Q4 2020 Goodrx Holdings Inc Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to the good Rx fourth quarter and full year 2020 earnings call as a reminder, today's.
Conference is being recorded.
And now I'd like to introduce your host for today's call Whitney Natal Rowe Vice President of Investor Relations Ms. Natasha <unk> you may begin.
Thank you operator.
And you and everyone and welcome to <unk> earnings Conference call for the fourth quarter and full year 2020.
Joining me today are Doug Hirsch and Trevor bad debt, our co founders and co chief executive officers and cost environment, and 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 fact should be considered forward looking statements, including statements regarding management's plan strategies Golden objectives, our market opportunity, our anticipated financial performance and the expected impact of COVID-19.
And 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 and the risk factors section of our annual report on form 10-K for the year ended December 31, and our other filings with the Securities and Exchange Commission could cause actual results could differ materially from those indicated by the forward looking statements made on this call any such forward looking statements represent managements estimates as of the date of this call and we disclaim.
Any obligation to update these statements even if subsequent events cause our views per changed.
In addition, we May also reference certain non-GAAP metrics, which are reconciled to the nearest GAAP metric and the company's shareholder letter, which can be found on the overview page of our Investor Relations website at Investor day, Good our dotcom.
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 the call over to Doug.
Thank you Whitney and thanks for all of you for joining us this afternoon.
<unk> mission to help Americans has never been more important.
Over the past year, the COVID-19, pandemic, hobbled and overwhelms, our nation's health care system.
More than 65 per cent of Americans, who are financially impacted by the pandemic, forcing more than one and three patients to skip treatment or medications.
For 150 million people sacrifice basic needs to find health care or sacrifice their health care to meet basic needs.
Either way these kinds of sacrifices have serious long lasting consequences for both individuals and our nation.
<unk> has always been laser focused on providing Americans with access to the care they need at a price they can afford.
As the crisis unfolded, we rallied to help <unk>.
During the pandemic <unk> launched a host of new products and initiatives that delivered relief to Americans and meet.
We double down on new affordable telemedicine services delivered prescriptions directly to homes and created more savings opportunities for prescriptions medical care labs, and other health care services.
Doing well by doing good has always been our mantra our efforts to help Americans and significantly grow our business. We delivered strong performance in 2020 with fast growth at attractive margins and reached new milestones, including over 25 billion of cumulative consumer savings and our prescriptions transactions offering alone.
A record number of monthly active consumers.
And the two X increase of subscribers on our platform.
In addition to these exciting business milestones, we donated approximately one 1 million shares valued at over $40 million to get <unk> helps and the fourth quarter following through on the commitment we made at the time of our IPO.
<unk> helps us our charitable initiative to help provide care to people, who simply have nowhere else to turn.
We've also been focused on diversity equity and inclusion within good Rx as we recognize the importance of reflecting the diversity of our consumers within our own organization.
I am proud to report that and just six months, we've tripled the number of women in leadership positions and prioritize diversity and our recruiting.
Today close to half of our team identifies as people of color.
We could not be more proud of the effort and dedication of our team as we continue to build the leading consumer focused digital health care platform.
And we reach more consumers than ever with an improved and simplified user experience and we've just scratched the surface of the massive opportunity ahead.
We believe that there will be lasting changes to the way Americans find and receive health care after the pandemic.
And people have embraced telemedicine and home delivery millions more are turning to the internet to learn about their care and the choices available to them.
Across the health care ecosystem long hidden information is flowing more freely and patients are being empowered to on their health care journey.
<unk> intends to play a leadership role and post pandemic health care, helping Americans reengage with physicians and care to seek help for chronic and new health challenges.
There will likely be a substantial backlog of undiagnosed conditions and neglected preventative care and we will be there to meet our consumers wherever they need help.
We see 2021 is a massive opportunity to bring more value to our consumers and each stage of their health care journey, we remain intently focused on continuing to strengthen our brand and broaden our reach and taking our content and insights for the next level and investing and our platform to launch new products and services.
Much has changed over the past year, but one constant remains our mission to help Americans get the health care they need at a price they can afford and it has never been more relevant.
With that I'll turn it over to Trevor to address key highlights from the quarter and trains and our business.
Thank you Doug Corrects continues our consistent expansion with another year of strong performance in 2020, with 42% year over year revenue growth and attractive 37% adjusted EBITDA margin.
And the fourth quarter, we attracted millions of visitors to our platform growing the number of consumers we serve across all of our offerings and continuing to scale, our subscription manufacturer solutions and telehealth offerings.
Total revenue for the quarter grew 36% year over year to a record $153 5 million with prescription and transactions revenue growing 26%, even with headwinds from COVID-19, and a weak cold and flu season. Other revenue grew 153% year over year, reflecting the continued rapid growth of our other offerings.
Our strong performance highlights for the value we continue to provide for both consumers and key stakeholders across the healthcare ecosystem.
Our expanding suite of offerings provides a broad range of services to consumers throughout their health care journey, and our deep brand building investments are accelerating consumers understanding of how we help.
During the quarter, we helped a record $5 6 million monthly active consumers save on them prescriptions by using good Rx and one of our 70000 participating pharmacies.
Consumers also became subscribers either after saving money through our prescription and transactions offering where during their first interaction with us.
We more than doubled the number of our subscribers during 2020, finishing the year with approximately 800000 across our true subscription programs go direct gold and the Kroger Rx savings scrub powered by good index.
These paid subscription programs provide consumers access even lower prices for participating pharmacies, while generating greater lifetime value for us the.
The growth and our subscribers was fueled by further optimizations around platform integration and user experience, which drove more effective consumer acquisition and conversion.
The new benefits added to <unk> called this year were another driving force behind the subscriber growth.
After adding prescription mail order benefits to go out on the third quarter, we continued to expand the programs benefit from our fourth quarter. Do you include exclusive discounts on online doctor visits through the <unk> App. During the year. We also closed a multi year partnership extension with Kroger, the largest grocery chain and the U S, which offers consumers access to lower prescription prices of Kroger pharmacies.
We remain focused on creating more value for our monthly active consumers subscribers and the millions of visitors who use <unk> and continue to collaborate with our pharmacy and PV on partners to find more opportunities to do so.
The growth and both our prescription transactions and subscriptions offerings was achieved despite headwinds from COVID-19, and a weak cold and flu season. As we look ahead, we believe we're very well positioned to capitalize on the rebound and doctor visits and new therapy starts once health care activity normalizes and consumers resume typical health care purchases during the.
And fourth quarter, we continued to expand our telehealth services, both in depth and breadth, while remaining highly scalable hey, Dr. By good Rx, which we're rebranding as <unk> care now offers over 35 common primary care services available nationwide, including eczema, headache, and migraine and hypertension, we and.
