Q3 2021 Goodrx Holdings Inc Earnings Call
Ladies and gentlemen, thank you stand by and welcome to the gig or extra requires 2021 or your skull. As a reminder, today's conference call is being recorded I don't like to introduce your host for today's call Lightning of Charles Vice President of Investor Relations Mister <unk> you may begin.
Thank you operator, good afternoon, everyone and welcome to good Axis earnings conference call for the third quarter of 2021.
Joining me today, I dug hearse and Trevor bad deck, a co founders and co Chief Executive Officer at karst environment, Our Chief Financial Officer.
Before we begin I'd like to remind everyone that this call will contain forward looking statements I'll.
All statements made on this call that do not relate to matters historical fact should be considered forward looking statements, including statements regarding management plan strategies goals and objectives are market opportunity are anticipated financial performance and the expected impact of COVID-19 on our business.
These statements are neither promises nor guarantees that involve known and unknown risks uncertainties and other important factors the.
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 sections of our quarterly report on Form 10-Q for the quarter ended September 30th 2021 annual report on Form 10-K for the year ended December 31, 2020, 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.
We disclaim any obligation to update these statements even a subsequent events cause our views to change.
In addition, we May also referenced certain non-GAAP metrics, which are reconciled to the nearest GAAP metrics and accompany shareholder letter, which can be found on the overview page of our Investor Relations website at investors Dot good R X dot 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 the call over to Doug.
Good afternoon, everybody and thank you for joining us today.
In September correct celebrated its 10 year anniversary.
Over the past decade, we've worked hard to create ways to help millions of Americans access affordable care.
Today, we support patients across each stage of their healthcare journey, delivering superior savings trusted information and access to care to millions of Americans, while many companies talk about making the world a better place, making a difference is what we do.
Good R X is now saved Americans $35 billion on their prescriptions and consumer savings have increased to 80% off the pharmacy cash crisis.
We beat insurance over 50% of the time and we continue to increase access to brand drugs for pharma manufacturer relationships.
For many of our users correct is not just about saving money.
Whether they will be able to buy their medication or their children's vindication or not in.
In fact, we estimate that we have help patients obtained at least 80 million prescriptions. They otherwise may not have been able to afford.
We believe that our impact has never been greater than with yet another quarter of record results that our business has never been stronger.
Because of the good R X millions of Americans can now for care because of good R. X millions of Americans are more informed and better prepared to make health care decisions from diagnosis to care delivery.
And because of good R X millions of patients are empowered to navigate the confusing world of healthcare, knowing they have a trusted advocate by their side.
We continue building are broad and deep competitive mode, which is rooted in the trust, we've established with patients physicians and companies across all of health care.
Patients Trust us and our consumer NPS of 90 is a testament to the important role we play in their care.
Physicians and healthcare professionals Trust us with over 2 million prescribers that have a patient that is used good R X and a very high provider NPS of 90.
Companies look to us as a way to introduce products and services and provide savings to our large and growing audience. We worked with more pvm's pharmacy deliver and have continued to strengthen those relationships.
In addition to our 10 year anniversary in September we also celebrated our one year anniversary as a public company, we've made meaningful progress towards creating one of the leading digital consumer healthcare platforms over the last year and have substantially expanded are highly extensible platform to address more of the consumer healthcare journey for more American.
We continued to address more of our Tam by enhancing our prescription savings offering through the acquisitions of healthy nation Rx favor and Rx next launching brand drug integrated copay card expanding our gold network entering into distribution agreements with door Dash USAA, that's rewards and others and establishing a continuing relationships with 95.
<unk> of the top 20 pharma manufacturers in the U S.
We increased our diagnosis capabilities through the geographical and condition expansion of our telehealth services regretted them as good R X care and created a more unified user experience.
We built significant capabilities to support consumers in the research and prevention stage of the healthcare journey through the acquisition of healthy nation and the launch of good health and.
And finally, we made exciting step into the insurance marketplace space through our relationship would go Hell.
This has all been fueled by the passion of our team and unrelenting dedication to our mission.
Despite our success Americans still faced rising costs decreasing life expectancy in poorer health outcomes.
We feel a tremendous sense of urgency to find more ways to help more people and we believe that our efforts can help reverse those trends.
In the coming years, we'll see more opportunities to help Americans feel more gaps of their health care journey, including navigating insurance that they are trusted advocate further personalizing the good R X user experience and extending our marketplace.
We believe that we are just getting started and have barely scratched the surface of the opportunity to transform health care in the U S.
We won't rest until all Americans have access to affordable high quality and convenient healthcare.
With that I'll turn it over to Trevor to address key highlights from the quarter and trends in our business.
Thank you, Doug and thanks to everyone for joining us this afternoon.
I'm proud to report another quarter of strong performance from a record revenue to record adjusted EBITDA and record users the strength of our business is clear.
We grew revenue, 39% year over year to a record $195.1 million and our adjusted EBITDA to $61.8 million.
The margin of almost 32%.
