Q1 2022 Goodrx Holdings Inc Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to the good Rx first quarter 2022 earnings call. At this time as a reminder, today's conference call is being recorded I would now like to introduce your host for today's call Whitney Notaro, Vice President of Investor Relations Mr. <unk>.

You may begin.

Thank you operator, good afternoon, everyone and welcome to good access earnings conference call for the first quarter of 2022.

Joining me today are Doug Hirsch and Trevor bad debt our co.

<unk> founders and co Chief Executive Officer, and Christian is arming our Chief Financial Officer.

Before we begin I'd like to remind everyone that this call will contain forward looking statements.

All statements made on this call that do not relate to matters of historical facts should be considered forward looking statements, including statements regarding management's plans strategies goals and objectives, our market opportunity our anticipated financial performance.

Expected impact of COVID-19 on everything.

These statements are neither promises nor guarantees, but involve known and unknown risks uncertainties and other important factors. These.

These factors may cause our actual results performance or achievements to be materially different from any future results performance or achievements expressed or implied by the forward looking statements.

Factors discussed in the risk factors section of our quarterly report on Form 10-Q for the quarter ended March 31, 2022, and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward looking statements made on this call.

Any such forward looking statements represent 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 to change.

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 investors got good Iraq 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 it over to Doug.

Good afternoon, and thank you all for joining us today.

When Trevor and I started good Rx our mission was clear we knew we had to help Americans get the health care they need at a price they can afford.

To build a strong and sustainable business from the ground up we knew that both the product and the team would be key to our success.

Fast forward to over a decade later that are actually has become a trusted brand that is loved by both consumers and health care professionals.

<unk> was also recently named Time's list of the 100, most influential companies of 2022.

This recognition is a testament to the amazing work and extraordinary impact of our team.

It's exciting to think about how far we've come.

Good Rx is unique proprietary and extensible platform has now save consumers' accumulated $40 billion our.

Curious passionate and highly motivated team is now with the addition of bite of care almost a thousand strong and we have a highly profitable business growing 27% year over year.

We believe the opportunity ahead is significant and we're just getting started.

That is why I am thrilled to announce that we're continuing to bolster our leadership team with a number of new hires we've made in the past few months.

Raj Barry will be joining <unk> as chief operating officer later this month and we've recently welcomed Mark Hull, our Chief product Officer, Nina late our Chief people Officer, and Scott Paul R. S V P of health care and consumer innovation.

These innovative forward thinking leaders believe in our vision and share our passion to improve the state of health care in America.

We believe their respective expertise and exceptional experience will be invaluable as we continue to grow and scale our business.

As Chief operating Officer, Raj will lead to continued growth and expansion of Iraq, well, helping increase value across the prescription business.

He brings more than 20 years of operational leadership experience at fast pace innovative companies, including Uber, where he most recently served as vice president of global grocery a new vertical.

As Chief product Officer, Mark leads product strategy and management of <unk> and is focused on building industry, leading solutions for consumers and providers and pharmacies.

With over 25 years of experience in product management at companies, including meta and linked in he has built world changing products that have had an incredible impact on billions of people.

As Chief people Officer, Nina leaves, our HR strategy and operation She's a transformational HR leader, who brings her extensive experience at global fast growing technology companies, including the trade desk and her passion for employee development engagement to get it right.

As SVP of health care and consumer innovation, Scott works closely with senior leadership on all areas of health care innovation across the ecosystem of consumers retailers P. B EMS providers and drug manufacturers leveraging his substantial health care experience and knowledge.

Scott previously founded apex affinity, where he created and ran many of the large pharmacy discount programs in the market and most recently served as EVP at met impact, where you're focused primarily on consumer savings.

We are very excited to be adding these exceptional leaders to the team and look forward to accelerating better access accomplishments together.

With that I'll turn it over to Trevor to address key highlights from the quarter and trends in our business.

Thank you Doug coming into 2022 we set four strategic priorities for the year.

Creasing consumer awareness and reach strengthening our health care provider relationships deepening our relationship with consumers and finally building or acquiring new platform capabilities that create the foundation for additional services and value, we can offer consumers hcp's and pharma manufacturers.

As our first quarter results show, we've already begun delivering on these priorities as we continue to evolve our solutions to benefit our users and create LTV enhancing opportunities.

Revenue and adjusted EBITDA were both ahead of our expectations in the first quarter, primarily due to the incredible growth of our pharma manufacturer solutions offering which was further supported by the continued strength of our prescription related offerings, both prescription transactions and subscriptions.

First quarter performance of our prescription related offerings with largely in line with the expectations. We provided in February prescription transactions revenue increased 16% year over year with an average of over $6 4 million monthly active consumers and subscription revenue grew 59% year over year with over $1 2 million subscription plan.

I wanted to spend a moment discussing an unexpected headwind, though that impacted us late in the first quarter and is impacting our current and expected performance.

<unk>, we recognized a grocery chain had taken actions that impacted acceptance of discounts from most P. B atmosphere, a subset of drugs. This impacted the acceptance of many P. P M discounts for certain drugs, because grocery stores, which affected many parties, including good Iraq.

As many of the discounts found on good or X I provided by P. P. M. This issue directly impacted our consumers.

They started happening late in the first quarter and initially impacted a subset of drugs and a subset of their stores, we experienced an immaterial impact on Q1 prescription transactions revenue that we estimate was roughly $1 million to $2 million based on our subsequent quantification.

In April this dynamic intensified impacting more drugs and more of the grocers pharmacies, leading to significant loss volume and unexpected greater impact on our Q2 and full year prescription transactions revenue.

We are still doing significant discount volume with this grocer, but is currently substantially decreased from typical levels.

It's unfortunate that this issue impacts our consumers and financial performance since pbms not good or ex negotiate economics with pharmacies. We are not aware of a similar P. B and privacy issues at this time and believe that the scale of the situation is unique.

A unique situation because we're on the path of pharmacy is negotiate didn't change pricing with one or two P. M. At a time in this case this grocery negotiated with almost all P. B arms at the same time. This effectively meant that all discount pricing became unavailable to consumers at the same time.

The Swift action, we took in response to this issue, including removing discount prices from our platform for this grocer what P. B EMS work with this girlfriend resolution protected our new user growth from being impacted new user counts remain very consistent and pharmacies other than this one grocers so strong aggregate new user growth momentum many of this grocery as competitors.

For new user growth rates up over 20% to 30% offsetting the new user decrease this growth.

