Ladies and gentlemen, thank you for standing by, and welcome to the GoodRx First Quarter 2022 Earnings Call. At this time -- 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. Ms. Notaro, you may begin.

Thank you, operator. Good afternoon, everyone, and welcome to GoodRx's earnings conference call for the first quarter of 2022. Joining me today are Doug Hirsch and Trevor Bezdek, our Co-Founders and Co-Chief Executive Officer; and Karsten Voermann, 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 facts 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 quarterly report on Form 10-Q for the quarter ended March 31, 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 shareholder letter, 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 Doug.

Good afternoon and thank you all for joining us today. When Trevor and I started GoodRx, our mission was clear. We knew we had to help Americans get the health care they need at a price they can afford. To build a strong and sustainable business from the ground up, we knew that both the product and the team would be key to our success. Fast forward to over a decade later, GoodRx has become a trusted brand that is led by both consumers and health care professionals. GoodRx was also recently named to TIME's list of the 100 Most Influential companies of 2022. This recognition is a testament to the amazing work and extraordinary impact of our team. It's exciting to think about how far we have come. GoodRx' unique, proprietary and extensible platform has now saved consumers a cumulative $40 billion. Our curious, passionate and highly motivated team is now, with the addition of vitaCare, almost 1,000 strong and we have a highly profitable business, growing 27% year-over-year. We believe the opportunity ahead is significant, and we're just getting started. That is why I'm thrilled to announce that we're continuing to bolster our leadership team with a number of new hires we've made in the past few months. Raj Beri will be joining GoodRx' Chief Operating Officer later this month; and we've recently welcomed Mark Hull, our Chief Product Officer; Vina Leite, our Chief People Officer; and Scott Paul, our SVP of Healthcare and Consumer Innovation. These innovative forward-thinking leaders believe in our vision and share our passion to improve the state of health care in America. We believe their respective expertise and exceptional experience will be invaluable, as we continue to grow and scale our business. As Chief Operating Officer, Raj will lead continued growth and expansion…

Thank you, Doug. Coming into 2022, we set four strategic priorities for the year, increasing consumer awareness and reach; strengthening our healthcare provider relationship, deepening our relationship with consumers; and finally, building or acquiring new platform capabilities, that creates the foundation for additional services and value we can offer consumers, HCPs and pharma manufacturers. As our first quarter results show, we've already begun delivering on these priorities as we continue to evolve our solutions to benefit our users and create LTV-enhancing opportunities. Revenue and adjusted EBITDA were both ahead of our expectations in the first quarter, primarily due to the incredible growth of our pharma manufacturer solutions offering, which was further supported by the continued strength of our prescription-related offerings, both prescription transactions and subscriptions. First quarter performance of our prescription-related offerings was largely in line with the expectations we provided in February. Prescription transactions revenue increased 16% year-over-year, with an average of over 6.4 million monthly active consumers, and subscription revenue grew 59% year-over-year, with over 1.2 million subscription plans. I wanted to spend a moment discussing an unexpected headwind note that impacted us lately first quarter and is impacting our current and expected performance. Recently, we recognized a grocery chain sustained actions that impacted acceptance of discounts from most PBMs for a subset of drugs. This impacted the acceptance of many PBM discounts for certain drugs at the grocery stores, which affected many parties, including GoodRx. As many of the discounts found on GoodRx are provided by PBMs, this issue directly impacted our consumers. Because this started happening late in the first quarter and initially impacted a subset of drugs in a subset of their stores, we experienced an immaterial impact on Q1 prescription transactions revenue that we estimate was roughly $1 million to $2 million based on…

Thank you, Trevor. Revenue for the first quarter grew 27% year-over-year to $203.3 million, exceeding the guidance we provided in February. Prescription transactions revenue grew 16% year-over-year to $155.5 million, driven by a 12% year-over-year increase in our monthly active consumers, which exceeded $6.4 million. This includes the $1 million to $2 million impact related to the gross ratio Trevor spoke to. I'll discuss the expected future impact in more detail in the guidance section. At this point, most of the COVID effect on our business relates to the cumulative two-year impact of smaller new therapy cohorts, which is a much longer period than we expected and affects both new and returning users. We can't make up for these smaller cohorts instantly. Even if the market were fully recovered, acute and seasonal trends like cold and flu had been fully on pace and the availability and effectiveness of the amazing referral engine we've built through physicians and pharmacists had fully rebounded. From a market standpoint, March was stronger than February for both total and new prescriptions, which is a typical seasonal dynamic we see every year. This dynamic was magnified by a weaker than usual January and February due to the January, February COVID spike and some bad weather in February. Flu remained under historical levels. All of these factors were already baked into our guidance. So with the exception of the grocer issue we discussed in great detail today, which had an immaterial impact on Q1, performance on the prescription front was in line with our expectations. As for Q2, it's difficult to evaluate where we stand since our data had quite a bit of noise with this grocer disruption. But based on what we see macro conditions remain largely consistent with March from a new prescription and new…