Produced a new refill visit protocol covering over 1000 medications, which addresses the needs of many of our consumers for short term medication renewals.
As monthly consumer demand continue to increase our median turnaround times remain consistent and demonstrating our ability to scale, our custom electronic health record technology and provider network. We also introduced technology that can automatically navigate consumers to the most appropriate telemedicine options, including partners and our marketplace.
On the health offering which includes good oral care and our tele health marketplace covers over 150 conditions and as a secondary entry point for consumers to access our platform.
Finally, our manufacturer solutions offering continues to grow at an incredible rate. During 2020, we grew revenue by approximately Forex, we had record bookings and the fourth quarter. We continued to increase the number of our manufacturer partners and our client renewal rate exceeded 90% from 2020 to 2021.
This offering continues to grow quickly given the pool of high intent purchase ready consumers on our platform and our strong relationships for the wide network of providers manufacturers spent $30 billion annually on advertising to attract patients for their brands, whether they go direct to consumer or through providers <unk> offers a much more targeted and efficient way.
And for them to do both on.
And on the consumer front, 20% of the searches on our platform for brand medications and many consumers already have a prescription and hand.
We also have extensive reach and satisfaction with providers with $2 million prescribers and the U S. Having a patient that is used good rx and and extremely high provider NPS of 86.
We offer manufacturers, both traditional advertising solutions as well as more customized innovative products, whether direct to consumer or through digital and in office channels to reach healthcare professionals.
We are seeing demand for our full product suite to help consumers start and stay on their therapy and to inform health care professionals of new offerings manufacturer solutions provides us with a high contribution since there is typically no incremental consumer acquisition cost given we already have over 18 million monthly visitors to our platform and have ample.
Inventories.
Good rx's pioneering the transformation of health care, we remain focused on increasing our reach and strengthening our relationship with consumers and continuing to build the trusted brand to guide individuals III or health care journey.
Looking ahead, we see many opportunities for further disrupt the industry with new products to make health care more affordable and convenient for more Americans.
And 2021, we continue to be focused on increasing our reach and awareness since about 70% of consumers still are not aware the prescription drug prices vary between pharmacies in.
In addition to investments and marketing we are doubling down on our research and content efforts and we believe the right content and insights further empowers consumers increases engagement drives consumer acquisition, and propels, even faster growth and our manufacturer solutions offering.
We also recently launched new Spanish language options to facilitate the <unk> experience for the Spanish speaking community.
Increasing reach can also be achieved through the expansion of our offerings and new features and the year ahead. We will continue to work on exciting innovative products at the intersection of healthcare and technology. So we can help Americans still additional gaps when it comes to their health care needs.
We also see exciting opportunities to better engage with consumers who are already used correct through both upselling and cross selling and we can upsell by converting monthly active consumers to subscribers and cross sell between our prescriptions and telehealth offerings as we continue to integrate <unk> care and provide more value to our consumers over the last few months we have.
Already begun to reap the benefits of better integration of <unk> into our platform, including the increased attach rate of our telemedicine service to those you think good Rx to fill a prescription for.
And for manufacturer solutions, we're continuing to add new partners and offer manufacturers more innovative solutions. We're working on a significant multi brand partnership with a leading manufacturer, which we hope to formally announce soon on the product front. We are particularly excited about working with our partners to get consumers from a doctor visit to medication and hand and the <unk>.
This fastest way possible.
We believe our 90% partnership for new array record bookings and our fourth quarter and the addition of very strong talent to our sales team position us for significant year over year growth and 2021.
Overall, we're very pleased with our fourth quarter and full year results the growth of our offerings and the continued progress, we're making to deliver more value to consumers throughout their health care journey with every transaction and the good Rx network continues to strengthen our leading platform and trusted brand allows us to reach more and more consumers.
This increased volume drives improved pricing and consumer savings strengthening engagement and further improving already great user economics.
And this allows us to continue to expand our platform and enhance our products further strengthening this hard to replicate virtuous cycle, and we have and and creating an even deeper competitive moat. We.
We believe the years ahead presents an exciting opportunity to reach even more consumers through both our existing offerings and the launch of new services to further disrupt health care and improve affordability and access for all Americans and with that I'll turn it over to Carsten to discuss our financial results and guidance.
Thank you Trevor good afternoon, everyone and thank you for joining us today for.
Our fourth quarter results once again highlight the unique combination of scale growth and profitability of our business provides strong unit economics, the large market and which we operate and our ability to execute and generate strong operating cash flow.
Revenue for the quarter was $153 5 million growing 36% year over year, driven by a continued growth and a prescription offering as well as our newer offerings for.
Prescription transactions revenue grew 26% year over year to $131 $3 million, driven by a 32% year over year increase and our monthly active consumers.
As a reminder, monthly active consumers represent the number of unique consumers, who use good or extra save on their prescription and given months and it does not include consumers of our other offerings such as subscriptions manufacturer solutions and telehealth when presented for a quarter monthly active consumers represent the average of the calendar.
And the quarter.
Our Mac count reached a record and $5 6 million and the quarter, which included mid hundreds of thousands of Max from script cycle.
Group cycle was a small acquisition that closed on the latter part of the third quarter.
So the fourth quarter was the first quarter that Max related Descript cycle have been included in accounts.
We expect script cycle and Max to continue to grow at roughly the same rate as our direct Max.
Scripts cycle, whose revenue is included and prescription transactions revenue is significantly lower revenue and contribution per consumer than our organic Max provide however script cycle further increases our reach and its consumers represent a large incremental user group that has the potential to use other good Rx offer.
Rings and future.
Excluding script cycle for consumer economics for remained largely consistent.
Other revenue grew 153% year over year to $22 $2 million with strong growth from all of our other off range.
The growth of these newer offerings reflects the value they bring to consumers as well as our ability to create multiple entry points into our growing platform, which grows LTV over time.
And as Trevor mentioned, we finished the year with approximately 800000 subscribers were disclosing our subscriber count this quarter to provide a more holistic view over a growing consumer base and to present and another way, we monetize a portion of the millions of visitors on our platform.
Our subscription offering which is rapidly becoming a scaled business is a natural extension of our successful prescription transactions offering.
It addresses the same consumer needs and generally offers even greater savings on prescription medications.
Many times consumers go through the same funnel and searching for prescription prices and if they choose the lowest price they will often become subscribers without ever having been a monthly active consumer.
This is mutually beneficial because we believe that we offer consumers more value through a subscription offerings and they also generate higher L. T V for us and provide better revenue predictability.
As we continue to scale, our subscription offering and it contributes more meaningfully to our financials. We could also see increased conversion from Max to subscribers, which also produces a higher LTV to summarize looking at our total prescription related offerings, we have $5 6 million, Max and our prescription transactions offering and 800.
And our subscription offering.
