GoodRx Holdings, Inc. (Nasdaq: GDRX) ("we," "us," "our,"
“GoodRx,” or the “Company”), the leading destination for
prescription savings in the U.S., has released its financial
results for the first quarter of 2024.
First Quarter 2024
Highlights
- Revenue1 and Adjusted Revenue1 of $197.9 million
- Net loss of $1.0 million; Net loss margin of 0.5%
- Adjusted Net Income1 of $32.6 million; Adjusted Net Income
Margin1 of 16.5%
- Adjusted EBITDA1 of $62.8 million; Adjusted EBITDA Margin1
of 31.7%
- Net cash provided by operating activities of $42.6
million
- Exited the quarter with approximately 8 million consumers of
prescription-related offerings2
“I’m encouraged by the strides we’ve made since I joined a year
ago,” said Scott Wagner, Interim Chief Executive Officer. “We’ve
made progress against a clear set of priorities which have
reignited growth, enhanced our core value proposition and
strengthened our business model. During the first quarter, we
continued to see positive momentum in the business, both
financially and operationally, and we believe this puts us on a
great trajectory to return to being a ‘Rule of 40’ company.”
1
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 first quarter of 2024, revenue, the most directly
comparable financial measure calculated in accordance with GAAP,
was equal to Adjusted Revenue and we expect revenue to equal
Adjusted Revenue for the second quarter and full year of 2024. For
the first and second quarters of 2023, revenue was equal to
Adjusted Revenue. Revenue excluding the $10.0 million client
contract termination payment represents Adjusted Revenue for the
full year 2023. 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.
2
Sum of Monthly Active Consumers (MACs) for
Q1'24 and subscribers to our subscription plans as of March 31,
2024. Refer to Key Operating Metrics below for definitions of
Monthly Active Consumers and subscription plans.
First Quarter 2024 Financial
Overview (all comparisons are made to the same period of
the prior year unless otherwise noted):
Revenue1 and Adjusted Revenue1 increased 8% to $197.9 million
compared to $184.0 million. Prescription transactions revenue
increased 8% to $145.4 million compared to $134.9 million,
primarily driven by a 10% increase in Monthly Active Consumers
principally from organic growth, including expansion of our
integrated savings program, partially offset by an increase in
consumer discounts. Subscription revenue decreased 6% to $22.6
million compared to $24.1 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. Gold
subscription plans grew year-over-year and quarter-over-quarter to
approximately 708 thousand. Pharma manufacturer solutions revenue
increased 20% to $24.5 million compared to $20.4 million, primarily
driven by organic growth as we continued to expand our market
penetration with pharma manufacturers and other customers. The
prior year quarter included $2.4 million of revenue related to
vitaCare Prescription Services, Inc. (“vitaCare”) compared to none
in the first quarter of 2024 as a result of the restructuring of
our pharma manufacturer solutions offering that occurred in the
second half of 2023. Other revenue increased 19% to $5.4 million,
compared to $4.5 million.
Cost of revenues decreased 25% to $12.5 million, or 6% of
revenue, compared to $16.7 million, or 9% of revenue, primarily as
a result of the run-rate cash savings from the restructuring of our
pharma manufacturer solutions offering that occurred in the second
half of 2023. Adjusted cost of revenues1 decreased 23% to $12.7
million, or 6% of Adjusted Revenue1, compared to $16.5 million, or
9% of Adjusted Revenue1.
Product development and technology expenses decreased 6% to
$31.0 million, or 16% of revenue, compared to $32.9 million, or 18%
of revenue, primarily driven by higher capitalization of certain
qualified costs related to software development and lower average
headcount. Adjusted product development and technology expenses1
increased 3% to $24.6 million, or 12% of Adjusted Revenue1,
compared to $23.9 million, or 13% of Adjusted Revenue1.