Thank you, Karsten. In summary, we delivered a strong first quarter that exceeded expectations in many ways and we're making good on our strategic priorities for the year. In Q1, we reached a cumulative $40 billion in consumer savings, grew our highly profitable business and expanded our leadership team to support accelerating innovation. We remain committed to delivering affordable prices so all Americans can access the care they need. We're happy to say that we received positive updates from the grocer and from PBMs over the last few days and indicate progress towards resolution. We are hopeful they will resolve their outstanding issues in a timely way. Looking ahead, we see many opportunities to bring value to more consumers and support more Americans. While we've made amazing progress, we have barely scratched the surface of the opportunity to transform health care in the US.

Thank you [Operator Instructions] First question is from Justin Post with Bank of America. Your question --

Great. Thanks for taking my question. Obviously, this is a new issue. Any insights on why the grocer might have made the change and why you believe others won't follow? And then maybe part B, any issues with PBM volumes where maybe lower volumes would change any of your relationships with PBMs? Thank you.

Great. Thank you very much for the question. Recently -- I'll go to frame the overall issue here. Recently, we recognize that grocer chain had taken actions that impacted acceptance of discounts from most of the PBMs for our substantive drugs. And this impacted the acceptance of many PBM discounts of the grocery stores, which affected many parties, including GoodRx. As we said, we are still building significant discount volume with the grocer, but it's currently substantially decreased from typical levels. It is natural that there is a push and pull between PBMs and pharmacies, and they frequently negotiate prescription do pricing. But usually, this just results in pricing changing over time, which is common, but this negotiation impacting our consumers and financial performance is extremely unusual. We're not aware of any similar PBM pharmacy issues and believe scale is unique, as we talked about earlier. We talked about the uniqueness here and the actions we took to help consumers continue to access discount pricing and save. So, we removed discount price from our platform for this growth while PBMs work with grocer on resolution. They've protected our new user growth from being impacted. New user counts remain very consistent. Pharmacies other than this one grocer showed strong aggregate user growth after we made this change. Many of the grocers competitors saw new user growth rates up over 20% to 30%. However, this has significant impact because returning users sometimes go directly to the pharmacy without first checking GoodRx. And while we expect to reach these users, it will take time and we win our reach them all. As such, we do expect a decrease in our turning users at the grocer. And while new users are moving to other retailers, we believe that PBMs and this grocer have been working to resolve their issues. We've been trying to play an active role in discussion to just ensure that consumers continue to save and as noted, it appears there's positive progress. To your final part of your question about the PBMs, we don't anticipate any particular issue related to PBMs or volumes. Our PBM relationships remain incredibly strong, but I'll let Doug speak to sort of the second part of your question in regards to what the broader -- sort of the broader topics.

Thank you, Trevor. As Trevor mentioned, PBMs and pharmacies maintain complex relationships. While they ultimately need to partner to sustain their businesses, complex contract negotiations can impact consumers at the pharmacy counter. You may remember dispute between a well-known PBM and a large retail pharmacy in 2011. In that instance, the two sides came into terms because ultimately, it's really just in everybody's best interest. We do not expect similar issues to materialize at pharmacies with significant volume. These pharmacies value our significant reach with millions of monthly users and continually express interest in deepening their relationship with us. Just some examples, we are working with Walgreens to leverage their broad brand recognition amongst consumers and we just shot in advertisement in one of their stores. We recently worked with CVS on an integration that allows GoodRx users to book many clinic appointments right on the GoodRx platform. Rite Aid joined our gold network in the second half of last year. And we're in active discussions with most retailers on a variety of new initiatives and additional ways to drive business. It's important to reiterate that our new user accounts are stable and other pharmacies are seeing significant increases as GoodRx consumers move through different pharmacy. One of the best ways that we can protect ourselves from future disruptions between PBMs and pharmacies is to continue to strengthen our relationship with the millions of consumers and HCPs who come to GoodRx and that's exactly what we're doing. With the addition of Raj Berry, who led a large part of Uber's consumer experience; and Mark Hall, who held senior positions of Meta and LinkedIn, we continue to build trust and guide users to the right pharmacy for them. Events like these ultimately are fuel for innovation, and we are rising to the challenge.