Good Rx has 18 million monthly visitors and January in addition to monetizing Max and subscribers were able to further monetize a portion of these visitors with offerings such as manufacturer solutions delivering more value to consumers and increasing the scale of a prescription and related offerings.
Turning back to her for Q performance the.
The growth of our prescription transactions and subscriptions offering and the quarter was partially offset by headwinds related to COVID-19.
With the widespread surgeon cases, and resulting lockdowns and restrictions.
Consumers continued to do for non urgent and physician visits.
And this coupled with an unusually weak cold and flu season negatively impacted and new therapy starts and prescription volume and the fourth quarter.
And as Trevor mentioned, we believe we are well positioned to capitalize on the rebound and doctor visits prescription fills and new therapy starts once consumers resume typical health care purchases and start clearing the substantial backlog that has built up over the last year.
Moving down the P&L cost of revenue was $9 $2 million or 6% of revenue compared to $4 $6 million and for 1% of revenue and for 2019.
The increase was driven by provider costs related to a telehealth offerings due to an increase and the number of online provider visits and increase and outsourced and in house personnel related consumer support expense to support our growth and.
And didn't increase and overhead allocations.
We continued to deliver strong gross margins at the mid Ninety's levels.
Product development, and technology expenses were $23 $7 million compared to $9.8 million and the comparable period last year.
This increase was primarily due to continued investment and the team and product as well as an increase and stock based compensation, including awards made in connection with our IPO ex.
Excluding stock based compensation and various items related to acquisitions adjusted product development and technology expense was 11, 2% and revenue compared to seven 8% and revenue and <unk> and 19, we.
We plan to continue to invest and our product and platform with the goal of creating the best consumer experience continuing to scale, our existing offerings and developing new offerings.
All of which are intended to help more consumers in different stages of their health care journey deliver more value to them and increase the lifetime value we generate.
The sales and marketing expenses were $74 $9 million compared to $54 $3 million and for Q and 19, we.
We increased advertising spend by searching for $5 million a year over year and continued to build a strong team with the goal of increasing our consumer base and building the <unk> brand, which we believe will yield positive returns for us long term.
Adjusted sales and marketing expense as a percentage of revenue was modestly lower year over year, making up $46 eight per cent of revenue and <unk> 20 compared to $47 seven.
Percent last year.
We continue to optimize our consumer acquisition spending in light of COVID-19 market conditions and are actively monitoring doctor visits and new therapy starts.
General and administrative expenses were $348 million compared to $4 $5 million and the fourth quarter of 2019.
And the majority of this increase $285 $3 million for approximately 85% was due to stock based compensation expense and associated payroll tax expense related to the nonrecurring co CEO awards made in connection with the IPO as well as $41 7 million of nonrecurring.
Noncash charge related to a charitable stock donation and support a good erect helps our philanthropic endeavour that Doug described earlier and this call.
Excluding these two nonrecurring and other items adjusted G&A as a percentage of revenue was four 1% compared to three 4% and for Q19, with your incremental costs, primarily associated with starting to operate as a public company at the end of September.
And the fourth quarter, we incurred a net loss of $298 $3 million and.
Again, this was primarily due to stock based compensation expense and related payroll taxes of $297 $8 million and the quarter $285 $3 million of which related and nonrecurring co CEO grants made at the time of the I P O.
And the nonrecurring and $41 7 million related to the stock donation.
Adjusted net income was $32 $2 million growing 40% compared to $23 million and <unk> 19.
<unk> EBITDA grew 17% year over year to $49 $1 million adjusted EBITDA margin continued to be strong at 32%, reflecting our ability to deliver profitable growth due to the compelling unit economics of our business and repeat activity on our platform, which remained at over 80%.
Our adjusted EBITDA margin decreased approximately 500 basis points of year over year due to continued investment and product development and technology the growth of our telehealth business and investments and our general and administrative infrastructure all of which I've discussed.
On a quarter over quarter basis, adjusted EBITDA margin decreased primarily due to an increase in advertising spend and a shift of some marketing investments from the third quarter into the fourth quarter as discussed during our third quarter earnings call.
We continued to generate strong cash flow with net cash flow from operating activities and $14 $9 million for the quarter cash.
Cash flow from operating activities was impacted by over $10 million and payroll tax expense related to the co CEO grant as well as some prepaid expenses, we had to make in relation to our operations as a public company and for some 2021 marketing expense.
On the capital investment from our primary investments were related to the nonrecurring one time build of our new headquarters in Santa Monica and as well as additional investments and our platform and products.
Approximately 14 million has been spent to date under new headquarters net of tenant improvement reimbursements, approximately $2 million of which was spent in the fourth quarter.
And while we substantially completed the construction there may continue to be some limited amount of capex hitting our cash flow statement and the first quarter of 2020 one.
We ended the year with $969 million and cash and cash equivalents.
Before turning to guidance I want to spend a moment on the co CEO Awards.
As a reminder, at the time of the IPO, we granted and nonrecurring equity awards of approximately $24 6 million shares for co Ceos for a total expense of $533 million over for years.
A portion of the awards, we're performance based with vesting dependent on the price of our shares and the other portion of his time based.
Performance based portion totaled $322 million of expense and a time based portion totaled $213 million of expense.
As of the end of 2020. The performance based portion of the awards has been fully vested and expensed at $320 million $88 million from the third quarter and $232 million and the fourth quarter.
For the time this portion $53 million of the awards were Expensed in 'twenty, and 'twenty $10 million, and the third quarter and $43 million and the fourth quarter, leaving $160 million remaining to be expense in future periods.
Approximately $91 million of the remaining $160 million will be expensed in 2020 one.
$30 million $24 million $20 million and $17 million and the next four quarters, respectively, starting in the first quarter.
In addition to stock based compensation and we also incurred employer tax expense of $10 $4 million and the fourth quarter and connection with these awards.
We expect another couple of million dollars of employer taxes to be incurred in 2020 one for approximately 1.5 per cent of the $91 million.
And now turning to guidance.
For the first quarter of 2021, we expect revenue of $158 million to $161 million, reflecting 20% year over year growth at the midpoint.
We believe this growth will be driven primarily by a triple digit increase and other revenue.
Momentum and our manufacturer solutions subscriptions and telehealth offerings continues.
We expect our prescription transactions revenue and to contribute for the first quarter growth as well.
Fourth quarter headwinds related to Covid, 19, and a weak cold and flu season and have continued into the first quarter and are reflected on our guidance. We estimate that the lack of flu will have a total negative impact of approximately $5 million on prescription transactions revenue. This winter with the vast majority of this impact.
Felt and the first quarter of 2021.
On a year over year comparative basis, it's worth, noting that Q1, 2020 with an extremely strong quarter for us relative to the Covid impacted Q1, 2021.