These positive results were not only fueled by the strength and continued growth of our prescription transactions offering, but our ability to expand our platform from a historical focused on prescription discount.
Today, we impact millions of consumers and providers and many meaningful way we.
We have built successful Tam expanding subscription pharma manufacture solutions and telehealth offerings that continued to grow rapidly in the third quarter more than doubling and tripling year over year, respectively. In the case of the first two.
We believe these offerings will continue to increase the LTV of our millions of users as well as the truck incremental consumers to our extensible platform or.
Our provider NPS improved to 90 in the third quarter and our consumer NPS remained high and 90 or.
A strong growth and attractive margin makes us what many call a rule of 70 plus company much better than the traditional rule of 40, which we believe is unique at our site and in our space.
During the quarter, we increased our competitive mode by continuing to add new features and improving the user experience across prescriptions until out increasing our penetration and pharma manufacturers solution announcing an exciting agreement with fetched rewards to be their exclusive prescription savings provider and continuing to deliver on our <unk>.
Mission to help Americans get the health care they need at a price. They can afford we also want to get her ex health, which is the new potentially team expanding focus area for us they were particularly excited about.
Good health is our next generation online health resource, where doctors pharmacists and editorial experts provide authoritative answers.
He was a crucial help questions.
The demand for health and wellness information in the U S is massive billions of users already come to good R. X every month looking for health information and with good health, we want to increase that number even more by.
By adding good R X health to our portfolio of resources, we aim to help more American at every stage of their health care journey for diagnosis to treatment and care.
Correct health allows us to reach more people in more ways through content that empowers them to be advocates for their own health across a wide range of health care decisions.
Could it risks health content focuses on four main areas health knowledge financial guidance drug Faq's and trustworthy original research. It is powered by a dedicated editorial team, including leading doctors pharmacists and editorial expert and aims to tap into current medical perspective with the gold create.
The most trusted and most useful health information resource on the Internet.
We delivered this information and unique format tub ensure consumers can quickly find to health information they need.
<unk> health is kita content strategy, we believe that the addition of good R X helped to our platform allows us to increase top a funnel traffic reached more consumers strengthen our relationships with our existing users and create new opportunities to leverage M&A to provide incremental services and further with LTV as we help address the needs of broader consumer and.
Provider audiences.
We believe good R X health will particularly support the great momentum we've had with our farmer manufacture solutions offered we see a tremendous opportunity to leverage content to help consumers and providers navigate the complex world brand medications and increase awareness access and adherence.
Good R X health is key to this content strategy, which we started executing earlier this year with the acquisition of healthy nation. We believe that the investments we're making your content between good R X health and healthy nation has the potential to continue to drive this offerings steep growth trajectory.
During the quarter. We also became the exclusive prescription savings provider perpetual words further increasing the reach of our prescription transactions offering vets rewards over 10 million active shoppers.
Find good R X prescription savings directly in the Thatcher rewards out, allowing them to seamlessly access good R X discounts on medication at over 70000 pharmacies nationwide. We're excited to partner with Federal Awards, an offer of millions of users a way to save on prescription medications and we see opportunities to expand this partnership in the years to come.
Its rewards represented another relationship that is additives to the direct to consumer acquisition strategy.
Already helped us serve millions of Americans since we launched our platform a decade ago in the third quarter. We help six 4 million monthly I could consumers and one 6 million subscription member save on their prescription medications the.
The combined reach of almost 8 million represents approximately 34% year over year growth.
Our pharma manufacturers solutions offering has continued to grow incredibly fast with another quarter of over three X year over year growth. This.
This reflects our brand strength with consumers that are deep relationships with a health care providers that manufacturers seek to leverage approximately 25% of our platform visitors or health care providers, who have rewarded us with a 90 Mds and over 400000 doctor off to distribute correct materials, which are some of the reasons, we were 2 million.
Labour have a patient who has used correct.
During the quarter, we continued to increase our program manufacturer brand of nutrition and started building a promising bookings pipeline for 2022.
We have entered into an exciting agreement with Covermymeds to further affirm a manufacturer Susan's business. This is a joint go to market effort to create custom prescription discounts for consumer supported by the farmer manufacture. This opportunity includes joined commercialization as well integrated technology components create a seamless experience for patients per.
Wider and pharmacy that provides a patient tools and support most relevant to theirs because that attorney to get on and stay on therapy.
Covermymeds the leader in Biopharma supported solution for patient affordability and as a leader in consumer affordability solutions, we see this as a natural partnership.
We're excited about the progress, we're making to help increase consumer awareness access and periods related to brand medications.
Good R X care continued to revenue consumers with a three X increase in demand since the onset of the pandemic and a delightful user experience with five star operator.
<unk> focuses on low cost prescription associated conditions and provides another entry point for consumers to access are highly extensible platform at a critical point in their healthcare journey approximately 65% of good R. X care visits are driving incremental revenue through our other offerings up from 30% earlier this year.