Thank you. Your next question comes from John Ransom with Raymond James. Please go ahead.

Hey, I know you guys are going to get a million questions on this, but am I just to understand this dispute as this grocer just blew up all of their contracts all at once and this eventually, I guess, would have to get resolved. And assuming it does get resolved, what's the scenario under which things don't go back to normal and things do go back to normal? And then my second part, which is kind of a follow-on is, you guys are ratcheting up your spending and hiring a bunch of people and continuing your great marketing as if the revenue picture was unchanged. So is this implying that you think this is a short-term issue, or do you think this could be a permanent issue but you're just going to run lower margins and profits for the time being? Thanks.

Sure. Yes, thanks for the questions. We are looking at this issue. Maybe I'll talk first about resolution and then just talk about in the current status, and then I'll let Karsten speak about the broader picture. We've heard the grocers and PBMs continue to have constructive advanced conversations. We're a marketplace. So while we don't set prices and are not a party to the agreement, we've been trying to be helpful to ensure consumers can save as many pharmacies as possible, and we received positive updates from the grocer and PBMs over the last few days that indicate progress resolution. In the meantime and because we continue to put consumers first, we're offering competitive prices in other pharmacies. So as mentioned, new users are moving to different pharmacies. The new user counts on GoodRx remained very stable. And competing retailers to this grocer are saying 20% to 30% increases in new users. So we are communicating with existing users providers our product and marketing to ensure they are aware of situation, continue to save the pharmacies, but we believe there's true positive progress there and anticipate this will be resolved soon. But I'll let Karsten speak to other spending and such.

Hey, John, it's Karsten. A couple of things. First of all, I think your core assumption going in, I think you phrased it as blowing up relationships with a number of PBMs at the same time. It's -- as Trevor said earlier on, it's quite unusual for something like that to happen. And that is a reasonably accurate characterization of the situation, I'd say. In terms of impact, yes, the revenue impact we talked about earlier on is a manifestation of what we -- how we expect the situation to potentially evolve. Right now, new user growth should remain largely unaffected. And what we've seen after taking action is that we can be highly effective at moving new users to other pharmacies. In fact, many of the groceries competitors saw new user growth rates of over 20% to 30%, offsetting new user decreases at this grocer, and it specifically goes to your marketing point because with new user growth rates or new user acquisition more pointedly and specifically continuing to be robust, it means that continuing to market makes a lot of sense. I think the real issue is that we have strong repeat activity, as most folks on this call probably know, which is a good thing. But some of those repeat users don't check GoodRx every time before they go into a pharmacy and hit the point of sale. So we have put communications in front of those existing users as well so they know that they can get great pricing at other pharmacies instead, but it could take more time and be less effective to move the existing users than the new users. And that's why until the issue is resolved, we'd expect to see a slowdown of returning user activity at this grocer. And given it made up just under one-fourth of our prescription transactions revenue, that's a significant amount, which makes it a little tough to estimate the full year impact since that will depend on how and when the issue gets resolved. There's decent positive progress, but there's no full resolution and that's why we're estimating impact assuming resolution does not happen before the end of the quarter. And that's why we said in that case, we may lose up to 75% of the revenue related to this grocer or about $30 million. Again though, it's important to note that this is very unusual, as you put it, again, blowing up a number of PBM relationships at the same time. Number two, we think it's going to impact near term prescription transaction revenue. But given the new user information I shared earlier, we do not believe this impacts the growth rate of the business in future years or the total market size. We're also continuing to see great momentum with our subscriptions and pharma man sol businesses as well. So from those perspectives, too, I think we see strength in the business. Hopefully, that's helpful.

Thank you. Your next question comes from Mark Mahaney with Evercore. Your question, please.

Okay. I'm going to stick with the topic, please. Why would businesses possibly be impacted by this in the future [Technical Difficulty]

Mark, we’re listening you.

Sorry, Mark, this is Karsten. Could you repeat, please? It broke up a little bit. We couldn't understand the question.

I'm sorry. Could you explain why this would impact subscription business growth? And then if this situation isn't resolved, will that impact Q3 and Q4 by the same amount, $30 million?