The first quarter of the year and a non pandemic environment is typically seasonally strong and that was the case last year. Additionally, we saw some modest pull forward at the onset of the pandemic last March as consumers stockpiled their medications.
We expect other revenue to continue to make up and an increasing percentage of our revenue figure and the first quarter.
On the adjusted EBITDA for and we expect and adjusted EBITDA margin of approximately 30% as we continue to invest and our brand and platform.
As stated in our third quarter's earnings call, we will not be providing specific guidance around or user accounts on a regular basis, it's worth noting that as long as COVID-19 continues to impact consumer behavior around doctor visits and prescriptions are back and subscriber growth may be impacted.
However, we believe that this will be followed by a tailwind from the clearing of the substantial medical backlog, which continues to build.
A recent <unk> study found that in 2020 there almost 1 billion diagnosis visits that did not happen. When this backlog begins to clear and we see pent up demand, we will be there to help our consumers and reengage with the health care system.
Turning to the full year, we expect 2021 revenue of $735 million to $755 million, reflecting year over year growth of 35 per cent at the midpoint.
This assumes the second quarter will still be impacted by COVID-19, and the health care activity will begin to pick up and the third quarter as a substantial backlog of 1 billion visits will begin to clear significantly adding to visit therapy start with prescription volumes.
We expect our adjusted EBITDA margin to be and the range of 30% to 32% with 2021 laying the foundation for future growth of our platform and our brand as we continue to make the right investments to maximize value for consumers.
Company and our shareholders.
And we're building the leading consumer focused digital health care platform and the U S and plan to continue investing our strong cash flows and our platform.
Product user experience and our brand with the goal of creating the best consumer experience and improved health care affordability and access for all Americans.
This is a scale platform with a rare combination of high growth and profitability, we benefit from our strong brand first mover advantage and a decade of experience and relationships that benefit all key stakeholders and our ecosystem and.
And we believe we have only just begun to scratch the surface of a massive market opportunity.
And with that I'll now turn to Trevor for closing thoughts.
Thanks, Kristen 2020 was another amazing year for better and we helped more Americans and ever access affordable health care when they needed it most and delivered strong profitable growth and a very fast pace.
We grew revenue, 42% over 2019 more than <unk> since 2018 and more than five back since 2016, only four years ago. We also grew adjusted EBITDA five times from 2016, reflecting our focus on efficiency as we've grown all while maintaining our extremely high NPS scores with both consumers and providers.
$4 eight operating forget Iraq, and a five star operating for a doctor.
Over the last few years, we've built on the success of our prescription transactions offering.
Producing new offerings to bring more value to our consumers at each stage of their health care journey between our subscription telehealth and manufacturer solutions offerings. Our services now span even more of the health care journey, but we are just beginning our teams are doing amazing work and we are so excited for the continued rollout of new products and services.
For consumers and prescribers, we have barely scratched the surface of the massive market opportunity as we continue to accelerate our transformation of health care for all Americans with the strength of our brand are increasing and reach commitment to our mission and the value. We continue to create for consumers. We believe we are well positioned to win across the four trillion dollars.
Health care ecosystem, and 2021 and beyond Thank you for your continued interest and good racks, we look forward to sharing our progress in the quarters to come and with that I'll now turn the call over to the operator for questions.
As a reminder to ask a question you will need to press star one on your telephone and again Thats Star one on your Touchtone telephone and to ask a question to withdraw your question press. The pound key we ask that you limit yourself to one question and one follow up so do we have time for everyone's questions within the hour.
We have a lot at play.
Please standby, while we compile the Q&A roster.
Our first question comes from the line of Ricky Goldwasser of Morgan Stanley. Your question. Please.
Yeah, Hi, and good evening and thanks for the update first question is around getting back growth and.
And just wanted to make sure that I heard it correctly what was the impact.
Impact from script cycle on the sequential growth from <unk>, two for Q and you.
And you clearly and Dundee acquisition earlier in the year. So is that already included in the guide.
Right.
Ricky and very much for the question yeah.
Yeah.
Step back this time.
One second and the high level, you know and look at sort of on macro and the overall growth.
We delivered.
Amazing performance in 'twenty, and 'twenty wait and sort of 42 per cent year over year revenue growth over five and $50 million sort of this.
The incredible sort of 37% adjusted EBITDA margin.
And with 200 millions on EBITDA, we've hit a lot of new milestones, including sort of that record sort of $5 6 million Mac and we're really happy to now be talking about the numbers, we paid on subscribers, where we've doubled our subscribers, reaching 800000 subscribers and sort of the 18 million visitors also so we're really excited about the.
The growth and profitability that we demonstrated.
Australia and continue to demonstrate and so I'd like to turn it over to Carson and who can speak about specifics of.
The Mac on script cycle.
Hey, Ricky yes, thanks for the question and thanks for turning it over Trevor as well Ricky with respect to our Mac count Yeah, we hit five and 6 million and the AR and the quarter and of that $5 6 million a mid hundreds of thousands of them on Max.
And.
And we did not include those action guidance previously to your question because the acquisition just closed at the end of the.
Third quarter, it was and we needed some time to work through the calculations. So there are wholly incremental the mid hundreds of thousands to our base of existing Max and.
And we're quite excited about them because they represent both deeper penetration into the market broadly.
And secondly, because they represent users to whom we may be able to sell other <unk> products and services going forward, which is also an exciting reality and I think the final thing that we like about them is that our channel of acquiring script cycled matches, a little different well, we've often had partnerships with the larger pharmacy chain.
And so your script cycle, we got much more access to smaller and regional pharmacy chains and can increase our penetration and that market is that helpful. Ricky.
Very helpful. Thank you.
And then my next question I mean, clearly you're seeing a lot of momentum and manufacturing solutions and Trevor you mentioned, a couple of times and the backlog that you have and sort of that booking number.
Could you maybe give us for updates anyway for us to kind of like quantify the contribution is going to see and in 2020, one and the visibility that it's looking good for you.
Yeah. So you know were really hot.
We're happy with the growth and manufacturer solutions that offer and continues to grow at this high rate we group for X year over year as we continue to sort of help reduce the cost for a brand prescriptions and Q4. We continued building out manufacturer solutions team, we rolled out more of these integrated programs, we've talked about with additional manufacturer.
For the Washington, careful or portals and it was just kind of driven that.
And so we anticipate would sort of be the great and sort of.
Yes, we've made on on these products on these teams and all of the existing users coming to good Rx to access these solutions.
<unk> 2021 will also be a great year for the growth in this area, so karsten and sort to speak of any additional details on that.
And I think you've largely covered it trevor but ricky and the past you've talked about how excited we are about manufacturer solutions, because we feel like we're in significant control on how fast. It grows meeting we already have the users we already have the inventory and the App and it's really a matter and incrementally selling through to the different pharmaceutical.