Sales and marketing expenses increased 15% to $90.0 million, or
45% of revenue, compared to $78.5 million, or 43% of revenue,
primarily driven by an increase in advertising, payroll and related
costs as well as third-party marketing expenses, partially offset
by a decrease in promotional expenses. Adjusted sales and marketing
expenses1 increased 10% to $81.4 million, or 41% of Adjusted
Revenue1, compared to $74.0 million, or 40% of Adjusted
Revenue1.
General and administrative expenses increased 39% to $41.1
million, or 21% of revenue, compared to $29.6 million, or 16% of
revenue, primarily driven by a net $13.0 million estimated legal
settlement loss recognized in the first quarter of 2024 with
respect to an ongoing litigation and an increase in payroll and
related expenses. Adjusted general and administrative expenses1
increased 1% to $16.4 million, or 8% of Adjusted Revenue1, compared
to $16.3 million, or 9% of Adjusted Revenue1.
Net loss was $1.0 million compared to a net loss of $3.3
million, primarily driven by the individual factors described above
as well as due to a decrease in income tax expense to $1.3 million
from $6.9 million. Net loss margin was 0.5% compared to a net loss
margin of 1.8%. Adjusted Net Income1 was $32.6 million compared to
Adjusted Net Income1 of $29.5 million.
Adjusted EBITDA1 was $62.8 million compared to $53.2 million,
primarily driven by higher prescription transactions revenue and
cost savings from the restructuring of our pharma manufacturer
solutions offering that occurred in the second half of 2023.
Adjusted EBITDA Margin1 was 31.7% compared to 28.9%.
Cash Flow and Capital
Allocation
Net cash provided by operating activities in the first quarter
was $42.6 million compared to $32.3 million in the comparable
period last year, largely driven by changes in operating assets and
liabilities. Working capital changes were primarily driven by the
timing of payments of prepaid services and accounts payable, income
tax payments and refunds as well as collections of accounts
receivable. As of March 31, 2024, GoodRx had cash and cash
equivalents of $533.3 million and total outstanding debt of $658.3
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 first quarter of 2024, we repurchased 21.3 million
shares of Class A common stock for an aggregate of $154.8 million.
As of March 31, 2024, we had $295.2 million of unused authorized
share repurchase capacity under our $450.0 million share repurchase
program, which does not have an expiration date and was approved by
our board of directors during the first quarter of 2024.
Guidance
For the second quarter and full year 2024, management is
anticipating the following:
$ in millions
2Q
2024
2Q
2023
YoY
Change
Revenue1
~$200
$189.7
~5%
Adjusted Revenue1
~$200
$189.7
~5%
Adjusted EBITDA Margin3
Low thirty-percent range
$ in millions
FY
2024
FY
2023
YoY
Change
Revenue1
~$800 - $810
$750.3
~7% - 8%
Adjusted Revenue1
~$800 - $810
$760.3
~5% - 7%
Adjusted EBITDA3
>$250
“For the second quarter of 2024, we are guiding to revenue and
Adjusted Revenue of approximately $200 million, representing
approximately 5% year-over-year growth, and Adjusted EBITDA Margin
in the low thirty-percent range,” said Karsten Voermann, Chief
Financial Officer. “For the full year 2024, we are raising our
guidance for revenue and Adjusted Revenue to be between $800
million and $810 million, representing approximately 6% growth on
an adjusted basis at the midpoint. The full year growth rate has
been tempered by approximately $15 million of top-line impact
associated with the de-prioritization of vitaCare, as well as the
anticipated sunset of the Kroger Savings Club. Additionally,
contra-revenue related to consumer incentives is expected to
increase by almost $10 million this year. In aggregate, this
anticipated $25 million of top-line impact is absorbed in the full
year $800 million to $810 million revenue and Adjusted Revenue
guidance, as is the ongoing full year effect of the Change
Healthcare outage with its expected low-single-digit million-dollar
impact. We expect to achieve over $250 million of Adjusted EBITDA
for the full year, up about 15% from 2023.”
“Our balance sheet and liquidity position remained strong in the
first quarter. We will continue to prioritize cash conversion and
disciplined capital deployment, along with operating efficiency to
support our strategic priorities and accelerate value creation,”
concluded Voermann.