Let me answer the first part in regards to subscription, and then I'll let Karsten speak to Q3 and Q4. We have limited impact on our subscriber base, because this revenue is based on subscription fee, we expect a limited impact to subscription revenue, if any. Gold subscribers have options that are good or better than other retailers, and we continue to serve them, deliver savings to them. Gold performed better than expected for Q1, and we expect the strong performance of the subscription business to continue. Karsten, do you want to speak to.

Sure. Yes. Mark, we -- I think you're sort of extrapolating somewhat linearly the impact when you said, hey, could this be $60 million in the second half of the year. I think we're intentionally not guiding for the full year because, again, as Trevor articulated in some of our prepared remarks, when these issues crop up, there's a strong incentive for all the parties involved to resolve them quite rapidly. And in that context, while that would potentially imply linearity, it doesn't completely. I think the other piece of it is that the issue itself manifested over time. So given that it manifested over time, not all at once, the impact even in the quarter are completely linear. So at the beginning of the quarter, they manifested less, for example. At this point, it's really tough to estimate the full year impact since that will really depend on when the issue gets resolved. And there is positive progress, but there's no full resolution today. And that's why we're assuming that resolution doesn't happen to provide a 2Q guide that people can use for modeling purposes. Again, could be more progress and like Trevor said, issues like this don't usually stay around indefinitely.

Thank you. The next question comes from George Hill with Deutsche Bank. Please go ahead.

Yes. Good morning guys. I'm going to take PBM relationships for 500. And I'm going to -- can you dig a little bit deeper into, I guess, my questions are with the grocer, is it all PBMs? And can you speak to -- can you put any more color on like what types of discounts are we talking? Is this regular PBM discounts? Is this DIR fees? It's like I'm trying to figure out what is kind of the source of the frustration between the grocer and the PBMs. And can you talk about which subset of drugs we're talking about? I guess any color that you could provide on those three factors, I think, would be helpful.

Sure. And you win for my favorite phrasing question. Yeah, while we do not all the facts based on what you're saying, the growth of recent actions related to the contract to see if the grocer is having with certain PBMs related to pharmacy economics. You mentioned DIR fees. There aren't -- there aren't really any DIR fees related to our business. So it's not related to that, but just other parts of the economics. This is limiting acceptance of many programs as grocer pharmacy. This involves, to your point, essentially all PBMs. So this is across the vast majority of PBMs. And that loan makes it incredibly unique. In the past, we have seen pharmacy negotiate change pricing of one or two PBM at this time. In this case, this grocer is negotiating with almost all PBMs at the same time and that effectively meant that discount pricing became unavailable to consumers at the same time. As Doug mentioned this an issue of this magnitude is very infrequent. It's happened in the PBM pharmacy issue that Doug raised around 2011. In that instance, historically, PBMs and pharmacies do come to terms on how to work together. And the indications we have is that our priorities are making active progress here.

So then, I just want to make sure I understand it right. So this grocery chain basically just opted out of every PBM network. And I know you guys are exposed to DIR fees. I used it as an example of like, could it be an unintended consequence, where these guys are opting out because of a problem with X. And they opt out because of a problem with X and the impact is also a problem with Y which is you guys. I'm trying to kind of understand like the dynamic and how -- whether you guys are part of the problem or collateral damage?

Yeah. I mean, this is largely -- this is an issue in relation -- we're a marketplace. PBMs and pharmacies have their contracts. We show pricing from the PBM relationships. But your characterization is correct. For the non-funded portion of the PBM's businesses, they've left -- they temporarily disrupted, but progress is being made.

Thank you. Your next question comes from Sean Dodge with RBC Capital Markets. Your question, please.

Yeah. Thanks. Doug, so you mentioned communicating with customers impacted by this instance the discounts available elsewhere. So just to be clear, these are individuals that have had scripts filled in those grocery stores before. So they have a GoodRx on file, so they aren't checking the website ahead of time. But how much identifying data do you have on those individuals? How good is that identifying data? And I guess how are you engaging them? Is this just simply sending on a postcard or are you using other means and methods?

Thank you very much for the question. We have a good ability to contact through different mechanisms, most users who have filled up at this grocer. And so in general, we are just trying to make sure across all of our business that people know the best ways to get their prescriptions, to be able to afford their care. We're a consumer-first company. We care about people being able to stay on their treatments that physicians prescribe to them. And so we use a variety of mechanisms, whether that's through our product, through our app, through marketing. We have significant marketing reach. We have significant ability to run direct mail through phones. I actually also heard a story this weekend about, actually a urologist, a high-volume urologist in Los Angeles, where they have been sending patients -- a lot of patients using GoodRx to this particular grocer. And they had heard anecdotally from some patients that it's not being accepted. And so, they're now sending all of those patients to a competing retailer. So because of our strong consumer relationships, because of our strong HCP relationships, because of our super good marketing and ability to target that, we have a lot of different capabilities here. And as noted, on the new user side, new users are moving pharmacies. Our new user accounts remain totally stable and competing retailers seeing -- a number of them are seeing 20%, 30% increase in new users. Thank you for the question.