This issue impacts us, though because returning users sometimes go directly to the pharmacy without first checking go to Rex while we expect to reach these users. It will take time and we may not reach small as such we expect a decrease in returning users at that grocer. We expect this issue to have a material impact on our Q2 and full year prescription transactions revenue to note we have not seen.

Any impact to our subscription and so we expect a limited impact to that revenue if any and do not expect any effect on revenue related to our pharma manufacturer solutions, both of which continue to make up a larger share of our total revenue Carsten will provide more detail shortly when he speaks of the guidance.

While this grocer represents less than 5% of the pharmacies and good Rx network. It made up almost a quarter of our prescription transaction revenue in the first quarter.

Over indexing relative to market share because we had particularly attractive P. B M negotiated pricing as mentioned earlier, our new users are now going to other stores and new user volumes remain consistent even without showing discounts with growth there.

Good or excellent marketplace for drug pricing at retail, we do not set the price of consumer pays instead, we source competitive prices from a broad set of P. P. M relationships prices change over time, but it's because of grocers negotiating with almost all pbms at the same time that has caused this impact well.

While new users or moving to other retailers, we believe the pbms and this grocery have been working to resolve their issues in a timely way.

It is important to note that while this unusual event is expected to impact prescription transaction revenue. We do not believe this impacts the growth rate of this business in future years or the total market size.

We also believe that rising costs in the U S put additional strain on consumers and the needs for savings programs are only going to grow.

For any case, where prices change we have excellent abilities to move new users and our success. There is evident in our new user accounts remaining constant and where we want to continue to improve is ensuring our ability to move existing users through our product and marketing very quickly to the retailers that are best for them.

Overall, we believe we have strong relationships across the P. P M and retail universe, we offer significant benefits to retailers when a good or excuse or goes to the pharmacy. They often purchase other items. According to our internal survey data go directs users by incremental items more than 75% of the time and they spend on average were $40 on that part of their basket. In addition over half of people we serve.

Well it gets switched pharmacies as a result of using <unk> in order to take advantage of good Rx discounts and when they have a good experience using good Rx a pharmacy, 85% say that makes them want to return more often.

Finally, many prescriptions by some estimates about a third are not picked up due to costs often after the pharmacist fulfilled them. We believe good Rx savings mean that more prescriptions are actually picked up generating revenue for in reducing the wasted effort at pharmacy.

The strength of our retailer relationships as manifested in the work we do together we've worked with some of the largest retail pharmacies in the U S on advertisement and other strategic initiatives over the last few months. Most recently, we worked with Walgreens to leverage their broad brand recognition amongst consumers and Sheldon advertisement and one of their stores and.

In addition, rite aid joined our gold offering in the second half of last year. We're in active discussions with most retailers in a variety of new initiatives and additional ways to drive that.

Turning to subscription.

As we discussed in our fourth quarter earnings call. We are strategically repositioning goal our subscription program as we tightened our focus on the people believe we can help the most members with chronic conditions. In addition to offering golf members, even better pricing on their prescriptions and a prescription transactions offering we've added more value to the program over the past year with new benefits, including mail order and disc.

Counted telehealth visits.

To support the repositioning of gold and to more clearly differentiate us from our prescription transactions offering we increased prices for new Gold's subscribers in January .

In March we also began increasing prices to a subset of existing subscribers. This is the first price change to gold since we introduced the program five years ago since new subscriber acquisition and existing subscriber retention are both performing at or better than our expectations. We are rolling out the remaining price increases for existing subscribers. We expect this to be completed by the.

The end of the second quarter.

Accretable and momentum in our pharma manufacturer solutions offering continued during the quarter with 150% year over year growth to help provide more visibility into this exciting offering we've disclosed pharma manufacturer solutions revenue separately for the first time this quarter the value and uniqueness of our solution set and more specifically our unique ability to reach both.

<unk> and providers is recognized by pharma manufacturers.

Evidenced by this rapid growth we are rapidly penetrating the $30 billion pharma manufacturers loosen Tam and we believe we will continue our rapid growth as more and more pharma manufacturers spend shifts to digital and as pharma manufacturers continue to recognize high returns on our marketing investments as they leverage our incredible health care provider and consumer constituencies.

Both of which radar at a 90 M. P F.

Even with the rapid growth of this offering our revenue has not penetrated anywhere close to 1% of the $30 billion department of manufacturer solutions Tam and our relationships with 19 of the top 20 pharma manufacturers position us well for future growth, we expect growth to be driven by more partnerships with more pharma manufacturers more penetration of their brands.

Increasing the number of solutions each brand to play with US. We're also adding more solutions to our consumer and provider offerings and continuing to sell into the HCP opportunity with good or extra providers go.

Good or extra providers create the more customized experience and a quick providers with the tools they need to support their patients through the health care journey with over 750000 prescribers using <unk> since June 2021, and more than 150000, Hcp's, who have opted into the good or extra provider mode. So far.

To further expand our provider offerings, we recently announced the acquisitions of vital care and flip M D.

In April we closed the acquisition of vital care pharmacy services platform that expands <unk> offerings to pharma manufacturers, while helping to improve patient access and adherence to affordable brand drugs.

Over 500 million brand prescriptions that are written per year, only 50% are film.

Site of care helps patients understand their coverage identify available saving opportunities and facilitates provider communications with parents it benefits the HCP community by reducing administrative burden and helps improve the likelihood that patients get on their prescribed therapy.

Platform also offers prescription fulfillment options and manages ongoing patient adherent vital care will enable good R X help more patients receive their prescription and an efficient affordable and transparent manner and stay on their prescribed therapies as long as medically appropriate.

This acquisition gives us unique capabilities to facilitate the brand medications prescription process from start to finish expanding our capabilities beyond our digital platform from the physician's office all the way through the patient pharmacy journey, we look forward to growing our reach across consumers and providers along with our established relationships with pharma manufacturers to help more patients.

Access the brand drugs they need.

The acquisition is expected to further strengthen our rapidly growing pharma manufacturer solutions offering we believe our strong relationships with pharma manufacturers H P. P awareness and loyalty and consumer traffic will drive more growth and adoption of the vital care platform delivering even more ROI at the pharma manufacturer.

During the quarter, we also acquired flip M D a marketplace connecting practicing physicians with the organization seeking on demand medical expertise representing another provider specific solution. We can now offer flip M D as exciting capabilities and we expect to expand our engagement with health care providers and the service is available through our pharma manufacturer solutions offering continuing to differentiate it.

And expand the offerings.

We believe there is an enormous opportunity for us to meet provider of unique needs with innovative solutions, while helping them achieve better patient outcomes.