<unk> and agencies and as Trevor said, the scaling of the team to levels that we haven't previously had and has allowed us to really accelerate the business. We continue to increase the number of our manufacturer partners and our client renewal rates from the existing partners exceeded 90%. So when you combine those two things together.
Other along with a record bookings and the fourth quarter, we believe that 2021 and there's a year that we're extremely well positioned for we also think that as manufacturers continue to evolve and the historical ways of interacting both with H C piece and with consumers and changes post COVID-19 and that work.
Well situated to serve the new reality of how pharma manufacturers interact with those important constituencies.
And we're still only a tiny bit penetrated into tab and you know when you think about it overall this is a $30 billion Tam by our estimation and were just barely scratching the surface of it. So we're really excited about this line of business.
Yes.
Thank you. Our next question comes from Doug Anmuth of Jpmorgan. Please go ahead.
Thanks for taking the questions for.
You talked about the.
The backlog of undiagnosed conditions, and and neglected preventative care and certainly.
And certainly 2021, providing a massive opportunity to help consumers.
Not looking for a product release or anything here, but just curious if you can give us a sense of what kinds of new services you may think about.
Just as you think about the product road map going forward.
And then secondly, I was hoping you could talk a little bit more about the marketing strategy, just kind of coming out of COVID-19 and how that impacts your ability and how youre thinking about leaning and more on marketing as we kind of go through the quarters of 'twenty one. Thank you.
And thank you Doug really appreciate the question and I'm.
And I'm going to handle it and hand it over to Doug.
And I had to answer that.
Hey, Doug it's Doug.
So yes, thank you for asking.
On the overall theme of our product roadmap is we want to help more people and more parts and their health care journey as we've already talked about manufacturer services is wide open for US we already have engaged consumers who are literally and the purchase process and we are excited to continue to deliver innovative and cool solutions that honestly I think just book.
Superior to what you can see otherwise and the market and we just see tremendous potential. There. In addition, we are spending a lot of time and effort working on getting to know our consumers better rate with accounts and subscriptions as you already heard about and a record growth in subscribers, but so that we can actually anticipate what a consumer would need and be there for them before they made it and know that they need. It. So we're really really excited about all of them.
Initiatives that will get us to know our consumers better we've talked a little bit about telehealth, we've had tremendous growth.
Growth in Palo Alto and of course of the year, especially and services like offering refills. When people are out of medications for example, and we're going to continue to invest the time and to just finding affordable and convenient care anywhere where a consumer has a GAAP and god knows and <unk>.
And in 'twenty one all these consumers of this pent up demand and they are open to new ways and we were just very very fired up to participate as consumers emerge from this pandemic and introduce them to new ways better ways to get their health care.
I'll hand, it back at this point to Trevor and maybe handle the marketing question.
Sure.
Yeah. So for marketing we have you know.
We continue to invest in marketing to build sort of our brand and build awareness you know as we've talked about even at the scale, we're operating at and I.
The growth rates were I forgot 70 per cent of consumers don't even know and prescription prices can vary significantly across pharmacy is much less sort of the tools that we are providing and supervised and navigate this complex health care system. So we're going to continue driving awareness for the top of the funnel through various channels.
And then the main way, we get our consumers are still sort of unpaid word of mouth. Just you know the the 90 NPS score and then we have with consumers because we offer a good product.
What drives increased usage, but we're going to double down on the work we're doing around insights for you can talk about more with health care professionals as we've been doing and and we've really started testing out some new channels and things like out of home audio where we've really never advertised and pass, though we see a lot of opportunities across a lot of areas.
Selling and marketing and clothing brand and you.
We're starting to leverage our consumers and their stories you know the stories, we hear from our consumers are very powerful and I'm going to share and amplify those stories, where appropriate. So we started doing a lot of great work on that front led by our new Chief brand officer sign and castles, who has previously seem a range and did amazing work there and so we.
We are excited about all of this continued opportunity on on marketing and making people aware of what we're doing.
Great. That's helpful. Thank you both.
Thank you.
Thank you. Our next question comes from the line of Ross Sandler of Barclays. Please go ahead.
Net.
On.
Bulge. If this was already has just been hopping around a little bit, but and follow up on the marketing efficiency. So it seems like.
Industry wide, Cpm's and digital and we're going to come down.
Fairly short order on the back of idea for and some of these more restrictions.
Around targeting so do you think that could drive.
Better efficiency from your marketing and potentially help accelerate your and your user growth or no and then just high level.
And with consumers engaging with pharmacies at a higher cadence with the vaccine campaign.
Any thoughts on how you might.
Combine that with marketing to accelerate some of the Mac growth. Thanks a lot.
Thank you Ross for the question.
Yeah on the marketing side and marketing efficiency.
And we've been sort of proud of.
And being able to deliver that's extremely good performance.
Performance marketing throughout the sort of history of our business, along with the brand and increasing brand awareness.
And as I mentioned, we've been testing a lot of new.
New channels and finding new areas that that are excellent and work.
And we've really been in a situation where.
Theres a lot more opportunity on this type of marketing and so it's really a state digging and doing more of the driving and so if I. If it's really there drives a CPM is decreasing and weekend and we can use that that's only helpful. But certainly not something we are assuming that needs to happen in any way for delivery.
And the results were per se on the second in terms of more engaging and on the pharmacies.
Yes, we think the that there's a lot of benefits from this increased distribution and vaccine specifically of you know as it transition and this vaccine distribution from some of these more at risk populations to sort of a broader population base I think we're seeing more and more of that distribution going through pharmacies.
Which increases pharmacy foot traffic, which is generally beneficial to us there's a lot of more opportunities to.
And you know to work with the pharmacies are on that and just get more general usage of our solutions from us.
We'll talk a potentially more about more than doing around sort of vaccine.
Alerts and some of the partnerships their large number of 1.2 million people signing up for that program. So all of this law.
You know if it's helpful for driving additional demand as we go through the year and continuing sort of.
Even even more of the sort of great performance, we had and 2020.
And Chris I really appreciate the question.
Thank you. Our next question comes from Justin Post Bank of America. Your line is open.
Great a couple questions.
Firstly, you're you're one of the few companies guiding for the year and just what about your business for the stickiness of your user and gives you confidence and and.
Yours have you been able to hit your numbers and then the second question on the acceleration and the second half when you look at the users as far as frequency or spend what was down. This year that gives you confidence that that will come back as we get to the reopening and the second half. Thank you.
Yeah, So the first and I'm going to actually hand that over to Carsten.
Sure and I'll take the first part of your question, Justin and Great to speak with you again as well.
When we think about our business we have a few things about it that are really attractive to us and make it and somewhat more predictable. The first of course is our.