Thank you. Your next question comes from Sandy Draper with Guggenheim. Your question, please.

Great. Thanks very much. Sorry, I'm going to have to stay on this topic. I'm just trying to -- when I think about the mechanics of modeling, modeling prescription transaction revenue, you've got MAC and then you've got the monthly contribution per consumer. I'm trying to think about this, the mechanics of does this -- I mean, since I'm trying to understand what you're saying, is this basically just drop those active consumers essentially, because they're showing up at this grocer, or does it impact the pricing at all in terms of the actual price per action? And then, I guess, the follow-up to that would be, let's just say magically on at the beginning of the third quarter, this was resolved. Would you essentially get all that revenue back, or is this going to be a scale type? I'm just trying to understand the mechanics of -- in the model, but then also if it is resolved, would it come back as quickly as the revenue is going away? Thanks.

Sure. Thanks, Sandy. I'll jump in. This is Karsten. First of all, yes, this is not a revenue per MAC issue. This is a MAC count issue. To the extent of some of our existing users, as Trevor said, we've been very successful in moving new users, hence the extraordinarily high growth, 20%, 30% plus at competing grocers to the one in question. So, again, MAC quantum, not revenue per MAC or any other sort of take rate dynamic at this point. I think as we mentioned earlier though, when we -- when you're looking at it from sort of a modeling perspective going forward, I think you said, if this is resolved at some particular time, X, does everything immediately go back to normal. I think the only part that doesn't go back to normal is that, certain users who do not check GoodRx before they go to a pharmacy and just show up at the counter, in their case, if those particular users don't check GoodRx first and if we're not directing them somewhere else, then in this interim period, that could impact MAC counts. But that's the largest area of impact, new users we've been able to successfully move. As Trevor articulated, we're focused very hard at moving our existing users to places they can save more money to, as our health care provider partners.

Your next question comes from Charles Rhyee with Cowen. Please, go ahead.

Yes. Thanks for taking my question. Maybe I'll shift away for a little bit here. I think earlier you talked about Rite Aid joining the Gold program. Maybe you can talk a little bit about the impact we should think about for subscriptions in the back half of the year, recognizing you're not providing guidance in the back half. But also you talked about CVS and Walgreens, when we think about users being able to book appointments through the app to a CVS clinic, can you talk about how the economics work there because it's not really taking a take rate from a transaction. Maybe you can talk a little bit more about that. Thanks.

Yeah. Let me start on subscriptions, and then we can cover the other topic. For subscriptions, as I mentioned, we're really excited about the growth of GoodRx gold over the last couple of year, the opportunity ahead. We think we can deliver a lot of value to consumers through the subscription plan and it gives us tighter relationships, better communication, better ability to cross-sell, gives higher user satisfaction, higher LTV. And so the large initiative -- or one initiative here around gold that we talked about is this change we made in the pricing, and the early results across new and existing subscribers are encouraging and are at or slightly outperforming volume expectations despite the higher pricing. So this is the reason we delivered subscription revenue growth that exceeded our expectations in the first quarter, 59% year-over-year compared to the 45% to 55% range we gave last quarter. So we are seeing solid performance there, which I think shows the value we deliver to subscribers. It's very compelling, and we keep extending that service. In terms of the rest of the year, our expectations have not materially changed even in regards to that growth ratio, I spoke previously that we've seen quite limited impact there. And the impact -- so we don't expect an impact to subscriber revenue. It will be limited, if any. I'm now going to hand it over to Doug to answer the second part of your question.

Hey, there. Thanks. Yeah, I just wanted to chime in for a few minutes, you mentioned CVS, MinuteClinic. And it's just a great example of one of the things that I'm most excited about as we continue to extend our platform to help more consumers across more stages of their health care journey. It's -- sometimes, we don't realize all these incredible suite of products that we have, right? We help consumers at the research and prevention stage through healthy Nation that are ex-Health. We help them at the diagnosis phase with GoodRx care. And we help them at the treatment and the hearing stage on both generics and brands through prescription transactions, subscriptions and pharma manufacturer solutions. In each of these categories, we want to meet consumers' health care demands by giving them as many options as possible. So with the CVS MinuteClinic integration, it's just another way for consumers to schedule and receive care in addition to the virtual options that we provide through GoodRx care. So again, very excited about these partnerships and integrations that we're doing, and we're really excited about this relationship with CVS and to be able to help more consumers navigate their health care.