With our incredible opt in right to a good extra provider's platform. We believe we are on the path to becoming one of the largest provider platforms in the U S. With a combination of good or expert providers and our consumer offerings, we have the opportunity to deliver a truly unparalleled digital health care platform with a unique ability for us and for our partners, especially pharma manufacturers to.

And serve providers and patients in a coordinated fashion.

We continue to broaden in deeper our 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 health care professionals Trust us with a very high provider NPS of 90.

Companies look to us as a way to introduce products and services and provides savings for a large and growing audience. We began the year strong outperforming our first quarter revenue expectations at attractive margins, while growing our user base, including providers. We continue to see tremendous opportunity ahead to continue to revolutionize healthcare for Americans in this massive fortunately in our market as we.

Our platform in a range of services over time with that I'll turn it over to Carsten to discuss our financial results and guidance.

Thank you Trevor.

For the first quarter grew 27% year over year to $203 $3 million exceeding the guidance. We provided in February prescription transactions revenue grew 16% year over year to $155 $5 million driven by a 12% year over year increase in our monthly active consumers.

[noise] exceeded $6 4 million.

This includes the $1 million to $2 million impact related to the gross ratio Trevor spoke to.

I'll discuss the expected future impact in more detail in the guidance section.

At this point most of the Covid effect on our business related to the cumulative two year impact on smaller new therapy start cohorts, which is a much longer period than we expected and the effects of both new and returning users we can't make up for the smaller courts instantly even if the market were fully recovered acute and seasonal trends like cold and flu had been fully on.

And the availability and effectiveness of the amazing referral engine, we've built through physicians and pharmacists had fully rebounded.

From a market standpoint March was stronger than February for both total and new prescriptions, which is a typical seasonal dynamic we see every year. This dynamic was magnified by a weaker than usual January and February due to the January February Covid Spike and some bad weather in February .

We remained under historical levels. All of these factors are already baked into our guidance. So with the exception of the grocery issue we discussed in great detail today.

We've had an immaterial impact on Q1 performance on the prescription front was in line with our expectations.

That's for Q2, it's difficult to evaluate where we stand sensor data had quite a bit of noise with this grocer disruption, but based on what we see in macro conditions remain largely consistent with mark from a new prescription and new therapy starts standpoint.

More broadly if you look at our cumulative data for a new therapy starts or as they refer to it new to brand prescriptions or N. B R X, we're getting close to the pre pandemic baseline, but we're not quite there yet primarily because of acute script.

Turning to subscriptions subscription revenue continued to grow rapidly up 59% year over year to $19 $1 million. We ended the quarter with over $1 2 million subscription plan at 1.6 million members benefiting from our subscription offerings since our family subscriptions generally serve multiple consumers.

We do not believe the grocery issue impacted our subscription revenue in the first quarter may be impacted in the future.

As Trevor mentioned, we started increasing subscription fees to a subset of our existing subscriber base at the end of March after testing higher fees with new subscribers in January the early results across new and existing subscribers are encouraging and are at or even outperforming our expectations in some cases, which shows that.

Even with higher pricing the value, we deliver to subscribers as compelling extending from better savings on prescription medication and discounted access to care services to free home delivery.

Pharma manufacturer solutions revenue grew 150% year over year to $23 $5 million as we continue to work with more pharma manufacturers and offer more solutions and deliver a superior rois to those with which we work.

Other revenue grew 5% year over year to $5 $2 million driven by the growth in <unk> care.

Moving down the P&L cost of revenue was $12 $3 million or 6% of revenue compared to $10 $4 million and six 5% of revenue and <unk> 21.

Product development and technology expenses were $35 million compared to $26 $2 million from the comparable period last year.

This increase was primarily due to continued investments in the team and product.

Excluding stock based compensation expense and related tax and other items associated with acquisitions.

Adjusted product development and technology expenses with 13% of revenue compared to 10, 6% of revenue in <unk> 'twenty one.

Sales and marketing expenses were $93 million compared to $79 $7 million and <unk> 21.

We increased advertising and promotional spend by $6 $2 million year over year and continued to invest in our incredible team with the goal of increasing our consumer and pharma manufacturer base and building the car X brand adjusted sales and marketing expense as a percent of revenue decrease year over year, making up 42 eight.

Per cent of our revenue and <unk> 22, compared to 46, 3% last year as we improve some of our marketing efficiency metrics towards the end of the quarter.

General and administrative expenses were $31 $9 million compared to $43 $8 million and 121.

The decrease was due primarily to stock based compensation expense relating to the nonrecurring co CEO awards made in connection with our IPO, which was approximately $16 $1 million higher than the comparable period last year, excluding these and other adjustments adjusted G&A as a percent of revenue was six 3%.

Compared to four 9% in <unk> 'twenty one.

Net income was $12 $3 million compared to net income of $1.7 million in the first quarter of last year net income was impacted by stock based compensation expense of $31 million $13 $9 million of where it's related to the nonrecurring co CEO awards made at the time of the IPO.

Year over year increase was driven primarily by business growth as well as a $16.4 million decrease in stock based compensation expense primarily related to the nonrecurring Kofi awards made in connection with our IPO.

This was partially offset by an increase to our provision for income taxes, which was a 1.7 million dollar expense in the first quarter of 2022 compared to $12 6 million dollar benefit in the comparable period last year.

As to the coffee or words made in connection with your I P. O. We have expense $477 $8 million of the total $533 $3 billion award of through the end of the first quarter.

And have a $55 $5 million remaining to expense over the next 10 quarters.

Expense schedule for the rest of 2022 includes approximately $11 $9 million in Q2, $10 $2 million in Q3, and $8 $5 million in Q4.

Moving on adjusted net income grew 30% year over year to $41.3 million adjusted EBITDA grew 27% year over year to a record $64 $7 million adjusted EBITA margin continues to be strong and was above our expectations from February .

31, 8%.

Selecting our ability to deliver profitable growth due to the compelling unit economics of our business.

We continued to generate strong cash flow with net cash from operating activities of $31 million for the quarter.

In Q1, we repurchased $83 $8 million of class, a common stock or approximately five 6 million shares.

At the end of Q1, we had $166 $2 million remaining from our $250 million share repurchase authorization approved by our board during the quarter.

Moving onto guidance.

At this time, we believe it is unlikely we will be able to achieve the full year 2022 guidance. We provided in our fourth quarter earnings call due to the grocer issue. We discussed we will not be providing full year expectations at this time.

Full year impact of the grocer issue is difficult to estimate because there are several variables, including among others the eventual consumer pricing and returning usage levels that have to be determined.

