GoodRx Holdings Faces Decline in Q3 Sales Amidst Contract Termination Payment

GoodRx Holdings, Inc. GDRX, a well-regarded firm in the telemedicine industry providing tools for prescription price comparison in the United States, revealed a downturn in its stock performance following the release of the third quarter financial report. The company, based in Santa Monica, California, showed a decline in quarterly sales year-over-year. Specifically, GoodRx's Q3 sales dipped by 4% compared to the previous year, registering a figure of $180.0 million down from $187.3 million. This decrease was largely attributed to a significant contract termination payment amounting to $10.0 million to one of its clients. However, this was somewhat counterbalanced by the company's organic growth in revenue from prescription transactions.

Analyst Expectations Vs. Actual Sales

Expectations from analysts did not align with the reported figures - they had forecasted sales to be higher, estimating a total of $188.28 million for the quarter. In spite of the lower sales, GoodRx did witness an uptick in adjusted revenue, which saw a 1% increase to $190.0 million, bolstered mainly by the growth in prescription transaction revenues.

The company’s prescription transactions revenue itself rose by 3% to reach $135.4 million, up from $131.2 million, propelled forward by a 5% surge in the number of Monthly Active Consumers. This increase, however, was counteracted by a reduction in fees earned per transaction.

Consumers and Partnerships Drive Momentum

By the end of Q3, GoodRx had expanded its consumer base of prescription-related offerings to over 7 million. In a statement by Scott Wagner, the interim CFO, he highlighted the company's crucial achievements including the growth in adjusted revenue and fortifying partnerships with retail pharmacies. The firm also announced fresh integrated savings programs with entities such as MedImpact and Navitus and initiated a significant collaboration with Sanofi SNY, focused on enhancing insulin accessibility to Americans nationwide.

The period concluded with 6.1 million Monthly Active Consumers, showing an increase from the 5.8 million recorded in the same period the previous year.

Future Financial Outlook

GoodRx set forth guidance for the financial year 2023, projecting an adjusted revenue in the range of $752 million to $758 million. For the fourth quarter of FY23, the company anticipates an adjusted revenue of between $188 million and $194 million. These predictions hover close to consensus estimates. Additionally, GoodRx expects to maintain a high 20% adjusted EBITDA margin for the entire year and also for the fourth quarter of FY23.

In terms of stock performance, GoodRx GDRX shares experienced a substantial decrease of 20.90%, hitting $4.33 during the last trading session reported.

GoodRx, Q3, Decline, Sales, Telemedicine, Stock, Performance