Thank you. Your next question comes from Ricky Goldwasser with Morgan Stanley. Please go ahead.

Yeah. Hi. Good evening. So two questions here. One, just in terms of clarification. Is it now -- is it -- I understand that GoodRx members are not -- the discounts are not honored that grocer. But does this mean that now that grocer, there's no PBM whose cards are accepted, i.e., that grocer now is only cash payment? I just wanted to kind of understand that. And then the other thing, I think early on in the prepared remarks, you said that, that grocer accounts for a quarter of your transaction. So I just wanted to confirm that. And if that's the case, are there any other pharmacies or PBMs or customer groups that account for more than 10% of your transactions?

Thanks. Let me answer the first part, and I'll hand it to Karsten for the second part. For that particular grocer, situation is evolving. I can't speculate about exactly what's happening at the pharmacy counter. But what we do know is the grocer is taking action that's impacted acceptance of discounts from most PBMs for a subset of drugs. So this does not – this acceptance and is impacting the acceptance affects many parties, not just GoodRx. So I'll let Karsten answer the other part of your question.

Sure. Yeah. The – I think the best way to answer it is that with respect to other retailers, we don't see significant overindexing or underindexing equivalent to the retailer that we're talking about, the growth that we're talking about here in particular. So from that perspective, the remaining retail channels generally approximate their share with GoodRx as they have in the market broadly. With respect to PBMs, our concentration has decreased year-over-year-over-year. Back a couple of years, we’re talking about having three PBMs so that comprise close to half of our volume. That's now shrunk dramatically as or little filings as you'll see, we come down to a point where there are a couple of PBMs that account for just over 20% of our volume, so significantly less concentration than before. So yeah, it's reflected in our Q, and there are only two of them that represent more than 10% of volume at this point with the top line at 13%. Hopefully, that's helpful, Ricky.

Thank you. Your next question comes from Glen Santangelo with Jefferies. Please go ahead.

Yeah. Maybe if I could just follow up on Ricky's question. I mean, in your K, those two PBMs that represent 13% to 11% of your revenue, so that's $96 million and $82 million. It just seems crazy to think that those couple PBMs could account for 25you’re your transaction volume with one grocery store. I mean that's like CVS and Walgreens market share numbers. So it just seems odd that they kicked all those PBMs out at the same time. So I think that's one of the things we're all struggling with. But my two questions are really around the profitability. Let's assume this ultimately does get settled. Presumably, right, the PBM may ultimately have to accept some lower profitability. And then I guess the question is going to be, does that roll downhill to GoodRx. So whatever the profit margins were on this relationship, which seemingly is a-quarter of your volumes. I mean are you going to have to accept lower profitability going forward? And then my last question is does this grocer, do they have their own discount card program in place right now? Thank you.

Sure. Let me answer the question. In regards to the maybe economics, when we compare GoodRx to other marketplaces, we believe our take rate is comparable or less than other industries. And the economics we have with the PBMs are generally not pharmacy-specific and our specific economics at this pharmacy are not materially better than in other pharmacies. So for this grocer, we can't speculate on the negotiations between the PBMs and the grocer. But at this point, we do not anticipate changes to our economics. Karsten, is there anything else you'd like to add there?

Yeah. I think there is a question around PBM concentration versus pharmacy concentration. Again, on the PBM side, the PBMs, and we have had a very symbiotic relationship for years there, ultimately our customers and the entities whose prices we promote to consumers. So from that perspective, I think we've talked in the past about GoodRx never having had a PBM terminate on it and us having been successful in acquiring incremental PBM, and those PBM being one of the factors and the economics they give us being one of the factors that over time increased our take rate to some degree. So from those perspectives, we think those relationships are extraordinarily strong. I'm not sure if you had a falloff or if I wholly addressed the question. So if I didn't, please do let us know, Glen.

Your next question comes from Stephanie Davis with SVB. Please go ahead.