We expect Q2 2022 revenue to come in at about $190 million. This assumes the grocery issue, which we believe could have an estimated revenue impact of roughly $30 million will be ongoing without amelioration through Q2.

At this time, we do not have sufficient data to forecast the trajectory of any amelioration, because good or excuses, there has not stabilized sufficiently to be forecastable.

There is a potential for revenue upside in the quarter from pharma manufacturer solutions, depending on when certain larger pipeline deals close and we deliver on them.

The guidance includes fight of care, which is expected to contribute approximately $1 million of revenue in the second quarter.

For the quarter factoring in no amelioration of the grocery issue, we expect prescription transactions revenue to decline approximately 8% to 12% year over year subscription revenue to grow 60% to 70% year over year pharma manufacturer solutions to approximately double year over year with additional upside as I just discussed and other Rev.

You have to grow 10% to 15%.

We expect adjusted EBITDA to be impacted roughly dollar for dollar by the revenue shortfall as we've historically been an extremely high margin company and since we do not plan to significantly alter our level of sales and marketing investment largely due to this grocer issue.

This is primarily because the issue generally did not impact our ability to acquire new users and because we are focused on communicating with impact of users. So that they are aware of attractive prices available at other retailers convenient to them ensuring they can continue to use good Iraq and favorite their prescription medication and.

In addition, Arvada care acquisition has historically had net losses and negative adjusted EBITDA, which we expect will continue.

As Trevor mentioned, we acquired might occur in April for $150 million in cash with an additional $70 million of contingent consideration payable upon by the cares financial performance through 2020. Three we also established a management incentive plan underway to certain continuing employees would be eligible to receive up to <unk>.

$10 million of additional compensation upon achievement of certain performance milestones.

The acquisition of the pharma services platform expands our offerings to pharma manufacturers, while helping to improve patient access and adherence to affordable brand drugs.

Body care is expected to contribute more than $8 million of revenue in 2022.

As we look ahead to our multi year outlook, we continue to be confident in our ability to return to revenue growth rates in the mid 20% range in the next few years, albeit potentially off a smaller base than we expected due to the current growth or P. P. M. Dispute. We've discussed we expect pharma manufacturer solutions to continue to grow rapidly and become.

A larger contributor to our revenue.

Another driver of this longer term revenue growth is our belief that as we were planning some of the smaller cohorts from the COVID-19 period with larger ones as we become further removed from Covid overtime.

Penetration into the huge prescription Tam remains low and we continue to increase our share of the market consistently giving us confidence in the business.

<unk> is committed to building the leading consumer focused digital health care platform in the U S and we 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, we're equally committed to driving share.

Holder value by leveraging our cash and driving our margin growth over the long term.

With that I'll now turn the call back over to Trevor before we open it up for Q&A.

Thank you Carsten <unk>.

In summary, we delivered a strong first quarter that exceeded expectations in many ways and we're making good on our strategic priorities for the year in Q1, we reached a cumulative $40 billion consumer savings grew our highly profitable business and expanded our leadership team to support accelerating innovation, we remain committed to delivering.

Oil prices. So all Americans can access the care they need and we're happy to say we received positive updates from the grocer and from Pbms over the last few days that indicate progress toward resolution. We're hopeful they will resolve the outstanding issues in a timely way looking ahead, we see many opportunities to bring value to more consumers and more Americans.

Well, we've made amazing progress we've barely scratched the surface of the opportunity to transform health care in the U S.

Thank you.

As a reminder to ask a question simply press star one on your telephone to withdraw your question press the pound or Husky, we ask that you. Please limit your questions to one.

First question is from Justin Post with Bank of America. Your question. Please.

Great. Thanks for taking my question.

Obviously this is a new issue any any insights on why the grocer might've made the change.

And why do you believe others won't follow and then maybe part b any issues with P. B M volumes, where maybe lower volumes would change any of your relationships with pbms. Thank you.

Okay.

Oh, great. Thank you very much my question.

Recently.

To frame frame. The overall issue here recently, we recognized the grocery chain had taken actions that impacted acceptance discounts for most of the pbms for insensitive drugs and this impacted the acceptance of mini PJM discounts at the grocery stores, which affected many parties, including good rocks.

Said, we are still doing significant disk in volume with the growth there, but its currently substantially decrease from typical levels.

It is natural that there is a push and pull between pbms and pharmacies and they frequently negotiate prescription drug pricing, but usually suggests results in pricing changing over time, which is common but this negotiation impacting our consumers and financial performance is extremely unusual.

Not aware of any similar Pbms pharmacy issues I believe is unique because we talked about earlier.

We talked about the <unk>.

Need next year and the actions we took to help consumers continued access discount pricing and saying so we removed discount prices from a platform for this growth while pbms work with gross around resolution. This protected our new user growth from being impacted new user accounts remained very consistent pharmacies other than this one grocer showed strong aggregate and user growth.

After we made this change many of the groceries competitors, so on new user growth rates up over 20% to 30%. However, this has significant impact because returning users sometimes go directly at the pharmacy without first checking <unk> and while we expect to reach these users it will take time and we don't win them all.

We do expect to decrease our trained users at the grocer.

And new users moving to other retailers, we believe that the pbms and the grocers have been working to resolve their issues.

We've been trying to play an active role in discussing to just ensure that consumers continuing to save and as noted.

It appears there is positive progress to your.

Final part of your question about the Pbms, we don't anticipate any particular issue related to <unk> volumes.

Volumes, our <unk> relationship.

Incredibly strong, but I'll, let Doug speak to.

The second part of your question in regards to.

What the broader some broader topics. Thank you Trevor.

Sarah mentioned, Pbms and pharmacies maintain complex relationships, where they ultimately need to partner to sustain their businesses complex contract negotiations kind of rare in fact is that consumers at the pharmacy counter you may remember in dispute between a well known P. B, having a large retail pharmacy in 2011 and that is did you guys came to terms like because ultimately it's really just in everybody's best interest we do not expect similar.

And she has to materialize at pharmacies with significant volume these pharmacy value of our significant reach with millions of monthly users and continually express interest in deepening their relationship with US just some examples we are working with Walgreens to leverage their broad brand recognition amongst consumers, but just shut in advertisement in one of their stores. We recently worked with Cvs on an integration that allows users to book.

Like appointments right on the graph platform Rite aid joined our gold network in the second half of last year.

And we're in active discussions with most retailers on a variety of new initiatives and additional ways to drive business. It's important to reiterate that our new user accounts are stable and other pharmacy I think significant increases as good or X consumers move to a different pharmacy one of the best ways. We can protect ourselves from future disruptions between Pbms and pharmacies, it's continued to strengthen our relationship with the millions of consumers.