The reality that over 90 per cent of or transactions are repeats. So that helps us significantly I think the second one is that in relation to for some of the marketing questions that Trevor already answered.
Returns on our marketing are also returns that we now know how to expect and anticipate quite well I think the other important considerations are and we've looked closely at the patterns of what's happened over the last couple of quarters and what we expect to happen over the rest of the year.
Over the last couple of quarters, and I think the combination of a weaker flu season. This year as folks try and less exposed to a regular flu and a heavier COVID-19 had a pretty significant impact, but as you'd expect and we believe that the regular sushi's and which frankly are dragged down Q4 and Q1 revenues.
The Q1 by nearly $5 million of approximately $5 million and that's a passing thing and.
And we also believe that with the onset of more and more rapid vaccinations on the COVID-19 side as well as exiting winter that post Q2, so on the second half for the year that massive backlog and diagnose conditions accuse me of estimates about 1 billion diagnoses didn't happen last year, which is.
Close to 30 per cent of them by their staff, but that'll begin to enroll and as that happened with sheets happens and we see that and it's just a really big tailwind for the latter part of this year for us.
Is that helpful. Justin Yeah, and that is helpful and and maybe one one follow up on other revenue was above our forecast and you know a lot of interesting things going on I'm sure, we're all going and trying to model it and any help and in full.
Full year or for the quarter, breaking down that other revenue and the categories.
Sure I think I'm, we're not breaking it into categories really but what I can tell you is that we continue to see the other revenue growth rate and continuing to grow faster than the core prescription transactions revenue revenue that revenue is growing quite rapidly too, but it's just that the the other revenue.
And as is even faster and like.
We've talked about before and particular.
On our manufacturer solutions business is performing very very well, we're excited about that one.
And <unk>.
When you really look at the combined growth last year, which was $1 53 per cent year over year and for Q.
And we believe that going forward into 2020, one and we're well positioned to produce high growth numbers as well.
So I think across the whole of the whole other revenue a set of businesses and were feeling extremely positive and indeed.
Great. Thank you.
Sure.
Thank you and our next question comes from Nick Jones of Citi. Your question. Please.
Great to one can you talk about the I guess the traction on the mail order.
As Covid restrictions remain tight and then the second question and as we get to the second half for the year.
You know are you seeing anything and some of the states that have already reopened like Texas and there's no mask and all businesses are open and I think there's some other southern states, who have followed that give you confidence and then once things do reopen and you'll kind of see this.
Resurgence and therapy starts.
Great I really appreciate it.
The question Yeah, Let me talk first about now.
Now we have been building some mail order capabilities deliver more value to our consumers who are looking for that option.
We added mail order to both gold and or telehealth offerings in 2020, as we continue to meet consumers, where they are and their health care journey, but you know what.
What I'd add here is mail continues to be the really small percentage of the prescriptions market. We believe we're well positioned.
And to capitalize if that were to change, but like males. Remanded. This similar penetration where on a number of fills basis. If it's a mid single digit percent of the market and even though there's been like a lot of effort over you know over many years from a lot of different players and even with Covid.
People are talking about increases, but these are small increases relative.
Relative to our you know the the actual market and so it's really just a very stable number and so there's a lot of reasons why that part so even though you know.
Covid has been an important option for some consumers during COVID-19 and penetration of more broadly really did not.
Change significantly so we're pleased with the adoption of mail on a platform, but it doesn't and it doesn't directly and make a significant contribution to franchise today, but it's another way to deliver value for consumers and it drives the growth for a subscription offering and it gives another way and across all our tall consumers and increase the lifetime value and most importantly, you know we're just.
Super focused on providing more value to consumers across the broader part of the health care journey.
And really providing the best possible solutions and so for the second question I think let me hand that to Carson to speak to him to take for that.
T H sort of reopening and such.
And I appreciate the question and when we think about two H and particular I think.
We think about the reopening and two and two ways and I'm not sure the existing and trajectory and some of the states that you mentioned are gonna be wholly dispositive. The two ways, we think about or a number one access to resources and cash so things like the recently passed five and stimulus plan is very helpful on that respect.
And then the second way, we think about it as People's desire and willingness to go out and engage heavily with the health care community again to received for the diagnoses many of which are right and that big backlog I mentioned in response to a previous question.
So those effects, one wholly manifest and until the bite and stimulus dollars get into People's hands and until the Covid is sufficiently under control and.
Either true vaccines are just true again, we've seen and the warmer months be better.
And.
Until those two factors happened, which we see happening and the tail end of Q2 and into Q3 and.
And we would expect that that the resurgence will come at or after that point. So again, we don't think the existing patterns across the states fully incorporate the effects that we will see later on and the year.
Great. Thank you both.
Sure. Thank you very much.
Thank you. Our next question comes from gel and dressing of credit Suisse. Your line is open.
Thank you.
I'm wondering if you can expand on your response on made out of question and spend some time on and you know that early observations you have come across on the impact on competitive landscape and opportunities from your point of view from the launch of Amazon Pharmacy, and Al Brian Martin discount card and anything that you can share from your recent conversation with B B M. So far.
And Mr partners since that launch from Amazon.
Yeah, that's a great question and.
As we spoke to we had a record year, including record Mac numbers and the subscriber numbers and we're excited to show.
But you know to.
For your Amazon Prime and you know we've seen no impact.
They continue to push and mail.
And then their effort since you know they bought brought back in 2018, and that's that's continued and we haven't seen anything.
Outside of what they've been doing not aware of anything of material impact on marketing, our marketing strategy and rates performance during the quarter nothing that's showing any change to any of our user behavior and performance, indicating any impact on the business at this time and.
And you know I think as we spoke about.
And we really can't you know, we we we work with our pharmacies for Pbms to develop and rollout more programs too.
And to help consumers and so we've been working on additional programs with partners to continue.
Delivering even more value to consumers. So you know you can see that and some of you know some for some of the additional.
Pricing programs et cetera, and we're rolling out and we've been doing with my partners and you'll see more of this as you look throughout the year.
Okay and my follow up on the just wanted to get your thoughts on pharmacy contextual revenue part of Mack cleanse. It seems all the declining metric and Q4. It was all driven by script cycle. I was wondering if you could help us how should we think about the trend and that metric on a pro forma basis and 2021 and also if you can talk.
About your expectations for that metric and longer term.
Yeah, great and I'll have carsten speak to to that metric.
Sure and great to speak with you again to lender to I appreciate the opportunity when we look at revenue per Mac, It's best to look at it in terms of its components.
The prescription transactions revenue per Mac decreased.
And fishing and scripts cycle.
Mentioned and the scripts.
And as significantly lower contribution per user than organic Max provide.
Good Rx is consumer economics on the broader organic Mac side have been completely consistent with where they've been in the past.