Hi, guys. Thank you for taking my question. I'm sorry, I'm going to be one more on PBM bandwagon. But I understand you're not giving firm numbers, but could you walk us directionally through the path out of this grocery PBM conflict? Is this merely a question of waiting for the grocer and the PBM to resolve the issue, in which case they'll have a step function back up and all that could be on the GoodRx coupons, there will just be kind of an automatic, or is this more a matter of growing your prop of business at other pharmacies and moving these existing customers from the grocer to these other pharmacies so we'll see more of a slow build out of this? And as making a quick follow-up, is there any color you can share on how this grocer got to be such a large compensation of volume

Sure. I think the answer is both. We talked about the natural migration that occurs in both naturally and via any actions from our marketing and product that moves users. So regardless of anything else, users do move. We've seen that on the new user side where our new user accounts are constant. People are just filling in different places. Existing just is more gradual. But as we've spoken about, we also believe that we -- existing users can move its step. It's just there's a 30-day and 90-day cadence on prescription sales. We're really focused right now on the product side on building even stronger product capabilities to move people in an even more timely way in months, for example, and making sure that, that happens faster. So that's one side of it, the first side you said. The second side of it is that, yes, we believe that the PBMs and pharmacies are working towards resolution. As I mentioned, we probably -- we've heard updates in the last today and the last couple of days of just what sounds like substantial progress people are making. And so that provides a resolution just in place separately. To your second question of over-indexing, it's true that we over-indexed in this grocer. They had very attractive consumer pricing. And as the marketplace puts consumers first, we've been presenting these attractive prices, which, as I mentioned, led to a relatively high volume concentration compared to market share for this party. And as a marketplace, we source and show competitive pricing from our broad set of PBM relationships. And as prices change, we do expect to see consumers change their behavior and move between pharmacies, which is something we already can see occurring.

Thank you. And your next question comes from Doug Anmuth with JPMorgan. Please go ahead.

Thanks for taking the question. There's obviously just a lot of discussion on resolution here on the grocer issue. I guess just curious just on your confidence level that this is really all about kind of negotiations and pricing that could be more of a strategic shift by the grocer. And then just to clarify, I know you don't have much competition in the space, but it sounds like this is -- this would be impacting all discount cards and programs. Is that correct? Thanks.

Yes. So again, our understanding is that this acceptance issue has affected most PBMs, so affecting a number of parties, including us. There's -- we've spoken already that it's pretty common that price has changed. So in the course of us running this business for the last decade, we've seen meaningful price changes at retailers, where -- and there's a pattern, I'd say, at point, retail grade prices and then get less consumer, and then they then lower prices to get consumers and that goes back and forth. And that's a pretty common pattern, but an actual sort of -- the nature of this dispute was changing this across losses -- loss of PBMs at one time, this is really unusual. And this is more similar to the relatively no dispute between larger PBM and large retail pharmacy back in 2011. And people in that, historically, do come to terms because access for consumers is good and letting people fill. And for us, we want people to be able to get their health care affordably but also conveniently. So we want to give them the most options even. If new users will move rapidly to different places we want the most convenient options for consumers that are possible. And we just care that consumers are getting the best options here.

Thank you. Your next question comes from Steven Valiquette with Barclays. Please go ahead.

Great. Thanks. Good afternoon everybody. So you're not disclosing, which grocery chain, which I guess is kind of understandable. But I guess I'm just curious, can you disclose whether or not it's a publicly traded grocery chain versus private. And since GoodRx is intertwined a bit more with Kroger than most other grocery chains, can you confirm that it's not Kroger at this point? Given the materiality of the situation, I'm sure we're all going to figure it out fairly soon, but just any breadcrumbs you want to throw our way to help figure this might be helpful? Thanks.

Yeah. I think at this time, we just want to say it's a large grocer. Thank you.

Okay.

Your next question comes from Jonathan Yong with Credit Suisse.

Hey, thanks for taking my question. You quantified the revenue impact at $30 million. But I guess, is this the maximal impact that we should expect moving forward, or is there a possibility there could be more? And then just going to your comment about how the grocer has very good pricing, I guess, how do you prevent yourself from being over-indexed to this one grocer in the future given your commentary that they do have really good pricing, because PBM contracts understand how you prevent this kind of moving forward or avoid this situation? Thanks.