H D piece of companies interact and Thats exactly what were doing with the addition of raspberries and let a large part of the ubers consumer experience and Mark Hawkins senior positions have met and Linkedin, We continue to build trust and guide users to the right financing for them.

Like these ultimately our fuel for innovation that we are rising to the challenge.

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

Okay.

Hey, I know you guys are going to get a million questions on this but.

And my just to understand this dispute as the.

This grocer just blew up all of their contracts all at once.

Eventually I guess would have to get resolved in a.

Assuming it does get resolved.

The scenario under which.

I'll go back to normal and things do go back to normal and then my second part which is kind of a follow on is you guys are ratcheting up your spending and hired a bunch of people and continuing to cut marketing.

The revenue picture was unchanged as this implying that you think this is a short term issue.

Or do you think this could be a permanent issue that youre just going to run lower.

And profits for the time being.

Yeah.

Sure.

Thank you for your question.

Yeah.

We are looking.

This issue maybe I'll talk first about resolution and then just talk about.

The current status and then I'll, let Carson speak about the.

A broader picture.

We have heard.

The grocers and Pbms continue to have constructive advanced conversations where our marketplace. So while we don't set prices and are not a party to the agreement we've been trying to be helpful to ensure consumers can save as many pharmacies as possible and we've received positive updates in the grocery and pbms over the last few days that indicate progress resolution in the meantime, and because we continue to put consumers.

First we're offering competitive prices the other pharmacies. So as mentioned new users are moving to different pharmacies. The new user counts on good remained very stable and competing refilled tailored to this grocer are seeing 20% to 30% increases in new users. So we are communicating with existing either providers or <unk>.

And marketing to ensure they are aware of situations continue to save on our pharmacies.

But we believe Theres true positive progress there and anticipate this will be resolved soon but I'll, let carson speak too.

Are there other spending and such.

John It's Carsten a couple of things first of all I think your core assumption going in and I think you phrased. It is blowing up relationships with a number of pbms at the same time.

As Trevor said earlier on it's quite unusual for something like that to happen.

And that is.

As a reasonably accurate characterization of the situation I would say in terms of impact.

The revenue impact we talked about earlier on is a manifestation of what we how we expect the situation to potentially evolve right now new user growth should remain largely unaffected and what we've seen after taking action is that we can be highly effective at moving new uses to other pharmacies in fact, many of the <unk>.

<unk> competitors saw new user growth rates of over 20% to 30% offsetting new user decreases at this grocer and then specifically those to your marketing point, because with new user growth rates or new user acquisition more pointedly and specifically continuing to be robust and it means continuing to market.

A lot of sense.

The real issue is that we have a strong repeat activity as most folks on this call probably know which is a good thing, but some of those repeat users don't try to <unk> every time before they go onto the pharmacy at the point of sale. So we have some communications in front of those existing users as well so they know that they can get great pricing on other <unk>.

<unk> instead, but it could take more time and be less effected to move the existing users and the new users and Thats why until the issues resolved, we would expect to see a slowdown in return and user activity at this grocer and giving us just under a quarter of our prescription transactions revenue.

A significant amount, which makes it a little tough to estimate the full year impact since that will depend on how and when the issue gets resolved.

Decent positive progress, but theres no full resolution and that's why we're estimating impact.

Assuming resolution does not happen before the end of the quarter.

It's why we said in that case, we may lose a 75% of the revenue related to this grocer or about $30 million again important to note that this is very unusual as you put it again pulling up the number of ppm relationships at the same time.

Number two we think it's going to impact near term prescription transaction revenue, but given the new user information I shared earlier, we do not believe this impacts the growth rate of the business in future years or the total market size. We're also continuing to see great momentum with their subscriptions and pharma menthol businesses as well so from those perspectives.

It is too I think we see strengths in the business hopefully that's helpful.

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

Okay, I'm going to stick with that topic. Please.

Why would.

Businesses, possibly be impacted by this in the future.

Yes.

Mark with lithium.

This is karsten can you could you repeat please it broke up a little bit we couldnt understand the question.

I'm sorry could you explain why this will impact subscription business growth and then.

Situation isn't resolved will that.

Packed Q3, and Q4 by the same amount $30 million.

Let me answer the first part in regards to subscription and then I'll, let Carson speak to Q3 and Q4.

We have limited impact on our subscriber base.

Because this revenue is based on subscription fee, we expect a limited impact to subscription revenue is any gold subscribers of options that are as good or better than other retailers.

In the mail, you'll continue to serve them deliver savings to them both performed better than expected for Q1, and we expect the strong performance of the subscription business to continue.

To speak to yes.

Yeah Mark.

Thank you your sort of extrapolating somewhat linearly.

The impact when you said, hey could this be $60 million in the second half of the year.

We're intentionally not guiding for the full year.

Again as Trevor articulated in some of our prepared remarks, when these issues crop up there is a strong incentive for all the parties involved to resolve them quite rapidly.

In that context.

While well that would essentially imply linearity it doesn't completely I think the other piece of it is that the issue itself manifest it over time, so given that manifested over time not all at once.

Impacts even in the quarter I'm completely linear so.

At the beginning of the quarter then manifested last for example at this point, it's really tough to estimate the full year impact since it'll really depend on when the issue gets resolved.

There is positive progress, but there is no formal resolution today and that's why we're assuming that resolution doesn't happen to provide.

<unk> guide that people can use for modeling purposes again could.

It could be more progress and leg Trevor said that she is like this don't usually stay around indefinitely.

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

Good morning, guys I'm going to take TBM relationships for 500.

And I'm going to Google.

Legal can you just dig a little bit deeper into I.

I guess my questions are with.

With the grocer is it all pbms and can you speak to can you put any more color on like what types of discounts are we talking is this regularly P. P. M discounts as this DIR fees is it like I'm trying to figure out what is the kind of the source of the frustration between the grocer and the Pbms and can you talk about which subset of drugs, we're talking about I guess.

Any color that you could provide on those three factors I think would be helpful.

Sure and you win for my favorite phrase single question.

Yes, well, we do not have all the facts based on understanding the growth there.

Recent actions related to the contract to see if the gross was having a certain <unk> related departments the economics.

You mentioned DIR fees.

There arent.

There arent really any DIR fees related to our business. So it's not related to to that but just other parts of the economics. This is limiting acceptance of mini programs.

Active gross pharmacies involved to your point essentially all pbms. So this is across the vast majority of pbms.

And that.

That alone makes it incredibly unique.