3
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,
May 9, 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/BI7eeaf1985ee44e8e8add6134b8aae7ff
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
$75 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 anticipated impacts of the deprioritization of
certain solutions under our pharma manufacturer solutions offering
and our cost savings initiatives, anticipated impact of the outage
disclosed by UnitedHealth Group, our business strategy and our
ability to execute on our strategic priorities and value creation,
including our expectation to return to being a ‘Rule of 40
company’, our plans, market opportunity and growth, our capital
allocation priorities, 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 significant
reliance on our prescription transactions offering and ability to
expand our offerings; changes in medication pricing and the
significant impact of pricing structures negotiated by industry
participants; 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 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 or maintain and enhance our 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, regulations, standards, and other
requirements; our ability to utilize our net operating loss
carryforwards and certain other tax attributes; the risk that we
may be unable to realize expected benefits from 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 or any
undetected errors or design faults; 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 offering. 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 first quarter of 2024 with approximately 8 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 March 31, 2024 and subscribers
to our subscription plans as of March 31, 2024.
Three Months Ended
(in millions)
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
March 31,
2023
Monthly Active Consumers
6.7
6.4
6.1
6.1
6.1
As of
(in thousands)
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
March 31,
2023
Subscription plans
778
884
930
969
1,007
GoodRx Holdings, Inc.
Condensed Consolidated Balance
Sheets (Unaudited)
(in thousands, except par
values)
March 31, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
533,295
$
672,296
Accounts receivable, net
144,769
143,608
Prepaid expenses and other current
assets
54,735
56,886
Total current assets
732,799
872,790
Property and equipment, net
15,341
15,932
Goodwill
410,769
410,769
Intangible assets, net
58,122
60,898
Capitalized software, net
103,980
95,439
Operating lease right-of-use assets,
net
30,928
29,929
Deferred tax assets, net
65,268
65,268
Other assets
36,756
37,775
Total assets
$
1,453,963
$
1,588,800
Liabilities and stockholders'
equity
Current liabilities
Accounts payable
$
33,518
$
36,266
Accrued expenses and other current
liabilities
70,843
71,329
Current portion of debt
7,029
8,787
Operating lease liabilities, current
5,131
6,177
Total current liabilities
116,521
122,559
Debt, net
646,678
647,703
Operating lease liabilities, net of
current portion
51,339
48,403
Other liabilities
8,356
8,177
Total liabilities
822,894
826,842
Stockholders' equity
Preferred stock, $0.0001 par value
—
—
Common stock, $0.0001 par value
38
40
Additional paid-in capital
2,089,443
2,219,321
Accumulated deficit
(1,458,412
)
(1,457,403
)
Total stockholders' equity
631,069
761,958
Total liabilities and stockholders'
equity
$
1,453,963
$
1,588,800
GoodRx Holdings, Inc.
Condensed Consolidated Statements of
Operations (Unaudited)
(in thousands, except per share
amounts)
Three Months Ended March
31,
2024
2023
Revenue
$
197,880
$
183,986
Costs and operating expenses:
Cost of revenue, exclusive of depreciation
and amortization presented separately below
12,468
16,695
Product development and technology
31,017
32,908
Sales and marketing
89,964
78,522
General and administrative
41,108
29,619
Depreciation and amortization
15,942
14,939
Total costs and operating expenses
190,499
172,683
Operating income
7,381
11,303
Other expense, net:
Other expense
—
(1,808
)
Interest income
7,555
7,234
Interest expense
(14,643
)
(13,133
)
Total other expense, net
(7,088
)
(7,707
)
Income before income taxes
293
3,596
Income tax expense
(1,302
)
(6,886
)
Net loss
$
(1,009
)
$
(3,290
)
Loss per share:
Basic and diluted
$
(0.00
)
$
(0.01
)
Weighted average shares used in
computing loss per share:
Basic and diluted
390,048
412,429
Stock-based compensation included in
costs and operating expenses:
Cost of revenue
$
76
$
161
Product development and technology
5,848
8,589
Sales and marketing
8,127
4,412
General and administrative
11,045
12,337
GoodRx Holdings, Inc.