The other component to consider and revenue per Mac more broadly as other revenue per Mac and that number continues.
Grew about 20% Q over Q and 90 per cent.
So quite rapidly indeed.
So to your question on how to think about script cycle in relation to organic Mac, we believe the growth rates across both organic Max and scripts cycles should be roughly similar so that means when we look at the.
And the prescription transaction revenue per Mac on the prescriptions transactions and revenue side, we expect that will or even stay largely consistent as well I think when you look at total revenue per Mac as we said before we're so excited about the other revenue lines that we will see that total revenue per Mac and Kris hopefully that is helpful.
Yep. Thank you.
Thank you. Our next question comes from Sean Dodge of RBC capital markets. Your question. Please.
Alright, Thanks I'm on.
And Ah, Hey, Doctor or I guess, good right from here now.
Give us a sense of how that trended over the quarter, maybe relative to the third quarter and and I guess, what I'm curious about is.
How do you expect and eventual reopening to impact that business day.
And welcome.
Comfortable going back and feeding and doctors and person again is that potentially a bit of a headwind this year or did the uniqueness of hey, Doctor you know a little bit more purpose built a little bit more script focus and it may be insulated from from that.
Yeah.
Thank you for the question and I appreciate it.
Now we've seen a lot of positive momentum with a doctor and we are rebranding it as.
As I mentioned earlier is good Rx care and so we've seen this demand across that and marketplace and we've seen the consumer demand and the visits and Greg you know I'd hate okta for their care continued to increase sequentially.
In 2020, you know we increased the number of conditions, we treated over 150 conditions across all 50 states no. Other option, we increase the cross sell numbers from telehealth subscription offerings.
And just kind of tell us services for gold and.
We're making a lot of product improvements to keep making that user experience better.
We have heard.
When we look around and some things about how telehealth volumes will shift.
And then maybe people and getting sort of the and.
And then the pandemic, who have gone to tell us for something that should be between in person for us where we have so much you know we continue to grow here quickly we have such a unique offering we don't anticipate that that affects our momentum and anyway, we think theres truly sort of a permanent shift, though that's come and post pandemic that will sort of.
That does make it particularly attractive for certain portions of health care and we think we can uniquely provide them more services to our users that help.
Help us.
Facilitate some of these.
How can he is for them and and brought in and sort of where were accessing and providing services for them along their health care journey. So.
We're really excited about this and.
We expect the momentum to continue on and had a great place.
Okay, that's great.
Thank you so much.
Thank you. Our next question comes from Charles range of Cowen Your line is open.
Yeah, Thanks, and thanks for taking the question.
Wanted to ask again about sort of expectations and the second happened and it sounds like what you're saying is that.
You know COVID-19 and the impact of Covid as well as.
The soft cold and flu season, but it sounds like more of a if anything COVID-19 itself is having an impact and keeping people from seeing their doctors and now the expectation is as vaccinations and become more common and and spread out.
And people hopefully go I'll go back to normal that we're gonna unlocked this big wave of pent up deferred care.
And I think that makes all sense as we look at the guidance, particularly on revenue.
How much of that though do you embed into.
Your assumptions here, obviously, you know no one knows yet to the extent that all of this deferred care will be realized just curious and recognizing that it's hard to say now, but you know you know what what have you built into your assumptions here or are you just kind of assuming.
And at baseline was 100 per cent and we're all going to be a.
105 per cent of our baseline or do you think that's going on or are you already assuming some big step up as we get into the third and fourth quarters. Thanks.
Great I appreciate the question and.
One thing I'll just mentioned at a high level as you know so much you know our business has a huge amount of recurring revenue.
A.
And large portion of our users are a REIT are using good or and casino basis, which is one element of predictability and then you know we also have additional predictability relative to how our business for them.
And then you know that's given us great insight into and you know how this performance, but all the Carson and speak to this more specifically.
Sure and and Great to talk to you and Charles and I think as we think about it there've been two factors and late for Q and and even more so and one Q and those are one COVID-19 and and two the weaker flu season because of the weaker flu season, and it's also a bit of a drag and we take our cost us approximately.
$5 million yourself and revenue.
When we look at the rest of your forecast.
And we compare basically where we are to where we should be or where we'd expect to be and look at that GAAP closing over time, particularly as we get out of the first half for the year and interest of second half for the year. So that's really how we think about it primarily Charles.
Okay. So in other words, it's not it's sort of like where you expect to be where you would've been.
I'm not necessarily saying that it's where we would have been plus some pent up demand and is that a fair way to think of it.
I think the fair way to think of it as a more of a pent up demand or leases.
Clearly the better guidance, but but yeah, I think conceptually it sounds like you could be aligned with where we are.
Okay. That's helpful. Thank you. Thank you.
Thank you on our next question comes from Lloyd Wamsley of Deutsche Bank. Your question. Please.
Thanks, Yeah, I wanted to just ask about the script cycle Max.
Mentioned they monetize.
Big discount to where you monetize your core good Rx Max.
Is there is there an opportunity to get that up it was part of the acquisition, we can plug our system in and get that up.
And and I guess do you think you can fully close the gap what needs to happen to get there you know where are you on that path.
And would be the first question and then the second question would just be you know on the gold subscription and as you've as you know.
Integrated mail order and telehealth to the bundle you'll have you seen engagement chain or retention change like any any any further color you can give us on how enhancing the bundle has.
<unk> has changed the I guess the.
LTV CAC type dynamics.
Great really appreciate the question.
On scripts cycles, that's you know and acquisition that we closed on August 2020 for you know a threat.
Relatively small company.
But what I think we spoke to and then.
And we are particularly excited about their and they primarily are partnered with these regional retail pharmacy channel, whereas good Iraq has worked and been more with the larger area. So the main thing there is this additional expansion opportunity.
And these regional regional and smaller farms chain and that we think is quite complementary.
But the main opportunity there we think is the opportunity to grow reached growth scale and to do a lot of cross selling and upselling. So that's sort of how we see that.
That evolving and then for gold and what I would say there is these new benefits and we've been adding you know the the main impact we see from them is that they're driving the driving force behind the strong subscriber growth.
Wondered and 2% year over year subscriber growth and as we've been adding these additional benefits like prescription mail order and benefits for gold in the third quarter.
And in the fourth quarter. We've added these exclusive discounts on on my Doctor visits.
We are able to sort of get better attach between all of our services.
And all of this lets US you know converting users into gold more effectively and continue adding to the benefits. They are receiving so our goal. There is really the liver this broad convenience and affordability to consumers at different stages of their health care journey and have this really tight relationship with.
And our consumers and.
We have this tighter relationship we think you know it enables us to generate this higher lifetime value, which we've already seen and spoken in the past about this meaningfully higher LTV from gold users drive better you know, even even better revenue predictability.