In the past, we have seen pharmacy negotiate change pricing one or two pbms. Its time in this case with grocers negotiate with almost all pbms at the same time and that effectively meant that discount pricing became unavailable to consumers at the same time.

Doug mentioned this issue of this magnitude very infrequent.

Happened in the excuse me on pharmacy issue that Doug raised around 2011 in that instance, historically pbms and pharmacies do come to terms on how to work together and.

The indications we have is that.

Parties are making active progress here.

And then I just want to make sure I understand it right. So this grocery chain basically just opted out of every P. B M network and I, usually I know you guys aren't exposed to DIR fees I used it as an example of like could it be an unintended consequence, where these guys are opting out because of a problem with action.

The they all felt because of a problem, but that would actually impact is also a problem with Y which is you guys I'm trying to kind of understand that dynamic and whether you guys are part of the problem or collateral damage.

Yes, I mean this is Julie.

This is Andy.

Human relations, where marketplace Pbms and pharmacies.

Have their contract we show pricing from the PGM relationships, but your characterization is correct for the non funded portion of these pbms businesses.

We've left.

Temporarily.

Disrupted for.

Progress with sleeping there.

Thank you. Your next question comes from Sean Dodge with RBC capital markets. Your question. Please.

Yes. Thanks.

So you mentioned communicating with customers impacted by this to educate them on discounts available elsewhere. So just to be clear. These are individuals that have had scripts filled in those grocery stores before so they have a good or a code on file so they arent checking the Wednesday. It ahead of time, but how how much identifying data you have on those individuals how good is that identifying.

Data and I guess, how are you engaging them.

We're sending them a postcard or are using other means and methods.

Thank you very much for the question.

We have a good ability to contact through different mechanisms most users who have.

Fill that asset grocer and so.

In general we are just trying to make sure across all all of our business that people know the best ways to get their prescriptions to be able to afford their care, where consumer first company, we care about people being able to stay on their on their treatments.

Treatments that physicians prescribed to them and so we use a variety of mechanisms whether that's through our product through our app through marketing.

Significant marketing reach we have significant ability to run direct now through phones.

I actually also heard a story a.

Starting this weekend about a.

Actually a urologist to high volume neurologist in Los Angeles, where they had been sending patients you know a lot of patients using <unk> to this particular group.

<unk> and <unk>.

They had heard anecdotally from some patients about it not being accepted and so they're now sending all of those patients to a competing retailer so big.

Because of our strong consumer relationship because of our strong relationships because of our super good marketing and ability to target that we haven't had a lot of different capabilities here.

And as noted on the new user side new users.

Moving pharmacies are neither counts remain.

Totally stable and.

Keating.

Competing retailers seeing a number of them are seeing 20%, 30% increase in news.

Thank you for your questions.

Your next question comes from Sandy Draper with Guggenheim Your question. Please.

Great. Thanks very much.

[laughter].

Stay on this topic.

When I think about the mechanics of modeling.

Modeling prescription transaction revenue, you've got Mac and then you've got the.

Monthly contribution per consumer I'm trying to think about just the mechanics of does this make sense I'm trying to understand what you're saying is this basically just dropped as active consumers essentially because they're showing up at this disclosure or does it impact the the pricing at all in terms of the actual price per per action.

And then I guess the follow up to that would be let's just say magically.

At the beginning of the third quarter. This was resolved would you essentially get all of that revenue back or is this going to be a scale type I'm just trying to understand the mechanics of the model, but then also.

If it is resolved would it come back as quickly as it does the revenue is going away.

Sure. Thanks, Andy.

I'll jump in this is Carson first of all yes.

This is not a revenue per Mac issue this isn't that.

Count issue to the extent.

Some of our existing users as Trevor said, we've been very successful in moving new users, hence the extraordinarily high growth, 20%, 30% plus on competing.

Grocers to the one question, so again Mac quantum not revenue per bag or any other sort of take rate take dynamic at this point I think as we mentioned earlier, though when we when youre looking at it from a modeling perspective going forward.

You said if this is resolved.

Particular time Max does everything immediately go back to normal I think the only part that doesn't go back to normal is certain users who do not have good or X before they go to a pharmacy and just show up at the counter.

In their case.

If they if those particular users don't say, good or X first and if we're not directing them somewhere else then in this interim period.

That could impact mark counts, but.

That's the largest area of impact new users.

First we moved this Trevor articulated we're focused very hard on moving our existing users to places they can save more money to as our health care provider partners.

Yeah.

Yeah, Great question comes from Charles <unk> with Cowen. Please go ahead.

Yes, thanks for taking the question.

Maybe I'll shift away for a little bit here I think early you talked about.

Rite aid Joy.

Joining the program, maybe you can talk a little bit about the impact we should think about for subscriptions in the back half of the year, recognizing you're not providing guidance in the back half, but also you had talked about Cvs and Walgreens.

When we think about users being able to book appointments through the up to a Cvs clinic can you talk about how the economics work there because there is not really.

Taking a takeaway from a transaction maybe you can talk a little bit more about that thanks.

Yes, let me start on subscriptions and then we can cover the other topic.

For subscriptions as I mentioned, we're really excited about the growth of <unk> over the last couple of years. The opportunity ahead. We think we can deliver a lot of value to consumers through the subscription plan and it gives us tighter relationships better communication better ability to cross sell gives higher user satisfaction higher LTV and.

The large initiative.

Initiatives here around gold that we talked about is the.

This change we've made in the pricing and the early results across new and existing subscribers are encouraging and are at or slightly outperforming volume expectations. Despite the higher pricing. So this is the reason we deliver subscription revenue growth that exceeded our expectations in the first quarter, 59% year over year compared to the 45% to 55% range we gave.

Last quarter. So we're seeing solid performance, there, which I think showed the value we deliver to subscribers.

Very compelling and we keep extending that service in terms of the rest of the year, our expectations have not materially changed even in regards to that grocery store.

I spoke previously that we've seen.

Quite limited impact there and the impact.

So we don't expect an impact to subscriber revenue.

It'll be limited if any.

I'm now going to hand over to Doug to answer the second part of your question Hey, Thanks, I just wanted to chime in for a few minutes you mentioned Cvs Minuteclinic.

Just a great example of one of the things that I. Most excited about as we continue to extend our platform to help more consumers across more stages of their health care journey.

Sometimes we don't realize all these incredible suite of products that we have right. We help consumers at the research and prevention stage throughout the nation direct health, we help them at the diagnosis phase with their care and we help them at the treatment adherence stage on both generics and brands do prescription transaction subscriptions in pharma manufacturer solutions.