By providing consumers with a quick and easy way to see a licensed medical provider for a range of primary care services care helps consumers save time and money, while keeping them and the good R X ecosystem. We believe this cross-sell increases consumer lifetime value.
Before I turn it over to Kirsten to discuss our financial results and guidance I'd like to speak to some market trends that impacted our expectations.
The last 20 months of Covid have certainly been unprecedented and I'm proud to say, we have successfully navigated her way through much of the uncertainty our third quarter record results are a testament to our ability to succeed and to increase our share of the market, even though kovats effects have remained longer than any of us expected with that said it continues to be challenging to predict health care utilization.
Trends I made the pandemic.
Earlier in the year when the country largely reopened after the vaccine became more widely available we expected that health care utilization would rebound to pre COVID-19 levels and beyond with normal seasonal trends around flu and acute medication returning in the second half. However, what we have seen so far as it continued diagnosis backlog, reflecting a lag.
Ordinary with health care utilization recovery as well as volatility in the recovery pattern, whether due to a physician office capacity limits. The emergence of new variant people electing to perfectly care and a variety of other reasons, which we believe are largely temporary while the exact timing remains uncertain. We continue to believe the unwinding of the diagnosis.
Will serve as a fuel for fast future growth.
We are continuing to the platform, we believe delivered significant value to consumers in an area of their life, There's nondiscretionary and critical and believe we are very well positioned when utilization does increase in regular healthcare usage and patterns for them.
As we reflect on the quarter and our broader mission I couldn't be more proud of our strong results and the progress we're making toward our goal of filling more gaps in healthcare.
We are just getting started and see exciting opportunities to expand our platform and range of services over time.
With that I'll turn it over to Kirsten to discuss our financial results and guidance.
Thank you Trevor good afternoon, everyone and thank you for joining US today, the third quarter was another strong quarter for business and continued to deliver record revenue at attractive margins were growing or consumer and provider base deepening our competitive mode and extending our platform.
Revenue for the quarter was $195.1 million growing 39% year over year prescription transactions revenue grew by 25% year over year $255 $7 million driven by a 31% year over year increase in our monthly active consumers, which reached a record $6.4 million.
This was partially offset by a year over year decrease in prescription transactions revenue per Mac related to script cycle in our favour, which have lower revenue per consumer.
Good R X prescription transaction economics of otherwise remain consistently strong.
This is the first quarter that are Mac number includes estimated Rx favor Max Rx favors prescription transactions revenue in my account or dominion minutes relative to good or extra scale.
The Ark favor Mac count as an estimation due to incomplete consumer information. However, it is immaterial relative to good or access my account.
As a reminder, monthly active consumers represent the number of unique consumers who use good R X to save on their prescription in a given month and it does not include consumers of our other offerings such a subscription pharma manufacturers solutions in telehealth when presented for a quarter monthly active consumers represent the average of the calendar months in the car.
Porter.
The active consumers from acquired companies are only included beginning in the first full quarter following the acquisition.
Subscription revenue grew rapidly up 111% year over year to $16.2 million. We finished the quarter with 1.13 million subscription plant in approximately 1.6 million members benefiting from our subscription offerings.
Since our family subscriptions generally serve multiple consumers are subscription counting subscription revenue should provide a more holistic view of her growing consumer base and reflect another way, we monetize a portion of the millions of visitors on our platform.
Looking at our total prescription related offerings, we have $6 4 million, Max and our prescription transactions offering and over 1.6 million members associated with our $1.13 million subscription plans totalling almost 8 million users across a prescription related offerings. In addition to Monetising Maxim subscribers, we've been able to <unk>.
Further monetize a portion of the millions of visitors on our platform with offerings, such as telehealth and pharma manufacturers solutions delivering more value to consumers increasingly scale ever prescription related offerings.
Other revenue grew a phenomenal 177% year over year to $23 $2 million, primarily driven by growth and pharma manufacturers solutions, which makes up a significant majority of other revenue as well as growth in telehealth.
The growth reflected the incredible momentum of our pharma manufacturers solutions offering as well as continued demand for good R X care.
The prescription transactions and subscription offerings continue to face headwinds related to COVID-19, we've continued to grow revenue market share and relationships set the foundation for years of sustainable growth.
I will spend more time discussing recent trend and our expectations for the rest of the year when I speak to our guidance.
In the meantime, we'll continue down the P&L.
Cost of revenue is $11.3 million or five 8% of revenue compared to $7.5 million and five 4% of revenue and three 220. The increase was driven by an increase in Polk forced in house personnel related consumer support expense to support our growth and increases in merchant fees hosting expense.
Isn't allocated overhead.
Product development technology expenses were $35.1 million compared to $15.8 million in the comparable period last year.
This increase was primarily due to continued investments in the team and product as well as an increase in stock based compensation, including awards made in connection with an after IPO, excluding stock based compensation expansion related tax and other items associated with acquisitions adjusted product development technology expense was 11.
49% of revenue compared to eight 9% of revenue and three 220.