And sort of just continue expanding on cross sell upsell and especially as we take the services. We spoke with you about but also these new and additional services and areas, we're working on them and as.
And we examined and as we help them across cross there, they're there and broader set of needs. So I appreciate the question.
Okay.
Thank you.
Thank you. Our next question comes from Lee Horowitz of Evercore ISI. Your line is open.
Great, Thanks, and I'm, sorry to maybe run back over a couple of things there, but maybe sticking with transaction revenue per Mac. The declines we had in the quarter and will we believe be implied for 'twenty. One just so I'm from nuclear scripts cycled the really the only driver of this both on the quarter and as we look out for.
'twenty one is there anything else that we should be aware of and in terms of kind of fun potential fundamental headwinds to transaction revenue per Mac and then any chance we can get maybe a little bit of a finer point on on what's implied in terms of the scripts cycle contribution for revenue and in 'twenty, one and thanks again for the question.
Thank you very much Lee person.
Hey, Lee Great to talk to you again.
Leach and in terms of a PTR prescription transaction revenue per Mac.
And it would've been effectively consistent with prior quarters, but for script cycle. So.
And I think.
Question, Yeah scripts cycles really the only contributor to shifts and PTR per Mac, So no real changes there and.
In terms of contribution more broadly and we haven't broken out on the script cycle specifics at this point and for a variety of reasons, including including and some.
And somewhat related to the confidentiality of our script cycle deals, but we're pretty excited about the business and we believe it'll grow equally quickly as our base business well so from a modeling perspective or from a blended P. T. R per Mac perspective, I think knowing that both are growing at the same time should help make sure that that modeling.
<unk> can take place pretty accurately.
Great and helpful. Thank you.
And I know probably as much.
Thank you and next question comes from John Ransom of Raymond James Your line is open.
Hi.
Well, we talked to long term investors on and get our ex the one other question. We get is is this really sustainable for some of your retail partners and you've heard a couple of them kind of publicly flow yeah, it'd be a crazy I always and stuff.
And from program.
They could get around these most favored nation clauses with PD on contracts. So I mean do you see like two years from now and you're still going to have the same retail network and you know what is the barrier for say Walgreens and the spread the phone program.
And do it through their loyalty program or Cvs and and how do you sort of keep this retail network and the fold.
Given the pressures on that channel and then the other thing is like the small P. B M. Channel is also under a lot of pressure from the big three who can do everything better and cheaper. So just just kind of sneak if you would strategically to the sustainability of the model because you are kind of between two players and the channel that yeah, we're not.
Exactly for all spring, you know growing and gaining share.
Sure.
Yes.
And I appreciate the question Yeah. So maybe I'll start first and then I'll cover both book Park with the you know with retailers.
We.
And we've been doing this for for for a decade. We believe we are able to continue driving value for the retailers for P. B M. For every member every part of the sort of ecosystem to work every sort of transacted with Ya grows the amount of value, we're really able to provide.
Like.
No retailer programs specifically these have existed since we started you know Walgreens has asked for some programs from since at least since we started this is for our core right and everyone else on you.
You know, we don't we don't anticipate.
Yeah.
This is true just a dynamic is changing and I think you can see programs that we're running a really exciting that.
That driving incremental value like the Kroger Rx savings program powered by good Rx that we offer that does some things and a different way and lets us sort of have even tighter can actually users and really drives value for those retailers and convenient way and so we're really excited there about those programs on the P. B M side, you know we work with all of these events and we work with.
And extremely lar with all the Pbms, we work with them you know from the largest to two two smaller we continue to add P b and relationships and as these P. B M.
And you know relationship grow we're able to deliver them you know more you know more each day.
These relationships only get better for book both sides. So it you know.
We think each of these factors just makes it so the business stronger relationship and a stronger and the value we're able to deliver consumers is even better.
Thank you.
Yeah.
Thank you very much. Thank you. Your next question comes from Stephanie Davis of SBB Leerink. Your line is open.
Oh, Wow and with Goldman calls from glaucoma from.
And it's not quite on.
And following up on Charles and his question was small and small box for a cheaper and Carsten, but you guys mentioned a highly recurring user base.
And that flu headwind effect, both for Q1, Q and Covid affects both for Q1 Q.
Is there anything beyond conservatism and a low single digit sequential growth from for Q1, Q considering it's normally more on the high single to low levels.
Got it and Stephanie Yeah. Thank you for the question and I think personal and this one to you.
Yeah, No that's definitely where we're decently far through the quarter right now.
And given that it's March 11th and and as we sort of look at the quarters.
And as evolution.
The impact of the flu and on.
On the topline has been about $5 million combined and the last part of the fourth quarter and and through first quarter.
And while the transactions are highly recurring the one challenge that Covid does present is that there are folks who don't actually get their new diagnoses. So it doesn't necessarily hit the recurrence of existing transactions, but we're eager to have COVID-19 on why and so all of those new diagnoses come I get made and and.
Coming over to good or act as folks get their medications required to address whatever the diagnosis and so that's why we see ongoing lift, particularly later in the year relative to one Q and and even to Q is that helpful.
No. That's helpful. That's helpful. Maybe following up on that one for trapper and you didn't talk about that improving attach rate between hey, doctor and the prescription business.
Is it still primarily and one way street.
Paid off and the scripts for the prescription platform usage or have you saw for way to close the loop for the existing users that don't have a script and hadn't yet but could benefit from that.
Oh, Yeah. No. This is definitely there's definitely at a two way two way Street and you know where what we're really excited about is Ah is both of those things you know so when we look at the Telus offering. This is on one side you know a secondary acquisition channel, where we can sort of.
Get people in who are you know need a prescription and get them using our all of our solutions you know get them using our prescription and transact conclusions subscriptions manufacturers and we're able to do that and then also and the other direction and so one example of the other direction, which you know is working great is this additional.
Benefit of you know on.
These exclusives are discounted and visits.
Visits for gold members and so we're taking subscription users and driving them into these additional services and so we're definitely seeing sort of increased attach on both sides and sort of great benefits on what part of it and this is really an area and we think we'll continue to make lots of progress on cross selling upselling between all of our <unk>.
Areas and so on.
Yeah.
You know I really appreciate the question.
As we and I just wanted to sort of highlight that we are really happy with this and amazing sort of performance we believe in.
And 2020 with this 42 per cent year for your revenue growth and.
You know with the great quarter, great year, and most importantly, the value we've been able to provide to consumers and and we we are only scratching the surface of this sort of mass and 800 billion dollar and near term market opportunity and there's so much room to go further into that sort of even larger for trillion dollar and health care market and so for.
Super excited for the quarters here to come this year and.
The day performance and a new product and services.
That and you'll see it so we really appreciate everyone's time.
[laughter].
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
Yeah.
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