These categories, we want to meet consumers' health care demands by giving them as many options as possible. So it was a Cvs minuteclinic integration. It's just another way for consumers to schedule and receive care. In addition to the virtual options that we provide you with a good Rx there. So again very excited about these partnerships and integrations that we're doing and we're really excited by the relationship with Cvs and to be able to help more consumers navigate their health.

Yeah.

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

Hi, good evening. So two questions here one just in terms of clarification is it now.

Hum.

I understand that good eric's members or not.

The discounts are not honored that grocer, but does this mean that now the closer of AC Theres No pbms, who.

Alright, excepted I E that grocer now is only cash payment I just I just wanted to kind of understand it and then the other thing.

I think early on in the prepared remarks, you said that that grocery accounts for a quarter of your transaction. So I just wanted to confirm that.

And if that's the case are there any other pharmacies or pbms or customer groups.

That accounts for more than 10% of your transactions.

Thanks, Let me answer the first part and I'll hand, it Carson for the second part.

Yes.

For that particular grocer situations involving cant speculate about exactly what's happening at the firm's counter but what we do know is grocery we've taken actions that's been impacted acceptance of discounts from most pbms for a subset of drugs. So this does not.

This acceptance and impacting the acceptance.

Many parties not just good Rx.

So I'll, let kersten answer the other part of your question.

Yes.

I think the best way to answer it is.

With respect to other retailers.

We don't see significant over indexing or under indexing the equivalent to the to the retailer that we're talking about the growth that we're talking about here in particular, so from that perspective, the remaining retail channel channels generally approximate.

Our share with good Rx as they have in the market broadly with respect to pbms or concentration of decrease year over year over year.

And I think a couple of years ago, we were talking about having.

Having three pbms.

Comprise close to half of our our volume that's now shrunk dramatically in our later filings as you'll see we've come down to a point, where there are a couple of pbms that account for just over 20% of our volume so significantly less concentration.

And then before so yeah.

Reflected in our Q.

And there are only two of them that represent more than 10% of volume at this point, what's the top one at 13% hopefully that's helpful. Ricky.

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

Yeah, maybe if I could just follow up on Ricky's question I mean in your K those two pbms. They represent 13, 11% of your revenue. So that's 96 and $82 million. It just seems.

Crazy to think that those couple of Pbms could account for 25% of your transaction volume with one grocery store.

Cvs and Walgreens market share numbers so.

It just seems odd that they kicked all those pbms out at the same time. So I think that's one of the things we're struggling with.

My two questions are really around the profitability, let's assume this ultimately does get settled presumably right. The P. B M may ultimately have to accept some lower profitability and then I guess the question is going to be.

Does that roll downhill to good Rx so whatever the profit.

Margins were in this relationship which seemingly is a quarter of your volumes. I mean are you going to have to accept lower profitability going forward and then my last question is.

It does this gross or do they have their own discount card program in place right now.

Thank you.

Sure.

Me answer the question.

In regards to the maybe.

Maybe economics, when we compare <unk> to other marketplaces, we believe our take rate is comparable or less than other industries and the economics, we have with the Pbms are generally not pharmacy specific and our specific economics at this farm if youre not materially better than another pharmacies. So for this growth are we can't speculate on the negotiation between the Pbms and the grocer.

But at this point, we do not anticipate changes to our economics.

Is there anything else you'd like to add there.

Again, I think there is a question around PVM concentration versus for incentives pharmacy concentration.

Again on the <unk> side.

The Pbms and we have had a very symbiotic relationship for years, they're ultimately our customers and the entities, whose prices we promote to consumers so from that perspective.

I think we've talked in the past about good Rx never having had a PVM terminate on it.

Having been successful in acquiring incremental pbms and those pbms.

Being one of the factors and the economics, they gave us being one of the factors that overtime increased our take rate to some degree so from those perspectives. We think those relationships are extraordinarily strong.

I'm not sure if you had a falloff perfect wholly address the question. So if I didn't.

Please please do let us know Gwen.

And your next question comes from Stephanie Davis with SBB. Please go ahead.

Hi, guys. Thanks for taking my question I'm sorry.

One more on the ppm, Bombay, one, but I understand youre, not giving firm numbers, but could you walk us directionally through the pass out of the grocery P. B M. Conflict is isn't really a question of waiting for the grocer in the P M to resolve the issue.

And you'll have to step function backup and automatically be on the go directs coupons that will just be kind of an automatic.

Or is it more a matter of growing your book of business.

The pharmacy.

Listen customers closer to these other pharmacy.

He will build out of that.

And just making a quick follow up is there any color you can share on how exposed you got to be such a large concentration of volume.

Sure.

I think the answer is both.

We talked about Mike the.

Natural migration that occurred.

Both naturally and via any actions from our marketing and product that moves users. So regardless of anything else users do move.

We've seen that on the new user side, where our new user counts are constant people are just filling at different places.

Existing just as it is.

Gradual but you know as we've spoken about we also believe that.

We existing users can move its Jeff there's a 30 day and 90 day cadence on prescription sales, we're really focused right now on the product side on building, even stronger product capabilities to move people didnt, even more timely way in month for example, and making sure that that happens faster. So that's that's one side of it the first time.

The second side of it is that yes.

Yes, we believe that the Pbms and pharmacies.

Working towards resolution as I mentioned, we.

Product conversation, we've heard updates in the last today in the last couple of days of Gist of what sounds like substantial progress people are making and so that provides a.

Resolution just in place separately. So your second question.

We're indexing it is true we over indexed in this grocer at very attractive consumer pricing and as a marketplace to put consumers first we've been presenting these attractive prices, which as mentioned led to a relatively high volume concentration compared to market share for this party.

And as a marketplace, we source and show competitive pricing from a broad set of <unk> relationships and as prices change, we do expect to consumers change their behavior and mood between pharmacies, which something we already can see occurring.

Thank you. Your next question comes from Doug Anmuth with Jpmorgan. Please go ahead.

Thanks for taking the question.

Obviously, a lot of discussion on.

On the resolution here on the on the grocer issue I guess just.

Curious just on your confidence level that this is really all about kind of negotiations and pricing and finding the right economics.

This is something that could be more of a strategic shift.

By the grocer and then just to clarify I know you don't have much competition in the space, but it sounds like this is this would be impacting all discount cards and programs is that correct.

Yes.

Yes, so again our understanding is.

This acceptance issues affected most pbms, so affecting a number of parties.

<unk> D.

Yes.

There is.

We've spoken already.

It's pretty common but prices change during the course of US running this business through a decade, we've seen meaningful price changes at retailers.