We continue to invest in product innovation to create the best consumer experience possible and extend our platform to reach more consumers address more of consumer healthcare and increase the lifetime value of our users.
Sales and marketing expenses were $95.7 million compared to $65.1 million and three 220, we increased advertising spend by $21.4 million a year over year and continue to invest in our incredible team with the goal of increasing a consumer base and building. The good R X brand, which we believe will yield positive returns.
For us longterm.
Adjusted chosen marketing expense as a percent of revenue grew year over year, making up 45.8% of our revenue and three 221 compared to 43.3% last year, when we proactively reduced advertising spend due to the COVID-19 pandemic.
General and administrative expenses were $35.9 million compared to $108.5 million from the third quarter of 2020. The decrease was due to stock based compensation expense relating to the non-recurring cosio words made in connection with the IPO, which was $78.0 million higher than the comparable period last year.
Year, excluding this and other adjustments, including payroll taxes related to stock based compensation.
Non cash in M&A and financing related items adjusted G&A as a percent of revenues, 5% compared to 4.6% in three to 20 with the incremental cost primarily associated with starting to operate as a public company at the end of September 2020.
Net losses, $18 $1 million compared to a net loss of $50 million in the third quarter of last year and was impacted by stock based compensation, a $40 million $21 million of which related to the non-recurring cosio grants made at the time of the IPO and $19.2 million of income tax expense.
The year over year change was driven by $65.1 billion decrease in stock based compensation expense and related payroll taxes, primarily related to the non-recurring Cosio awards made in connection with the IPO.
This was partially offset by an increase to our tax provision, which was 19.2 million dollar expense in the third quarter of 2021 compared to a $17.9 million benefit and the comparable period last year.
Adjusted net income grew 11% year over year to $39.7 million.
Just did EBITDA grew 16% year over year to a record $61.8 million adjusted EBITDA margin continued to be strong at 31.7%, reflecting our ability to deliver profitable growth to the compelling unit economics of our business and high repute activity on our platform.
Our adjusted EBITDA margin decreased by approximately 610 basis points a year over year driven by continued investments in product development technology, an increase in sales and marketing spend and investments in our general and administrative infrastructure as we began operating as a public company.
We continued to generate strong cash flow within that cash from operating activities with $48.6 million for the quarter.
And now turn into guidance for the fourth quarter of 2021, we expect revenue of 212 million to $222 million, reflecting 38% to 45% year over year growth. We believe this growth will be driven by continued triple digit increase in other revenue based largely on the continued momentum.
And our pharma manufacturers solutions offering combined with continued growth in subscription prescription transactions revenue.
On the adjusted EBITDA friend, we expect an adjusted EBITDA margin approximately 30% for the fourth quarter.
Looking at the full year, our fourth quarter guidance and play a full year revenue guidance of $744 million to $754 million with the midpoint at approximately the midpoint of our prior guidance range. We provided on our first quarter earnings call on the adjusted EBITDA from 30% Fourthquarter guidance puts us at the midpoint.
Of the full year, 30% to 32% range, we provided on that May earnings on well.
I think we discussed during our third quarter earnings Paul Covas trajectory as well as the second order impacts that may potentially reduce acute volumes and the 20th 21 to 2022 cold and flu season's impact like last winter create challenges around predicting results.
When we provided a full year guidance during our first quarter earnings call. Our assumptions included a return to normal health care utilization and customary seasonal trends around a cute and flu starting in the second half of the third quarter. We continued to see modest improvements, which a record revenue reflects but we have not seen a return to normal.
All areas of utilization and it is too early to assess the size of the impact of the cold and flu season, which historically contributed materially to a revenue you may recollect, we discussed a flu impact of approximately $5 million last winter.
These effects impacted both initial fills a new prescription and I also reduced our refill volume.
The Covid and cold flu predictability challenge is also contributed to a decision not to update full year guidance during the second quarter earnings call and if we discussed then.
Both because of the unpredictably of Covid and cold flu activity and the fact that people may deferred health care visits into the new plan and deductible period, starting in January 2022, we believe it is prudent to continue to provide a wider revenue range for the fourth quarter. Then we may otherwise have.
Depending on the trajectory through the rest of the fourth quarter. This unpredictable they could impact a result, particularly with respect to prescription transactions and subscription revenue.
Current guidance assumes that as Covid continues to recede, the cold and flu season will revert to hire historical levels and utilization will arrive through year, and though the exact timing and magnitude remain uncertain.
We view Covid related health care utilization effects is temporary and we look forward to the unwinding of the 1 billion plus and diagnosed condition backlog, which we expect to amplify a new prescription and prescription transactions revenue growth in 2022 and possibly beyond.
The other reason for a wider guidance range relates to exciting pharma manufacturers solutions offering it is already our fastest growing offering at over three extra year over year growth and has over 150% net revenue retention with extremely attractive unit economics pharma manufacturers solutions is growing rapidly and has the potential.