Condensed Consolidated Statements of
Cash Flows (Unaudited)
(in thousands)
Three Months Ended March
31,
2024
2023
Cash flows from operating
activities
Net loss
$
(1,009
)
$
(3,290
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
15,942
14,939
Amortization of debt issuance costs
837
849
Non-cash operating lease expense
895
1,042
Stock-based compensation expense
25,096
25,499
Deferred income taxes
—
35
Loss on minority equity interest
investment
—
1,808
Changes in operating assets and
liabilities
Accounts receivable
(1,161
)
699
Prepaid expenses and other assets
3,339
(6,005
)
Accounts payable
(2,452
)
(4,737
)
Accrued expenses and other current
liabilities
924
1,184
Operating lease liabilities
(4
)
(140
)
Other liabilities
179
405
Net cash provided by operating
activities
42,586
32,288
Cash flows from investing
activities
Purchase of property and equipment
(407
)
(148
)
Capitalized software
(20,208
)
(14,140
)
Net cash used in investing activities
(20,615
)
(14,288
)
Cash flows from financing
activities
Payments on long-term debt
(3,516
)
(1,758
)
Repurchases of Class A common stock
(153,226
)
(9,517
)
Proceeds from exercise of stock
options
2,584
708
Employee taxes paid related to net share
settlement of equity awards
(6,814
)
(3,523
)
Net cash used in financing activities
(160,972
)
(14,090
)
Net change in cash and cash
equivalents
(139,001
)
3,910
Cash and cash equivalents
Beginning of period
672,296
757,165
End of period
$
533,295
$
761,075
Non-GAAP Financial Measures
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 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,
amortization of intangibles related to 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 costs 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 March
31,
2024
2023
Net loss
$
(1,009
)
$
(3,290
)
Adjusted to exclude the following:
Interest income
(7,555
)
(7,234
)
Interest expense
14,643
13,133
Income tax expense
1,302
6,886
Depreciation and amortization
15,942
14,939
Other expense
—
1,808
Financing related expenses
440
—
Acquisition related expenses
174
1,056
Restructuring related expenses
(125
)
—
Legal settlement expenses
13,000
—
Stock-based compensation expense
25,096
25,499
Payroll tax expense related to stock-based
compensation
879
440
Adjusted EBITDA
$
62,787
$
53,237
Revenue and Adjusted Revenue (1)
$
197,880
$
183,986
Net loss margin
(0.5
%)
(1.8
%)
Adjusted EBITDA Margin
31.7
%
28.9
%
(1)
Revenue was equal to Adjusted Revenue as
there was no client contract termination cost associated with
restructuring related activities in the periods presented.
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 March
31,
2024
2023
Net loss
$
(1,009
)
$
(3,290
)
Adjusted to exclude the following:
Amortization of intangibles related to
acquisitions
2,776
5,609
Other expense
—
1,808
Financing related expenses
440
—
Acquisition related expenses
174
1,056
Restructuring related expenses
(125
)
—
Legal settlement expenses
13,000
—
Stock-based compensation expense
25,096
25,499
Payroll tax expense related to stock-based
compensation
879
440
Income tax effects of excluded items and
adjustments for valuation allowance and excess tax
benefits/deficiencies from equity awards
(8,645
)
(1,607
)
Adjusted Net Income
$
32,586
$
29,515
Revenue and Adjusted Revenue (1)
$
197,880
$
183,986
Net loss margin
(0.5
%)
(1.8
%)
Adjusted Net Income Margin
16.5
%
16.0
%
Weighted average shares used in
computing loss per share:
Basic and diluted
390,048
412,429
Loss per share:
Basic and diluted
$
(0.00
)
$
(0.01
)
Weighted average shares used in
computing Adjusted Earnings Per Share:
Basic
390,048
412,429
Diluted
396,505
414,417
Adjusted Earnings Per Share:
Basic
$
0.08
$
0.07
Diluted
$
0.08
$
0.07
(1)
Revenue was equal to Adjusted Revenue as
there was no client contract termination cost associated with
restructuring related activities in the periods presented.