And there's a pattern I would say of.

At points retail raised prices and then get less consumer and then they then lower prices to get consumers and that goes back and forth.

And that's pretty common pattern.

But an actual sort of.

The nature of this if you will sort of changing this across losses.

Lots of Pbms and one time this is really unusual.

And this is more similar to that.

Sort of relatively want on dispute between larger PV I am in a large retail pharmacy back in 2011 and people.

And that historically do come to terms because.

For consumers is good and letting people fill in.

For us we want people to be able to get their health care affordability, but also conveniently. So we wanted to give them the most options.

Even if even if new users.

We'll move rapidly to different places we want the most.

And options for consumers that are possible and we just care that consumers are getting the best the best options here.

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

Great. Thanks, good afternoon everybody.

No.

Youre, not disclosing which grocery chain, which I guess is kind of understandable, but I guess I'm. Just curious can you disclose whether or not it's a publicly traded grocery chain versus private.

And since <unk> is intertwined a bit more with kroger than most other grocery chains can you confirm that it's not kroger at this point.

Given the materiality of the situation I'm sure, we're all going to figure it out fairly soon but just any bread crumbs, you want us to grow our way to help figure this out it might be helpful. Thanks.

Yes, I think at the time, we just want to say, it's a large grocer.

Right.

Okay.

Your next question comes from Jonathan Young with Credit Suisse.

Hey, Thanks for taking my question.

Quantify the revenue impact of $30 million I guess is this the maximal impact that we should expect.

Looking forward or is there, possibly that could be more and then just going to your comment about how the grosser has very good pricing I guess, how do you prevent yourself from being over indexed to this one grocery or in the future given your commentary that they do have really good pricing because P. B M contracts, usually come up I think three years. So I'm trying to understand how you prevent this kind of moving forward or avoided.

Thanks.

Sure. Thanks for the question and great to speak with you.

As we mentioned earlier, the new user count has been back to normal and is largely unaffected after remove the discounted from this grocer, while the pbms and the grocery or working out their issues and come to resolution. So that drove new user accounts to be much higher than other places.

<unk> been key to our estimation of what the impacts look like which means the impacts are largely tied to recurring usage. The grocer. So returning users more than anything else.

And as we think about that when we quantified what the potential impact could be we assume that we do not see.

Us.

Benefiting from the resolutions the pbms and the grocery might come too during this quarter and Thats why we extrapolate forward.

Measuring it as $30 million estimate that we disclosed earlier on so we think of resolution were to happen in the quarter and if the prices that the growth question.

Our attractive then that potentially create some upside in our prescription transactions line relative to the $30 million estimate we put out there. So from those perspectives I think I think that's probably helpful to your question with regard to over indexing generally I think the issues as Trevor said, one where as a marketplace.

And as an entity that wants to provide the best prices to consumers. If someone has very good prices that is.

A logical place to drive them too I think.

Going forward, we continue to also have more and more tools to even when consumers begin working with a given retailer being able to move them to other retailers. So the other strengths. We have is the opportunity over time to be able to govern where they land and you see us doing that with new users, which is why these other retail.

<unk> not the one in question are seeing 20%, 30% plus increases in volume and that's one of the tools. We can use to make sure that we continue to be able to allocate volume two places where consumers will be best served.

What I'll add is we've laid out our strategic priorities. They are to increase consumer awareness, 70% of consumers still don't know that prices might vary between a pharmacy strengthening HCP relationships deepening the relationships with consumers and then building and acquiring new platform capabilities. These are what we've been delivering on in particular.

Deepening relationship with consumers we are.

Are doing incredibly well at being able to make new consumers aware of where to fill prescriptions what to do.

You can see that in music accounts remaining totally stable, but we are doubling down on the product side on making sure. We can react effectively communicate effectively make sure we can make sure consumers know exactly.

What our best options for them mid month.

And timely ways. So that's a big focus we have these new executives that were really excited about we mentioned, including Mark hole on the product side Raj and.

This provides.

We will focus even more on the product side on deepening those relationships consumers and think there's a lot of things we can do pretty quickly there.

To add even more capabilities.

Thank you and the last question will be from standing stain with Wells Fargo Securities. Please go ahead.

Oh, great. Thanks for squeezing me in here.

So clearly the grocer has had a big impact on <unk>, but as I think about it from a different perspective, I would presume that good or excellent driving significant foot traffic to the grocer. So now that you've commented you'll be driving foot traffic elsewhere, clearly those retailers pharmacies.

They'll be getting the incremental foot traffic they'll get those knock on benefits from traffic.

My question is is there an opportunity for you to monetize driving foot traffic elsewhere in the retail.

And so different retail locations beyond the take rate and as an example, just something that comes to mind for me is maybe they pay you. Good Rx to offer a flat coupon that can be applied toward let's say any drug but they offered so to get additional volume is that something that can now play out.

Yeah. Thank you very much for the question.

<unk> bin.

Ill take them in two ways, one I think yes, we looked at for example, helping.

On specific OTC offerings, we talked in prior quarters about the new <unk>.

Efforts, we've done around insurance, which is an important part of the consumer journey within health care, and where we are helping drive people into insurance plans, so and Doug spoke about scheduling appointments at Cvs.

Cvs Minuteclinic Theres a variety of ways, we can drive additional opportunities.

Opportunities within those areas. We're also continuing to do a better job cross selling or different services as I mentioned, we when we look at Q1 it was an excellent quarter.

Subscriptions is growing very quickly doing.

Well, the pharma manufacturer solutions business, which we cross sell into our.

Our fastest growing business revenue grew 150% year over year.

He has incredible momentum in that pharma manufacturer solutions business and it's doing.

Doing very well with all of those customers and with providing those solutions, we talked about good or expert providers.

<unk> is on the path to becoming one of the largest provider platforms in the U S. We talked about that opt in rate the 90% plus opt in rights for <unk> and we continue that great rate performance, we have 150, K plus hcp's options a platform through April and the.

The last 90 days over 500000 prescribers so.

Well this immediate.

With this one particular grocers. Unfortunately, we have millions of people that come to go direct every month for help with their health care, we see many many opportunities to help them.

As your question I think.

Luke do that creates a lot of additional monetization opportunities in the future beyond the already extremely fast growing businesses of farmer manufacturer solutions descriptions and these other areas of our business that are growing at such a quick speeds and also being one of the largest HCP platforms, where we are 90 NPS with consumers.

Providers all of this provides unique and interesting monetization possibilities, which we are delivering on.

Across these different segments and different.

Parts of the ecosystem so appreciative of question.

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

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