For large deals in the fourth quarter, which is typical in this space.
These deals may accelerate growth, even further driving some additional variability in our results.
Consistent with the trend in the last few quarters, we expect our non prescription transaction revenue offerings, which are reflected in subscription revenue and other revenue to continue to make up a higher percentage of our total revenue.
And the third quarter, they made up 20% of total revenue an increase of approximately 400 basis points compared to the first quarter and we expect that to increased by 200 to 400 basis points or more to approximately 22% to 24% of total revenue in the fourth quarter. The reasons for this wider.
Range of mixer comes are similar to those are described around variability both in prescription transactions revenue and farmer manufacturers solutions.
This means prescription transaction revenue, which is driven by Max will make up a smaller share of total revenue is more visitors and Max convert to subscribers and as we continue to grow pharma manufacturers solutions.
Before I conclude one note on our income tax provision or benefit as you can see the volatility in our tax provision continues and after recording a significant tax benefit in the second quarter. We had a 19.2 million dollar tax expense from the third quarter, we continue to expect them predictability in our future tax provision or <unk>.
[noise] amounts due to multiple elements and estimates that impact the interim income tax accounting calculations, one of the most significant elements excess tax benefits or deficiencies, resulting from stock awards. This element is challenging to forecast is generally driven by factors outside of our control such as the stock trading price and.
The decision of employees relating to their award. This is one of the reasons, we're presenting adjusted net income and adjusted tax.
Good or extra his impact has never been greater and with yet another quarter of record results. Our business has never been stronger we were building the leading consumer focused digital healthcare platform in the U S and plan to continue investing our strong cash flows in our platform product user experience and our brand with a goal of creating the best.
<unk> experience and improved healthcare affordability and access for all Americans.
Thank you for your continued interest in good R X, we look forward to sharing of progress in the quarters to come in with that I will now turn the call over to the operator for questions.
Sure.
Ladies and gentlemen, if you had a question at this time. Please press star one on your telephone keypad. If your question has been answered, though you wish to remove yourself from the queue. Frankie Punky, we kind of legal questions that Youre limited to one question and if you have a follow up question you may be joined the queue by pressing sorry, one again your first question.
Ken's on the line at the most of it Anderson Wood Evercore ISI. Please go ahead.
Thanks, so much for the the question I don't know.
You have a nice color on the impact of Covid, and a quarter and sort of what you're seeing in terms of the rebounds and visits can you talk just a little bit more about sort of how how may be the trend continued as delta declined over the course of the quarter and if you could remind us how you sort of think about usage of good Iraq.
For perhaps like cold coffin flu type prescriptions versus something that you would think of maybe more is deferred care type situations. Thanks.
They live right next to the question.
Kirsten could you speak to this.
Sure. He lives with thanks for the Great question and great to speak to you again too.
We're really proud of the results we had this quarter with another quarter of record revenue record adjusted EBITDA and record users, even with the sort of legacy of Covid still hovering over us to some degree.
We think it's a testament to our ability to succeed and increase our market share.
Even with those kinds of headwinds and we have seen modest improvements in prescription volumes, which are reflected in their robust sequential growth.
And we see the market as a whole slowly inching back toward pre COVID-19 levels and I've said, we expect it to take a quarter or two for prescription volume to return fully to a pre COVID-19 level, particularly in relation to acute conditions and new prescriptions.
Even with our expectations that this year will probably see a normal cold and flu season, a more robust won like two years ago as opposed to the one we had last year.
It's important to note that for good or access not only about total prescription volume is also the new therapy starts the mix of acute versus chronic and seasonal translate the cold and flu.
If you recollect last winter when we talked on our calls we've mentioned the week cold and flu season cost us about $5 million in revenue, which is which is significant of course. The other aspect of it is after 20 months of lower new therapy starts through COVID-19 that translates into among other things a lower rate of refills.
Two again, we think that our results occurred in our record outcomes happen in spite of that reality.
As for Cold and flu specifically since you raised that as well the numbers, we're seeing so far look better than last year, but it's a little too early since they're so small at this stage to fully assess the impact again as far as we thought about it from a guidance perspective, with our 38% to 45% year over year.
Revenue growth guide 41, five at the midpoint for the quarter, we're assuming that cold and flu will be back this year with respect to that finally, the other elements that are going to be big pharma manufacturers solutions.
And the contribution of subscription as well as our prescription transactions revenue.
I think we'll see volumes continually increase on the PTR side of the prescriptions transaction side through the rest of the fourth quarter.
And the variability in the queue cold and flu and seasonal trends are things that we expect that this year will will and year to our benefit.
Okay. Thank you.
The most important point those two radar disciplined cover made earlier in the call when the country largely reopened after the vaccine became available we expected health care utilization to rebound to pre COVID-19 level pretty quickly with normal seasonal trends around cold and flu and acute flu and acute as well returning pretty quickly in the second half.
However, what we've seen so far is a continuing diagnosis backlog that reflects lags in certain areas of utilization as well as general volatility and it may take a couple more quarters to the for those to full of.