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 income as a percentage of
revenue, the most directly comparable financial measure calculated
in accordance with GAAP:
(dollars in thousands)
GAAP
Adjusted
Three Months Ended
March 31,
Three Months Ended
March 31,
2024
2023
2024
2023
Cost of revenue
$
12,468
$
16,695
$
12,696
$
16,532
% of Revenue (GAAP) /
Adjusted Revenue (Adjusted)
6
%
9
%
6
%
9
%
Product development and technology
$
31,017
$
32,908
$
24,578
$
23,910
% of Revenue (GAAP) /
Adjusted Revenue (Adjusted)
16
%
18
%
12
%
13
%
Sales and marketing
$
89,964
$
78,522
$
81,396
$
74,024
% of Revenue (GAAP) /
Adjusted Revenue (Adjusted)
45
%
43
%
41
%
40
%
General and administrative (1)
$
41,108
$
29,619
$
16,423
$
16,283
% of Revenue (GAAP) /
Adjusted Revenue (Adjusted)
21
%
16
%
8
%
9
%
Depreciation and amortization
$
15,942
$
14,939
$
13,166
$
9,330
% of Revenue (GAAP) /
Adjusted Revenue (Adjusted)
8
%
8
%
7
%
5
%
Operating income (1)
$
7,381
$
11,303
$
49,621
$
43,907
% of Revenue (GAAP) /
Adjusted Revenue (Adjusted)
4
%
6
%
25
%
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 three
months ended March 31, 2023 in the table above.
The following table presents a reconciliation of each non-GAAP,
or adjusted, 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
March 31,
2024
2023
Cost of revenue
$
12,468
$
16,695
Restructuring related expenses
311
—
Stock-based compensation expense
(76
)
(161
)
Payroll tax expense related to stock-based
compensation
(7
)
(2
)
Adjusted cost of revenue
$
12,696
$
16,532
Product development and technology
$
31,017
$
32,908
Acquisition related expenses
(26
)
(200
)
Restructuring related expenses
(92
)
—
Stock-based compensation expense
(5,848
)
(8,589
)
Payroll tax expense related to stock-based
compensation
(473
)
(209
)
Adjusted product development and
technology
$
24,578
$
23,910
Sales and marketing
$
89,964
$
78,522
Acquisition related expenses
(148
)
—
Restructuring related expenses
(114
)
—
Stock-based compensation expense
(8,127
)
(4,412
)
Payroll tax expense related to stock-based
compensation
(179
)
(86
)
Adjusted sales and marketing
$
81,396
$
74,024
General and administrative
$
41,108
$
29,619
Financing related expenses
(440
)
—
Acquisition related expenses
—
(856
)
Restructuring related expenses
20
—
Legal settlement expenses
(13,000
)
—
Stock-based compensation expense
(11,045
)
(12,337
)
Payroll tax expense related to stock-based
compensation
(220
)
(143
)
Adjusted general and administrative
(1)
$
16,423
$
16,283
Depreciation and amortization
$
15,942
$
14,939
Amortization of intangibles related to
acquisitions
(2,776
)
(5,609
)
Adjusted depreciation and amortization
$
13,166
$
9,330
Operating income
$
7,381
$
11,303
Amortization of intangibles related to
acquisitions
2,776
5,609
Financing related expenses
440
—
Acquisition related expenses
174
1,056
Restructuring related expenses
(125
)
—
Legal settlement expenses
13,000
—
Stock-based compensation expense
25,096
25,499
Payroll tax expense related to stock-based
compensation
879
440
Adjusted operating income (1)
$
49,621
$
43,907
(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 three
months ended March 31, 2023 in the table above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240509112727/en/
Investor Contact GoodRx Whitney Notaro
wnotaro@goodrx.com
Press Contact GoodRx Lauren Casparis
lcasparis@goodrx.com
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