GoodRx Holdings, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone fourth-quarter earnings release; the supplied filing text does not provide a complete Q4 income statement or cash-flow statement.
Business context
GoodRx operates a U.S. digital healthcare platform centered on prescription price comparisons and savings codes. It also earns revenue from subscriptions, pharmaceutical manufacturer solutions and telehealth. Prescription transactions remained the largest business, representing 73% of FY2023 revenue. GoodRx reported one operating segment and U.S.-only revenue.
Financial performance and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $750.3 million | $766.6 million |
| Operating income (loss) | $(27.0) million | $1.7 million |
| Net income (loss) | $(8.9) million | $(32.8) million |
| Net loss margin | (1.2)% | (4.3)% |
| Adjusted EBITDA and margin* | $217.4 million; 28.6% | $213.5 million; 27.8% |
| Net cash from operating activities | $138.3 million | $146.8 million |
| Cash and cash equivalents at year-end | $672.3 million | $757.2 million |
*Non-GAAP measure; it excludes specified expenses and is not a substitute for GAAP results. FY2023 included a $46.7 million income-tax benefit, principally following release of a valuation allowance, which reduced reported net loss.
Prescription transactions revenue was $550.7 million, essentially flat year over year. Subscription revenue was $94.4 million, down 2%; pharma manufacturer solutions revenue was $85.1 million, down 14%; and other revenue was $20.1 million, down 2%.
At December 31, 2023, total assets were $1.589 billion, current assets $872.8 million and current liabilities $122.6 million. Term-loan principal outstanding was $661.8 million (carrying value, net of issuance costs, $656.5 million); the revolving facility had no borrowings, with $90.8 million available after letters of credit. The term loan matures in October 2025 and bears floating-rate interest; its effective rate was 8.46% in 2023. Operating cash flow was positive, while cash declined by $84.9 million during the year.
Changes, outlook and material items
- Revenue declined 2% year over year. Management attributed flat prescription transactions revenue to 3% growth in average Monthly Active Consumers offset by pricing effects from the “grocer issue” and greater consumer discounts. The grocer issue began in 2022 and continues to weigh on revenue and consumer activity.
- FY2023 cost of revenue, excluding depreciation and amortization, rose 3%; product development and technology expense fell 5%, sales and marketing fell 5%, and general and administrative expense fell 13%. Depreciation and amortization nearly doubled to $107.7 million, including $46.7 million of accelerated amortization tied to restructuring.
- The 2023 restructuring plan de-prioritized certain pharma manufacturer solutions, including vitaCare, and was substantially complete by year-end. Recorded restructuring-related costs totaled $75.2 million, including $55.7 million of non-cash charges and a $10.0 million client contract termination payment recognized as a revenue reduction. Management estimated annualized run-rate cash savings of $18–$22 million; actual savings may differ. The plan is expected to weigh on pharma manufacturer solutions revenue in the medium term.
- Quarterly operating indicators: Monthly Active Consumers were 6.4 million in Q4 2023 versus 5.9 million in Q4 2022. Subscription plans were 884,000 versus 1.03 million; Gold accounted for 694,000 plans at year-end. Kroger Savings enrollment ended July 2023 and the program is expected to sunset in July 2024.
- Management stated that operating cash flow and cash on hand should be adequate for at least twelve months from issuance of the financial statements. No numerical revenue or earnings guidance is provided in the supplied text. The company noted typical stronger consumer demand in Q1 and Q4, but recent trends may be obscured by the grocer issue and other factors.
- GoodRx accrued a $13.0 million probable loss for a proposed settlement of consumer privacy class actions; final court approval remained outstanding, and related litigation and mediation developments could affect the outcome. Separately, the company reached a $1.5 million FTC settlement in February 2023 concerning privacy and security practices.
- GoodRx repurchased $104.0 million of Class A shares in FY2023, including a $65.9 million related-party repurchase. After year-end, the Board authorized a new $450 million repurchase program. The revolving-credit-facility maturity was also extended to July 2025 in February 2024.
Key risks and investor verification points
- Verify the sustainability of prescription transaction revenue, pricing competitiveness and consumer use after the grocer issue; three largest PBM partners generated 32% of FY2023 revenue.
- Assess whether restructuring savings are realized and how the vitaCare and other solution reductions affect revenue, margins and cash costs.
- Review the basis and durability of the $46.7 million tax benefit and deferred-tax-asset valuation allowance release; reported net loss improved despite an operating loss.
- Confirm debt repayment capacity, floating-rate exposure and compliance with credit covenants. A 100-basis-point rate increase would have raised FY2023 interest expense by $6.7 million, according to the filing.
- Track the privacy class-action settlement’s final approval and the company’s continuing compliance obligations under the FTC settlement, along with privacy, data-security, TCPA and healthcare-regulatory risks.
- Consider customer concentration, Kroger Savings’ scheduled sunset, strong dual-class voting control and the implications of the new share-repurchase authorization.
The independent auditor, PricewaterhouseCoopers LLP, issued unqualified opinions on the financial statements and internal control over financial reporting as of December 31, 2023.