You too.
Fully smoothed out even with the positive impact of cold and flu.
Hopefully that's helpful apologies for the long answer, but there's a lot of meat and that question Elizabeth.
Thank you. Your next question comes from the lineup, Thailand Racing Credit Suisse. Please go ahead.
Thank you and thanks for taking my question.
I actually wanted to follow up on your good artist helps platform, you'll have the old out I kind of wonder, but understand the benefits that might generate Fatima manufacturers' solution business help us understand how it differentiate good and do you expect to see benefits to your other business as well and the last part of it is that <unk> has an ally have you.
See incremental interest from my new car shows audios bottom of solutions business.
Thank you very much for the question and.
I am excited to speak about good ourselves as.
As we look at what we've accomplished since our IPO a year ago, one of the things that we're really excited about is that we have extended our platform to reach consumers across even more stages of the healthcare journey and so good R. X health is another way for us to advance that effort. We have millions of users who are already coming to good R. X every month to navigate their healthcare and.
And lots of them are looking for health information, so by adding good R X health, we can increase that number we can help even more consumers navigate more stages of this journey.
We find that not everyone has the need to use our prescription related or tell out offerings when they come to the platform, but if we can help them in other ways such.
Such as insight and tools, we start building relationships with them and then we deliver them value.
Overtime. So good R X how is this great online health resource consumers and providers to find answers critical health questions. It has over 2500 videos covering 350 conditions, which we augmented by acquiring healthy nation earlier. This year. It has already made an impact of about 60% year over year increase in our content traffic.
Our newsletter is now reaching 5 million has now reached 5 million sign ups earlier this month.
To your question about farmer manufacturers.
Definitely with good R X have helped drive growth in the apartment manufacturer solution and that part of our business is doing extremely well with the three X more than three X year over year growth that we've discussed it helps us increase awareness access here for being on drugs.
To these.
Other areas it drive volume an acquisition into all areas of our business and this will continue to help us deliver strong results.
Like this quarter with the record revenue record profit record users that we're happy to report.
Thank you. Your next question comes from the lineups on Dodge RBC cancel markets. Please go ahead.
Yep. Thanks, good afternoon.
On the P T R per Mac.
Take right you all of charity has crept up.
The increase there is that just a function of PVM makes you you're driving more volume through PVM that you have more favorable agreements with or is this more.
Same store, driven where you're negotiating more favorable economic maybe when when the PM contract come up for renewal and and ultimately what I'm looking for is it just some help better understanding what kind of runway remains for driving PTR per Mac hire overtime.
Thanks.
Thank you very much Kirsten could you speak to this one.
Yeah, I'd love to and thanks for the great questions on.
<unk> unit economics, and the prescriptions transactions offering have been pretty consistent and increasing on a on a trajectory over time.
We believe that this is really sustainable because the volume we drive her a PVM partners is largely incremental and goes almost directly to their bottom line.
They're good piece of evidence for that is that we've continued to expand our PVM network in our take rate has continued to modestly increase in some mid teams.
Realistically.
The Pvm's I think absent us would have lower revenue in lower contribution as well if you look at it through the lens of PTR per Mac. As you did we see PGM per Mac, increasing with about 1% quarter over quarter compared to the second quarter, primarily because of PVM mix and continued improved economics.
And the year over year basis, <unk>, it looks like it's down, but that's solely due to M&A and elements like scripts vehicle in our favor.
You ignore those PTR per Mac is actually up in the mid single digit percentage points exactly as you've suggested it would be.
It's not really a kpa, we managed to but it's when that happens and manifests given the nature of our relationships with our pbms the volumes, we drive to them and the benefits those volumes give us and ultimately the strength of the business overall, that's leading to drive this volume TR PVM partner.
<unk>.
So we're really pleased to continue.
This trajectory and we expect that we will maintain our strong unit economics and so to your question of a little help I think we would expect that the history historical trends.
That you've seen so far we would expect with those historical trends.
Manifest themselves as well.
Thank you. Your next question comes from the mind Stephanie Davis.
Phoebe, leaving please go ahead.
Hi, guys. Thank you for taking my question.
You have announced a bunch of partnership over the past few months past that chairs scraped bunch going on so I was hoping you could walk us through how we should think about the following unpacks partnerships stuck on the membership side and on the market.
Mmm.
So I appreciate the question.
We want to reach consumers across.
All of the different areas we can.
We're really excited about the growth of our prescription that offering.
We now have nearly 8 million monthly users made up of six 4 million.
Monthly apt to consumers and 1.6 million subscription members and we're just really always looking for additional ways to reach and help more Americans. So given it's one of the ones. You mentioned, we were really excited about the.
<unk> partnership we're announcing this quarter being the exclusive prescription savings provider for Ketchup award, it's the fastest growing consumer loyalty and shopping rewards up in the U S.
Lets us reach there.
10 million active shoppers so the reaches significant and those users cannot find good R X prescription savings directly in the pet shop and this.
