providers find the information they need in the moment so they can spend more time focusing on patient care. At launch, we expanded access to all HTPs, including nurses, medical assistants, and front office staff, as examples. This allows us to penetrate more of the approximately $30 billion Pharma Manufacture Solutions TAM, since data shows that of $30 billion, $20 billion is spent targeting HTPs and $10 billion to target consumers. It complements our growth strategy by addressing brand name prescriptions through awareness, access, and adherence to put more medication in the hands of consumers more affordably. In addition, The broader GoodExpert providers offering has seen almost 90% opt-in rate since it started rolling out last December, putting it on the path to becoming one of the largest provider platforms in the U.S. This recent launch is a remarkable achievement by our team, and I can't thank them enough for their hard work and the progress we have seen in the short time since ProviderVote went live. Early feedback we've received from our partners has also been extremely positive. Provider Mode gives us a unique opportunity to develop strategic integrations with pharma manufacturers that are designed specifically for providers. For example, we recently announced a collaboration with Biogen to make it easier for HTPs who have decided to start patients on Bumerity to enroll patients with relaxing forms of multiple sclerosis in the specialty hub. We anticipate that in the coming months, we will plan to make Provider Mode accessible to users of a top EHR and adding more clinical drug information onto the price pages. We're very excited about where this new platform is heading, and we look forward to providing you with updates on how it is furthering our mission and driving revenue in the quarters to come. The actions we're taking reinforce our ongoing commitment to a world-class, mission-aligned team that helps millions of Americans improve their health outcomes, and as a result, also increases the LTV of our consumer and provider relationships going forward. I will now turn the call over to Trevor for more details on how we're driving shareholder value.