More consumers using its app to buy prescription drugs at lower prices and an uptick in subscribers helped boost GoodRx's revenue 43% to $177 million in the second quarter.
Revenue during the same period a year ago came to $123 million.
The telehealth and drug-pricing comparison software company posted results that beat Wall Street expectations, with monthly active users of its platform growing 36% to reach more than 6 million.
The company closed the second quarter with a user base of more than 7.5 million that includes both its monthly active users and subscribers. It had closed the March quarter at over 7 million.
Prescription transactions revenue grew 32% year over year to $145 million from $109 million the year prior.
Second-quarter subscription revenue grew 125% year over year to $14 million, driven by an 86% increase in the number of subscription plans across GoodRx Gold and Kroger Rx Savings Club as well as a favorable change in subscription plan mix, executives said during the company's recent second-quarter earnings call.
GoodRx, which offers an app that tracks prescription drug prices and offers coupons to get medication discounts, saw record revenue and record profits in the second quarter, Justin Fengler, senior vice president of corporate strategy and business at GoodRx, told Fierce Healthcare.
The company reported $31 million in profit in the second quarter, up 14% compared to a profit of $27 million during the same period a year ago.
"Our prescription transaction business is doing incredibly well and our pharma manufacturing business is up 3 times year over year, representing the company's fastest-growing offering," he said.
GoodRx reported earnings for the quarter of eight cents a share, which beat Wall Street expectations of earnings of one cent per share for the quarter. The company's quarterly revenue also beat the consensus analyst estimate of $175 million.
Operating expenses more than doubled to $177 million, on par with revenue. This was mostly due to higher spending on marketing and stock-based compensation.
Adjusted EBITDA came to $55 million compared to $49 million in the same quarter a year ago. Adjusted EBITDA margin was 30.9% compared to 40% a year ago due to an increase in sales and marketing spend, Karsten Voermann, GoodRx's chief financial officer, said during the earnings call.
Industry wary of Amazon competition
While investors continue to be concerned about competition from Amazon Pharmacy, company executives downplayed the online retail giant's entrance into the market.
"In our entire history no competitor has had a material impact on our growth trajectory," GoodRx co-founder and co-CEO Trevor Bezdek said during the earnings call.
"Companies have tried to copy our model or try different models, but none have been able to impact our business. Amazon has been trying to grow pharmacy delivery business. We believe they have not been successful. Mail-order prescriptions only make up about 5% of fill count in the U.S. even through COVID, mails remained a small piece of overall volume and is now starting to decrease as COVID eases," Bezdek said.
Amazon bought PillPack in 2018, launched Amazon Pharmacy last year and just this week added new drug price comparison tools.
"Our business has never been stronger. We've seen zero impact from Amazon Pharmacy or any other companies that are in the space," Fengler told Fierce Healthcare. "We continue to drive great results and show great growth and we are focused on how we’re can continue to drive value to our consumers."
Opportunities for growth
Bezdek said the company has extended its platform from its historical focus on prescription discounts to offer services to healthcare providers and consumers.
"Today we impact almost 20 million Americans a month, including healthcare professionals who make up about 17% of our website visitors and we've built successful subscriptions, pharma manufacturer solution and telehealth offerings that are growing rapidly, almost doubling and tripling respectively in the case of the first two," Bezdek said during the earnings call.
The company has a presence at more than 70,000 pharmacies.
However, GoodRx said its prescription offering continues to be impacted by COVID-19 headwinds, as many consumers deferred physician visits, increasing the undiagnosed condition backlog among Americans and negatively impacting new therapy starts and prescription volume, executives said in a letter to shareholders (PDF).
The company recently announced an integration with Surescripts to provide doctors and clinicians with more information about drug discount prices for select patients at the point of care.
GoodRx executives also highlighted growth in its pharma manufacturer solutions business.
The platform creates an effective way for pharma manufacturers to reach patients and providers, leveraging GoodRx's almost 20 million monthly visitors made up of both consumers and healthcare providers, as well as the 20% of searches on its platform that are for brand drugs, said Bansi Nagji, president of healthcare, during the earnings call.
"Our analysis shows that among the top 100 branded medications, GoodRx has an average of 10 times more traffic to the drug savings page for these brands on our side, compared to the same brand savings page at the manufacturers’ own websites," he said.
Revenue for that business has grown year-to-date nearly three times year over year and delivered over 150% net revenue retention, Nagji said, adding, "meaning we have grown revenue from the same clients more than 50% compared to the same period last year."
GoodRx works with 19 of the top 20 U.S. pharma manufacturers and with approximately 100 brands across the more than 550 manufacturers in the U.S.
Company executives say GoodRx's technology helps connect healthcare providers and their patients with pharma manufacturers’ information, access and affordability solutions.
The majority of healthcare providers (70%) say high cost is the top reason patients do not pick up prescriptions. Pharma manufacturers spend an estimated $30 billion annually to address these and other challenges either to reach consumers directly or via healthcare providers, company executives said, noting that 30% of all prescriptions are left unfilled due to cost.
"We've been reimagining the way patients and healthcare providers interact with the healthcare system. We currently operate solutions across the awareness, access and adherence patient journey and continue to innovate more solutions," Nagji said.
For the third quarter of 2021, GoodRx expects revenue of $193 million to $197 million, reflecting 37% to 40% year-over-year growth. On the adjusted EBITDA front, the company expects an adjusted EBITDA margin of approximately 30% for the third quarter.
The company did not update its full-year 2021 guidance due to uncertainty.