This is another great relationship aggregate consumer demand, it's similar to the ones.
You're referring to the we entered into with USA endure dash earlier this year and so these relationships allow us to continue driving this great growth, we're seeing if scripture late offering where we saw users grow 34% year over year, resulting in this record quarter. When we look at this overall, we see demand aggregations of her.
<unk> just being another way to help lower cost of acquisition and reach more consumers through these be efforts and so we're seeing success in these these partnerships as well as through the other ways, we generate demand across that.
Thank you. Your next question comes from the lineup John Nonsense like Raymond James. Please go ahead.
Hey, there.
This is probably for Carson. So then your pork you got it.
What is the estimate for marketing spin.
Kirsten.
Thank you for ever appreciate it.
Yeah, I think when we look.
Fourth quarter, and we look at the guidance generally.
Again, the focus was on top line and from that perspective, I think it's 30 to 45.
41, 42 at the midpoint.
Driven by what we've seen the trajectory of the business so far as it relates to marketing spend specifically, we haven't broken that out in the guidance.
But we expect to continue to make marketing investments consistently with the ones. We made in prior quarters. When we started the year off and we're discussing our guidance even at the end of last year around this time, we had said that <unk>.
2021 would be a year in which we invested heavily in product I'm in marketing and anticipation of coming out of COVID-19, having the deferred or undiagnosed condition backlog recede et cetera, and so that was the focus for and the catalyst for continuing to invest.
And those two areas marketing and product I think from where we stand now to we're looking at a bunch of effects in the first quarter of next year potentially folks are entering a new deductible plan year, they're making decisions about their health care right now and entering into next year.
We see COVID-19 continuing to receive it took longer than we may have expected and been most may have expected. This year earlier, but that it continue to receiving of it will continue to provide us with a nice tailwind and into next year or two and so we want to put enough marketing behind that in the fourth quarter ready to be able.
To take advantage of it so hopefully that gives you a bit of perspective on how we're thinking about marketing and teeing up 2022 and beyond.
Thank you. Your next question comes from the lines of George Hill Shebang. Please go ahead.
Hey, good evening, guys and thanks for taking my question mine is I'm wondering if you are in a position yet to try to quantify what you think the impact of COVID-19 has been in the 20th 21 fiscal year and maybe if you're able to think about quantifying how we should think about the diagnosis backlogs just as we think about what is.
The right jumping off point from from a user's basis and prescriptions basis as we look for 2022.
Thank you very much some question off Carson also speak to.
This concern.
Yeah, George we really see the diagnosis backlog is a pretty huge opportunity actually just today is looking at another chart a physician visits over time and we're running according to what I was looking at today at least a physician visit volumes that are pretty much identical to what they were back in 2006.
<unk> and his subsequent to them having grown in 17, 18, and 19 before falling off again in Covid and so I think generally the the net effect of.
All of that on our view of our business going forward in 22 and beyond in particular is that the unwinding of that backlog just inevitably is going to be a significant tailwind I think the other impact is that even now as we go into the fourth quarter, our belief is that the call.
Flu season will return and more robust form to just given the opening of the economy economy generally.
With respect to.
Specific 22 guidance, we're not gonna do that now, but we are evaluating and analyzing the degree to which.
Both the decreased new prescription starts.
During COVID-19 and the related refills.
Have impacted the business to get a little bit more perspective for ourselves and for all of you to join these calls with respect to 2022, and how 2022 it could be.
Differentially.
Benefiting from a shift back to normality, because we do see not just the initial Phil but the associated refills of having been a drag that we've had to fight through to be able to deliver the record numbers of Trevor alluded to in the call earlier today.
Thank you. Your next question comes from the line done on net J P. Morgan. Please go ahead.
Thanks for taking my questions I don't think he talks about sure scripts I was just hoping you could talk a little bit more about the integration there and how the rollouts going and perhaps how we should think about the timing for some bigger impact there and then secondly, just on manufacturers solutions pretty clear the strength within.
In other revenue just curious how you were thinking about when that business might be able to shift from Ah, mostly fixed fee structure does something that's based more on a on a CPM model overtime. Thanks.
Mmm.
Thanks for the question so first for sure scripts.
We have incredibly deep longstanding health care provider relationships.
For some of the earliest champions of good R. X. We're extremely proud of these deep relationships that we built with health care providers over the past decade, and there are really important driver of consumer awareness.
As we've mentioned in the past there are 2 million prescribers and the U S that have a patient that is you had good R X and according to our survey, 80% of physicians recommend us and good or excellent awareness. Among physicians is a remarkable 88%. So the agreement was sure script creates another exciting way to continue to strengthen that.
Physician relationship and make it easier for.
For healthcare professionals to recommend going to rocks. So by working with <unk>. We can help prescribers make more informed decisions and address prescription cost concerns for uninsured patients and patients has coverage is not available via short scripts with more health care professionals and consumers accident, correct prices and a simple and easy way, we're glad to be <unk>.