Thanks for the question and great to speak with you. As we mentioned earlier, the new user count has been back to normal and is largely unaffected after removing the discounts from this grocer while the PBMs and the grocer are working out their issues and come to resolution. So that drove new user counts to be much higher in other places. And that's been key to our estimation of what the impacts look like, which means the impacts are largely tied to recurring usage at the grocer, so returning users more than anything else. And as we think about that, when we quantify what the potential impact could be, we assume that we do not see us benefiting from the resolutions that the PBM and the grocer might come to during this quarter. And that's why we extrapolate forward and measuring it as the $30 million estimate that we disclosed earlier on. So we think if resolution were to happen in the quarter and if the price is at the grocer in question were attractive, then that potentially creates some upside in our prescription transactions line relative to the $30 million estimate we put out there. So from those perspectives, I think that's probably helpful to your question. With regard to over-indexing generally, I think the issue is, as Trevor said, one where, as a marketplace, as an entity that wants to provide the best prices to consumers if someone has very good prices, that is a logical place to drive them to. I think going forward, we continue to also have more and more tools to even once consumers begin working with a given retailer, being able to move them to other retailers. So the other strength we have is the opportunity over time to be able to govern where they land. And you see us doing that with new users, which is why these are the retailers not what the question, are seeing 20%, 30% plus increases in volume. And that's one of the tools we can use to make sure that we continue to be able to allocate volume to places where consumers will be best served?

Yes. And what I'll add is we've laid out our strategic priorities. They are to increase consumer awareness. 70% of consumers still don't know that prices might vary between pharmacies, strengthening HBP relationships, deepening the relationships with consumers and then building and acquiring new platform capabilities. These are what we've been delivering on. In particular, the deepening relationship with consumers, we are doing incredibly well at being able to make new consumers aware of where to fill prescriptions, what to do -- you can see that in the user accounts remaining totally stable, but we are doubling down on the product side on making sure we can react effectively, communicate effectively, make sure we can make sure consumers know exactly what our best options for them, mid-month, immediately in timely ways. So that's a big focus. We have these new executives that we're really excited about that we mentioned, including Mark Hall on the product side, Raj. And this provides -- we'll focus even more on the product side on deepening those relationships with consumers, and I think there's a lot of things we can do pretty quickly there to add even more capabilities.

Thank you. And the last question will be from Stan Berenshteyn with Wells Fargo Securities. Please go ahead.

Great. Thanks for asking -- So clearly, the grocer has had a big impact on GoodRx. But as I think about it from a different perspective, I would presume that GoodRx is driving significant foot traffic to the grocer. So now that you commented you'll be driving foot traffic elsewhere, clearly, those retailers, pharmacies, they'll be getting to incremental foot traffic, they'll get those knock-on benefits from that foot traffic. My question is, is there an opportunity for you to monetize driving foot traffic elsewhere in the retail into a different retail location beyond the take rate. And as an example, just something that comes to mind for me is maybe they pay you, GoodRx, to offer a flat coupon that can be applied towards, let's say, any drug that they offer, so to get additional volume. Is that something that can play out?

Yes. Thank you very much for the question. We've been -- maybe I'll take this in two ways. One, I think, yes, we looked at, for example, helping on specific OTC offerings. We talked in prior quarters about the new efforts we've done around insurance, which is an important part of the consumer journey within healthcare and where we are helping drive people into insurance plans. So -- and Doug spoke about scheduling appointments at CVS MinuteClinic. There's a variety of ways we can drive additional opportunities within those areas. We're also continuing to do a better job of cross-selling our different services. As I mentioned, we -- when we look at Q1, it was an excellent quarter. Subscription is growing very quickly, doing very well. The Pharma Manufacturer Solutions business, which we cross into, is our fastest-growing business. Revenue grew 150% year-over-year. That has incredible momentum in that Pharma Manufacturer Solutions business, and it's doing very well with all of those customers and with providing those solutions. We talk about GoodRx for providers, which is on the path to becoming one of the largest provider platforms in the US We talked about that opt-in rate, the 90% plus opt-in rates for HCPs, and we've continued that great rate of performance. We have 150,000 plus HCPs option the platform through April in the last 90 days, over 500,000 prescribers. So while this immediate issue with this one particular grocer, unfortunately, we have millions of people that come to GoodRx every month for help with their healthcare. We see many, many opportunities to help them. That -- as your question, I think, alludes to, that creates a lot of additional monetization opportunities in the future beyond the already extremely fast-growing businesses of pharma manufacturer solutions, subscriptions and these other areas of our business that are growing at such quick speeds and also being one of the largest HCP platforms, where we are 90 NPS with consumers and providers, all of this provides unique and interesting monetization possibilities, which we are delivering on in -- across these different segments and with different parts of the ecosystem. So I appreciate the question.

Thank you. And with that, ladies and gentlemen, we close our Q&A session and conference for today. Thank you for participating, and you may now disconnect.