Working with Surescripts to support providers at the point of care and while it's early so far we are pleased with the progress of that work with scripts to manufacture solutions are pharma manufacturers solutions offering has continued to grow incredibly fast with another quarter of over three extra year over year growth that reflects the <unk>.
Brand strength, we have we consumers are deep relationship with the health care providers that the manufacturers are also seeking elaborate so last quarter, we talked about the relationships with that we have now with 19 of the top 20 manufacturers. We continue to penetrate those accounts were starting to get.
We're starting to increase it sell through with the 1000 brands.
Additionally that are part of that.
And in the third quarter, we just continued to increase the manufacturer and bandwidth premeditation. We're also excited.
That we are offering these additional solutions such as the agreement we have with cover my meds.
And.
One thing we'd also like to mention on the front of health providers is.
They now make up 25% of our website visitors and the NTS with Acp's has actually increased from the 86 that we were very happy to speak.
Okay before to now and NPS of 90 with health care providers farmer.
Pharma manufacturers loosens, our fastest growing offering has extremely high net revenue retention over 150% very attractive unit economics, and we're not trying to optimize rates right now relative to fix fear such we're trying to get market share. This is a $30 billion tan.
We can penetrate that full tam on both consumer and provider standpoint, and we're just getting started there but it's.
It's going great and growing very quickly and we're very pleased with her progress.
Thank you. Your next question comes from the line at Craig had come back with Morgan Stanley. Please go ahead.
Oh, yes. Thank you it's Craig onto Ricky you can't do that 2021 has been a year of investment how long are you thinking about this into 2022 does does it sustain or are you anticipating more operating leverage as you roll into next year.
Thank you for the question Carson can you speak to this.
Third Craig and thanks Trevor.
Yeah, I think as we look into years to come.
We think the marketing will ultimately provide us with incremental leverage going forward. This really ties a lot too unaided awareness levels, among other things and as I know it awareness levels get better and better each dollar of marketing spend becomes more and more valuable and we've seen very positive trajectory in our unaided awareness level.
Which will be the foundation for that Craig So from that perspective, I think our long term view the business hasn't shifted in terms of being margin accretive both on the marketing side and on the product side of course too.
Product investments made for just a few users are for many many users generally can take the same amount of investment to produce so from that perspective, we are definitely looking forward to being able to leverage a business on on multiple fronts. We also have other lines of business like the one Trevor is just speaking to which is manufacturers solutions and.
That makes up a bigger and bigger portion of our revenues and it's effectively nearly all margin right because there's a sales cost associated with it so that ends up pulling up overall margins for the business too as a share of revenue increases and I think one thing that gets forgotten. Some of the time is that there have been some permanent shifts in how pharma manufacturers address.
Health care professionals in particular like Trevor said, we are incredibly strong relationships with them first champions of good R. X for about 400000 of them have good R X collaterals in their offices. Many many more use good R X.
Trevor unheard, particularly to too then and all of these folks have one thing in common which is they don't love farmer detailed is coming to our offices, especially in a COVID-19 rich environment. That's made a permanent shift to more digitally based marketing biopharma manufacturers, which were benefiting from because we have such amazing ACP.
Access and can offer coordinated messaging that allows foreign manufacturers both to reach the healthcare providers and patients.
Through good R X in the same way. So we're just very passionate and very excited about that and again to your margin question. It's not only about the opex side and leveraging marketing and leveraging tech Slash development. That's also about driving margin on the revenue side through the mix and revenue that will be achieving years to come.
Thank you. Your next question comes from the line of Big fan can send the bolt now dear.
Please go ahead.
Yeah. Thank you for taking the question I wanted to ask about the subscription revenues, obviously, another strong quarter of growth there, but it does look like the year over year growth decelerate it a little bit versed in the last quarter and so I'm just curious to get your thoughts on how we should think about the progression of growth on that line moving forward and as you look at the user base today and what's the realistic.
Mix of subscribers versus Max that you think you can achieve over time based on the utilization behavior that you are observing on the platform. Thanks.
Mmm.
Thank you for the question.
Yeah. Good R X serves millions of consumers every monthly different solutions, we have prescription discounts tell all services pharma manufacturers illusion.
And constant and insights through south as we discussed today and the usage of a platform continues to increase a crease across the board. So we're extremely excited about the strong 68% year over year growth in subscribers across Golden Kroger and the fact that we've reached 1.6 million subscription members were also excited about the <unk>.
34% year over year growth when combining the monthly asking consumers and the subscribers and that's how we typically evaluate consumer reached and the scale within our prescription related offering.
The reason we look at our combined reached is that our goal is really to get users to the product that makes the most sense to them and we test within our final which is largely a similar funnel for prescription transactions with subscription in a way that reflects us trying to get people to the best product for them. So the rate of growth of subscribers will also depend on the pace and which.
We had benefits like mailing discount telehealth and the pace, we expand the Gulf Pharmacy network.